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941 Report Questions

Here are some fast answers to questions recently asked through the Fathom site.

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Show/Hide AnswerIf I only have subcontractors, how do I fill out the 941 report?

If you have no employees, you should not fill out a 941 report. If you receive a 941 report from the IRS, you should complete it by filling in the second page indicating you have no employees and return it to the IRS. You should also review the rules regarding subcontractors and employees to be certain that your subcontractors are not incorrectly treated as vendors.

Show/Hide AnswerCan I make 941 payments at any bank?

No. You must make your payment through the EFTPS system by signing up here. You can then make payments either over the Internet or by phone.

Show/Hide AnswerHow do I reconcile the 941 account?

If you have your payroll liability accounts set up as separate accounts so that the liabilities to each agency are grouped, you can reconcile the accounts quarterly or annually. This is done just like reconciling a bank account. Go to Banking, Reconcile and select the 941 liability account. The starting balance should always be zero. Set the ending balance to zero as well.

If this is the first time you are reconciling the liability account, the fastest way to get started is to do a group of prior years at once. set the closing date for 12/31/08, for example. Click continue, and then check the box "Hide transactions after the statement's end date." Click "Mark All." It may take a minute or two for QB to mark all the transactions. Most likely, the Difference will not equal zero since frequently the final 941 payment in a year is made in the following year. Uncheck the "Hide transactions" box. Scroll down the Payments column and look for the final 941 payments and check them. If your Difference now = zero, click Reconcile Now. Don't bother to print the report, it will be multiple pages long.

If your difference is not zero, first try changing the ending date to a prior 12/31, unmarking all, and starting over. Work backwards this way until you get a year that reconciles. Then as you move forward year by year, you can make adjustments if needed to reconcile until you are current.

All payroll liability account reconciles can be brought current in this manner.



Advice and tips provided on the Fathom Graphics website are not a substitute for advice from your CPA, tax preparer or attorney. We are not CPAs or attorneys and do not provide legal or tax advice.