Workers Compensation Audit? IRS Payroll Audit? Either audit is time consuming and requires a great deal of expertise to prepare your supporting documentation. These types of audits generally have one return in common and that is your Employers Quarterly Federal Return (form 941). This return filed to the IRS is essential in summarizing your Gross Taxable Wages and associated tax payments. The return includes Employer/Employee Social Security and Medicare taxes as well as Federal Taxes withheld during a quarterly tax period. For example, your First Quarter is January 1st through March 31st and the 941 return is due to be filed by April 30th.
Retaining copies each quarter for easy access is crucial to your reconciliation. Each year the IRS requires W2 reporting filed by the employer at the end of February in the following New Year. It relies on the past year’s four quarterly 941 returns to validate the wages and taxes submitted. If the wages reported on your company W3 Transmittal followed by the W2 employee listing do not match your Employer Quarterly Federal Returns you will be asked to provide the documentation which may lead to an audit. Payce readily provides an electronic copy of your Return each quarter for easy access year after year. Using MyPaycecan give the employer the ability to see and print your electronically stored reporting each pay, each quarter and of course, annually.
Your Employers Quarterly Federal Return is also important for your Worker’s Compensation policy. For example, your plan year may run from June 1st to the following May 31st to complete the annual policy term. Your insurance company will ask for copies of the Employers Quarterly Federal Returns nearest your plan year to analyze actual gross taxable wages reported versus your estimated annual wages when you started the policy year. If your wages are higher than estimated, you will receive an additional invoice for the premium associated with the underpayment. Sometimes these invoices are significant and unplanned.
Did you know that Payce can assist you in several ways to minimize the burdens of unexpected funding and reconciliation audits? Here’s how:
Keep your Employers Quarterly Federal Tax returns in a safe, secure place for easy access.