Comprotax

Form 944 vs. Form 941

Every employer who pays compensation for services performed by employees must report to the IRS the wages paid. Additionally, employers must report related employment taxes including income tax withholding, social security tax, Medicare tax and, if applicable, Additional Medicare Tax. Generally, employers must report wages, tips and other compensation paid to an employee by filing Form 941, Employer’s Quarterly Federal Tax Return. But small employers (those with annual employment tax liabilities of $1,000 or less) may instead be eligible to file Form 944, Employer's Annual Federal Tax Return, if approved by the IRS.

Eligibility to File Form 944

If your employment taxes for the calendar year will be $1,000 or less, you could be eligible to file Form 944. Form 944 is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will file and pay these taxes only once a year instead of every quarter.

When applying for your Employer Identification Number (EIN), you will receive a notice listing the employment tax forms you are required to file. Form 944 cannot be filed unless you receive written notification that you are eligible to do so. If you are unsure of your current filing requirement, call 800-829-4933 (toll free) or 267-941-1000 (toll call).



In general, if the IRS has notified you to file Form 944, you must file Form 944 instead of quarterly Forms 941 to report certain amounts, including:

Wages you have paid
Tips your employees reported to you
Federal income tax you withheld
Both (employer and employee) shares of social security and Medicare taxes
Once your annual employment tax liability exceeds $1,000, the IRS will notify you that you're no longer eligible to file Form 944 in future years and that you must file Form 941 quarterly. However, until you receive the notice, continue to file Form 944 annually.

If you haven't received notification to file Form 944 for 2024 but estimate your employment tax liability for calendar year 2024 will be $1,000 or less and would like to file Form 944 instead of Forms 941, you can contact the IRS to request to file Form 944 for 2024. To file Form 944 for calendar year 2024, you must call the IRS at 800-829-4933 (267-941-1000 (toll call) if you're outside the United States) between January 1, 2024, and April 1, 2024, or send a written request to the correct mailing address postmarked between January 1, 2024, and March 15, 2024. The IRS will send you a written notice that your filing requirement has been changed to Form 944. If you don't receive this notice, you must file quarterly Forms 941 for calendar year 2024.

Form 944 is due by Jan. 31

For 2023, file Form 944 by Jan. 31, 2024. However, if you made timely deposits in full payment of your taxes due for the year, you may file the return by Feb. 12, 2024.

For further information, see Instructions for Form 944 (2023).

Series summary

Today concludes our week-long series. The main goal of this series was to provide general guidelines on reporting, filing and deposit requirements of an employer.

The IRS Never Goes Phishing

Phishing is the practice of sending fraudulent communications disguised to appear to be from a reputable source. These attacks, usually through email but increasingly through text messages, are an attempt to try to steal personal and financial information.

The IRS does not request personal or financial information from taxpayers by email. This includes any type of electronic communication, such as text messages and social media channels.

If you receive a suspicious IRS-related communication:

Don’t reply to the sender.
Don't click, save, or open any attachments. They can contain malicious code that may infect your computer or mobile phone.
Don't click on any links. Visit our identity protection page if you clicked on links in a suspicious email or website and entered confidential information.
Immediately forward the entire message, with the full email headers, to [email protected]. Don't forward scanned images because this removes valuable information.
Delete the original email.

IRS cautions taxpayers about fake charities and scammers targeting immigrants

The IRS continues to observe criminals using a variety of scams that target honest taxpayers. In some cases, these scams will trick taxpayers into doing something illegal or that ultimately causes them financial harm. These scammers may cause otherwise honest people to do things they don't realize are illegal or prey on their good will to steal their money.

Here are a couple of this year's Dirty Dozen scams.

Fake charities
Taxpayers should be on the lookout for scammers who set up fake organizations to take advantage of the public's generosity. Scammers take advantage of tragedies and disasters.

Scams requesting donations for disaster relief efforts are especially common over the phone. Taxpayers should always check out a charity before they donate, and they should not feel pressured to give immediately.

Taxpayers who give money or goods to a charity may be able to claim a deduction on their federal tax return by reducing the amount of their taxable income. However, to receive a deduction, taxpayers must donate to a qualified charity. To check the status of a charity, they can use the IRS Tax Exempt Organization Search tool. It's also important for taxpayers to remember that they can't deduct gifts to individuals or to political organizations and candidates.

Here are some tips to help taxpayer avoid fake charity scams:

Individuals should never let any caller pressure them. A legitimate charity will be happy to get a donation at any time, so there's no rush. Donors are encouraged to take time to do their own research.
Confirm the charity is real. Potential donors should ask the fundraiser for the charity's exact name, website and mailing address, so they can confirm it later. Some dishonest telemarketers use names that sound like well-known charities to confuse people.
Be careful about how a donation is made. Taxpayers shouldn’t work with charities that ask for donations by giving numbers from a gift card or by wiring money. That's a scam. It's safest to pay by credit card or check — and only after researching the charity.
For more information about fake charities see the Federal Trade Commission web site.

Immigrant fraud
IRS impersonators and other scammers often use threats and intimidation to target groups with limited English proficiency.

The IRS phone impersonation scam remains a common scam. This is where a taxpayer receives a phone call threatening jail time, deportation or revocation of a driver's license from someone claiming to be with the IRS. Recent immigrants often are the most vulnerable. People need to ignore these threats and not engage the scammers.

A taxpayer’s first contact with the IRS will usually be through mail, not over the phone. Legitimate IRS employees will not threaten to revoke licenses or have a person deported. These are scare tactics.

Tax tips for students working summer jobs

During the summer many students focus on making money from a summer job. They may want to gain work experience, earn some spending money or help pay for college. Here are some facts all student workers should know about summer jobs and taxes.

Not all the money they earn will make it to their pocket because employers must withhold taxes from their paycheck.

New employees: Employees – including those who are students – normally have taxes withheld from their paychecks by their employer. When anyone gets a new job, they need to fill out a Form W-4, Employee's Withholding Allowance Certificate, and submit it to their employer. Employers use this form to calculate how much federal income tax to withhold from the new employee’s pay. The Withholding Estimator on IRS.gov can help a taxpayer fill out this form.

Self-employment: Students who take on jobs like baby-sitting, lawn care or gig economy work are generally self-employed. Money earned from self-employment is taxable, and these workers may be responsible for paying taxes directly to the IRS. One way they can do this is by making estimated tax payments during the year.

Tip income: Students who earn tips as part of their summer income should know tip income is taxable. They should keep a daily log to accurately report tips. They must report cash tips to their employer for any month that totals $20 or more.

Payroll taxes: This tax pays for benefits under the Social Security system. While students may earn too little from their summer job to owe income tax, employers usually must still withhold Social Security and Medicare taxes from their pay. If a student is self-employed, Social Security and Medicare taxes may still be due and are generally paid by the student.

Reserve Officers' Training Corps pay: If a student is in an ROTC program, and receives pay for activities such as summer advanced camp, it is taxable. Other allowances the student may receive – like food and lodging – may not be taxable. The Armed Forces' Tax Guide on IRS.gov provides details.