Payroll Tax Forms Your Small Business Should Know About

Knowing what tax forms the IRS requires of your small business is one of the most difficult aspects of running and processing payroll. There are so many different tax forms it can be confusing to know which ones actually apply to your small business. Nonetheless, it is crucial you file the correct forms and ensure they are filed accurately and on time. 

But, you don’t have to do it all alone! With the help of an online payroll provider, filing your tax forms is simple. PayWow is an online payroll provider that will have your small business running effective and efficient payroll in no time and filing your tax forms with ease. With PayWow your Federal forms 940, 941, 1099, and W-2s will be generated and filed accurately and automatically. 

But you might still be wondering, what exactly are those forms? No worries, we’ve got you covered! Here’s an overview of some payroll tax forms your business may need to file with the IRS: 

Form W-4 

Form W-4 does not need to be sent to the IRS but is it still an important form you need to provide your employees. Form W-4, Employee’s Withholding Certificate, determines the amount of federal income tax to withhold from an employee’s wages. This form will also ask employees to provide information about themselves such as their name, Social Security number, address, and marital status. And, the form asks for the employee’s withholding adjustments, such as claiming dependents. When you hire a new employee, they will need to fill out Form W-4.

After your employees have completed their W-4s, it is important you keep each one in your records because they will be useful when it comes time to complete the forms below. 

With PayWow, employees can complete their W-4s remotely using our mobile app, myPayWow. Having your employees W-4s stored securely online will ensure you never lose an important document!

Form 1099

Form 1099 is filed for independent contractors. When providing an explanation on independent contractors the IRS states, “The general rule is that an individual is an independent contractor if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.  Form 1099 is an information return used to report various types of income other than wages, salaries, and tips. There are two different versions of Form 1099 that you made need to file. 

Form 1099-NEC is filed to report payments ($600 or more) made to independent contractors (or nonemployees) for their services. Payments including fees, commissions, prizes, awards, and any other forms of compensation for service should be reported in Form 1099-NEC. Form 1099-NEC is due to the IRS and the payee by January 31, 2022. 

Form 1099-MISC is an IRS tax form used to report the miscellaneous payments made to other self-employed people during the calendar year. In other words, Form 1099-MISC reports payments other than nonemployee compensation made by a trade or business to others.

File Form 1099-MISC, Miscellaneous Income, for each person in the course of your business to whom you have paid the following during the year:

  • At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
  • At least $600 in:
    • Rents.
    • Prizes and awards.
    • Other income payments.
    • Medical and health care payments.
    • Crop insurance proceeds.
    • Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
    • Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
    • Payments to an attorney.
    • Any fishing boat proceeds.

 The due date for filing Form 1099-MISC with the IRS is March 31, 2021, if you file electronically.

Form W-2

Every year as an employer you are responsible for filing W-2 forms for each of your employees.  You should not fill out Form W-2 for independent contractors only employees! Form W-2 is a wage tax form to report the wages paid to employees and the taxes (social security, income, and Medicare tax) withheld from the employees to the SSA (Social Security Administration). After filing the return with the SSA, employers must also send a copy of Form W-2 to the corresponding employees so that they can file their year-end taxes.

The due date for filing 2021 Form W-2 with the SSA is January 31, 2022. Employers must also provide their employees with Form W-2 on January 31st as well. 

To complete Form W-2, you should use your payroll information from the current fiscal year to complete the form.

Form 940

Form 940 is the Employer’s Annual Federal Unemployment Tax Return (FUTA). IRS Form 940 must be filed once a year by employers to report their FUTA payments that were made during the year. Together with state unemployment tax systems, the FUTA tax provides funds for paying unemployment compensation to workers who have lost their jobs.

If you paid $1,500 or more to an employee during any quarter for the current or previous tax year, you are required to file Form 940 and pay FUTA taxes. It is important to note, only employers pay FUTA tax. So employers should not collect or deduct FUTA tax from their employees’ wages. The deadline to file  Form 940 each year is January 31st. 

Form 941

Form 941 is the Employers Quarterly Federal Tax Return. Yes, that’s right, Form 941 will have to be filed four times each year. Each quarter employers must report employment taxes withheld from employee paychecks with IRS Form 941. Other information you should report with Form 941 includes:

  • Wages paid to employees
  • Reported tips
  • Federal income taxes withheld
  • Social Security and Medicare taxes (employee and employer portions)
  • Additional taxes withheld
  • Adjustments to Social Security and Medicare taxes, sick pay, tips, and group-term life insurance

Form 941 is necessary for employers to file to ensure they are withholding the correct amount of federal income, Social Security, and Medicare tax from their employee’s paychecks. It is also used by employers to pay the amount of Medicare and Social Security tax they owe to the IRS. 

The deadlines to file Form 941 for 2021 include:

  • April 30, 2021, for Quarter 1
  • August 02, 2021, for Quarter 2
  • November 01, 2021, for Quarter 3
  • January 31, 2021, for Quarter 4 


PayWow’s simple set-up and easy-to-use software will have your small business running payroll in no time. Alongside running your payroll, you will also be able to file your payroll tax forms quickly and easily. PayWow guarantees accurate federal and state tax withholdings, deposits, and filings on all your IRS forms. So, not only will your forms be accurate, but they will also be filed on time. It is important to be mindful of your deadlines because the IRS penalizes late filings. But, with the help of PayWow, late filings won’t be an issue! 

Get started with PayWow today and ensure your business remains tax compliant!

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