Payroll managers know this sentiment well, since the first-quarter Form 941 is due at the end of the...

1. For payroll, Form 941 makes April the cruelest month
Payroll managers know this sentiment well, since the first-quarter Form 941 is due at the end of the
month. Here are some tips for completing 941 forms.
Reconcile quarterly data with the wage/tax data from the general ledger or service bureau reports
before filing. Watch the totals back to gross wages.
Check the box at the top of the form for the quarter, and make sure the quarter checked is the same
as shown on Schedule B, Report of Federal Tax Liability (ROFT).
Check the Yes box and complete the third-party designation information in Part 4, if you want to
discuss this form with the IRS.
Check that numbers aren't transposed. Use a minus sign to enter negative amounts.
Report employees' earnings up to the Social Security taxable wage base ($118,500).
Enter on Line 2 total wages and other compensation paid and taxable fringe benefits provided, even
if you didn't withhold taxes from the payments.
The amount monthly depositors report in Part 2, Line 14, must match the Line 10 amount.
Semiweekly depositors verify that the ROFT and Line 10 balance. Reminder: Record tax liabilities,
not deposits, to the ROFT.

2. Ensure that dates and the amounts of your tax deposits are the same on the ROFT and your EFTPS
records.
After filing, reconcile year-to-date data, including imputed values for noncash compensation. What
must balance: 941 amounts/W-2 summary/payroll reports. Run sample W-2s to confirm the
reconciliation. Tip: Create a reconciliation spreadsheet. Advantages: Fourth-quarter totals won't be a
surprise, and problems can be found and fixed easily.
Balance gross-to-net and taxable wages quarterly. For later quarters, balance cumulative payrolls to
quarterly totals and balance quarterly totals against each other. Identify discrepancies and correct
them.
Make interest-free adjustments of underreporting errors by filing Form 941-X by the due date of
Form 941 for the quarter during which you discover the error, and pay any tax due. Also, file W-
2c/W-3c forms.
Review the payroll bank accounts for additional tax debits or credits made by your service bureau.
Book any corresponding journal entries.
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