Discussion:Form 941 question
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| Revision as of 15:40, 16 May 2006 Warren (Talk | contribs) (You are correct) ← Previous diff |
Current revision DR BRISKET (Talk | contribs) (Warren--thanks f) |
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| {{ForumReplyPost|UserID=Warren|Date=16 May 2006|Text=You are correct that if the total for the quarter is less than $2500 you can pay with the tax return. The IRS uses a "lookback period" for purposes of establishing deposit requirements. The lookback period for 2006 is the period from July 1, 2004 thru June 30, 2005. If your total liability was $50K or more you must deposit using the semi-weekly rules if it was under $50K then you are considered a monthly depositor. However, even though you are a monthly depositor you can still pay with the return if the total for the quarter is under $2500. I always have my clients pay by monthly deposit to be on the safe side since you really don't know what your quarterly liability will be until the end of the quarter and by that time it is too late to make the monthly deposits.}} | {{ForumReplyPost|UserID=Warren|Date=16 May 2006|Text=You are correct that if the total for the quarter is less than $2500 you can pay with the tax return. The IRS uses a "lookback period" for purposes of establishing deposit requirements. The lookback period for 2006 is the period from July 1, 2004 thru June 30, 2005. If your total liability was $50K or more you must deposit using the semi-weekly rules if it was under $50K then you are considered a monthly depositor. However, even though you are a monthly depositor you can still pay with the return if the total for the quarter is under $2500. I always have my clients pay by monthly deposit to be on the safe side since you really don't know what your quarterly liability will be until the end of the quarter and by that time it is too late to make the monthly deposits.}} | ||
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| + | {{ForumReplyPost|UserID=DR BRISKET|Date=16 May 2006|Text=Warren--thanks for the reply. I told my client I thought the IRS person was telling him incorrectly. I did suggest that he deposit his taxes monthly so he doesn't have to come up with such a large amount when he files his return. But, as I mentioned earlier, he constantly struggles with his cash flow. This is because he is a very poor money manager with some very bad habits. His quarterly liability averages about $1,400, but I've never been able to convince him to pay monthly.}} | ||
Current revision
Discussion Forum Index --> Tax Questions --> Form 941 question
DR BRISKET (talk|edits) said: | 16 May 2006 |
| One of my business clients paid his first quarter 941 payroll taxes with the return because his liability was less than $2,500. Unfortunately, his check bounced (he has a constant struggle with cash flow). He called the IRS to work out a payment arrangement. The person he talked to told him that he should be depositing his 941 taxes monthly because that his how the IRS has him set up--that it doesn't matter that his quarterly liability was less than $2,500. It has always been my understanding that the entire liabilty can be paid with the return if it is less than $2,500. My client said he tried pointing this out to the IRS person he was talking to, but was told that didn't matter--that he should pay monthly because that is how the IRS has him set up. Is he being told correctly? | |
| 16 May 2006 | |
| You are correct that if the total for the quarter is less than $2500 you can pay with the tax return. The IRS uses a "lookback period" for purposes of establishing deposit requirements. The lookback period for 2006 is the period from July 1, 2004 thru June 30, 2005. If your total liability was $50K or more you must deposit using the semi-weekly rules if it was under $50K then you are considered a monthly depositor. However, even though you are a monthly depositor you can still pay with the return if the total for the quarter is under $2500. I always have my clients pay by monthly deposit to be on the safe side since you really don't know what your quarterly liability will be until the end of the quarter and by that time it is too late to make the monthly deposits. | |
DR BRISKET (talk|edits) said: | 16 May 2006 |
| Warren--thanks for the reply. I told my client I thought the IRS person was telling him incorrectly. I did suggest that he deposit his taxes monthly so he doesn't have to come up with such a large amount when he files his return. But, as I mentioned earlier, he constantly struggles with his cash flow. This is because he is a very poor money manager with some very bad habits. His quarterly liability averages about $1,400, but I've never been able to convince him to pay monthly. | |
