Jan 01, 2022
By Hayley Norton, CPA Manager at Terry Lockridge & Dunn
Handling employment taxes can be complicated, especially when you are required to file important tax documents throughout the year. Here is a quick recap of the most vital payroll tax forms and what you can do to make your payroll life easier in 2022.
Important Payroll Tax Forms
- Form 941 — Employer's quarterly federal tax return. This form is used to report income tax withheld from employees' pay and both the employer's and employees' share of Social Security and Medicare taxes. Employers generally must deposit Form 941 payroll taxes on either a monthly or semiweekly deposit schedule.
- Form 940 — Employer's annual federal unemployment tax return (FUTA). This return is due annually at the end of January. However, FUTA taxes must generally be deposited once a quarter if the accumulated tax exceeds $500.
- Form W-2 — Wage and tax statement. Employers are required to send this document to each employee and the IRS at the end of the year. It reports employee annual wages and taxes withheld from paychecks.
Make Payroll Easier
- Remind employees to review withholdings. January is a great time to remind your employees to check their paycheck’s tax withholding amounts. Various life events in the preceding 12 months can potentially lead to one of your employees owing a different amount of taxes in 2022 than they owed in 2021. And no matter how hard you try, employees will ask for your help. So, get ahead of the curve with this simple review reminder.
- Create a payroll forecast. Be prepared for how much you will spend on salaries and wages in 2022 by creating a payroll expense and benefit forecast. In addition to base salaries and wages, include the following in total salary and wage expenses: Your share of an employee’s Social Security and Medicare taxes; health insurance premiums paid on behalf of employees; and any other benefits you provide to employees.
- Ask for help. Payroll compliance involves many moving parts at the local, state, and federal levels. Please call if you have any questions about your business’s payroll tax compliance, and how to properly account for payroll expenses on your financial statements.
To discuss your specific circumstances, please feel free to reach out to Hayley at firstname.lastname@example.org, or your accountant at Terry Lockridge & Dunn. They can be reached in Cedar Rapids at 319-364-2945 or in Iowa City at 319-339-4884.