IRS Form 941
Q.I recently started a small business. I was told that I should get an employers indentification number from the IRS. After I received my number I started to get the Form 941 on a monthly basis. I was, at first, going to hire someone but since have decided that I'm too small at this time. I've ignored the first few sent out to me but I'm getting a little nervous. I never filed one with the IRS so I'm not sure what to do with these forms I keep getting. Shouldn't I contact the IRS and tell them it's just me or what? Should I file them? If so, how should I do this since I'm the only employee? Any help would be greatly appreciated.
A.I think that I would give IRS a call at 1-800-829-1040 and ask them how to stop the forms from coming to you. If you have no employees, you do not need an EIN and should use your SSN as your identification number. If you still have it, file the return for the first quarter you were in business. Show zero wages paid and mark the return "Final" as per the instructions. That will close out your filing requirement. Should you ultimately have employees, just get a form and start filing under the same EIN. If you are doing business as a sole proprietor, do the following. Prepare a concise letter to the IRS that includes the relevant facts. Include your EIN. Indicate that you started business on XX/XX/XXXX. Since the date you started your business, you have had no employees and at this time you don't foresee hiring any. Tell the IRS that because you haven't had any employees, you are not liable for filing Form 941, nor will you be liable for filing Form 940 at the end of the year. Since you have no plans to hire any employees, ask the IRS to delete your requirement to file Forms 941 and 940. If you are incorporated, the above won't work because, by law, you are considered to be an employee and subject to employment taxes on your earnings/salary. The 941 form is a QUARTERLY form, NOT monthly. Make sure you know what you are receiving.
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