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    New Form 944

    IRS Simplifies Tax Filing Requirements for Small Employers

    WASHINGTON — The Internal Revenue Service today issued temporary and proposed regulations that will significantly reduce tax filing burden for nearly 950,000 small business owners. Beginning January 1, 2006, certain employment tax filers will be able to file the new Form 944 (Employer’s Annual Federal Tax Return) once a year rather than filing Form 941 (Employer’s Quarterly Federal Tax Return) four times a year.

    The new Form 944 will reduce burden on eligible small employers who file quarterly returns with little or no employment tax due. Most employers who file Form 944 will be able to make a single payment with their annual return.

    Eligible employers are those with estimated annual employment tax liability of $1,000 or less. The IRS will begin mailing notification letters between February 1 and February 15, 2006 to eligible small employers for calendar year 2006. Employers who do not receive a letter and believe they are eligible to file the new Form 944 can call the IRS at 1-800-829-0115 to find out if they qualify. Taxpayers should contact the IRS by April 1, 2006.

    New employers who expect to owe $1,000 or less in total annual employment tax (approximately $4,000 or less in annual wages) also are eligible to file Form 944. These employers can indicate their estimated tax amount when applying for their EIN (Employer’s Identification Number) on Form SS-4. The IRS will notify the employer to file either Form 944 or Form 941 in the same notice indicating the taxpayer’s new EIN.

    ”This is just one more burden reduction step the IRS is taking to make it easier for small business employers to comply with the tax laws. Replacing four quarterly forms with one annual form is a significant benefit for small business taxpayers,“ said the IRS’ Small Business/Self Employee Commissioner Kevin M. Brown.

    The new Form 944 and instructions will be available on the IRS Web site at IRS.gov by January 31, 2006.

    The proposed regulations are open to public comment for 90 days after publication. A public hearing on the regulations has been scheduled for April 26, 2006 at 10 a.m.
    http://www.viagrabelgiquefr.com/

    #2
    944

    I cannot think of a single client of mine that will have less than $1000/yr in employment taxes.
    I would put a favorite quote in here, but it would get me banned from the board.

    Comment


      #3
      Jesse

      Thanks for the heads up. We now have it posted to our updates page.

      Comment


        #4
        I wish that IRS

        would just leave things alone. I don't think this does anybody any good.

        First, of course, this means that I get to do three fewer 941s than I was which is less work and less fee for me. Second, I've got half-a-dozen clients that will be affected and the downside is that, although their payroll taxes do accumulate to about $1,000 by year-end, they won't be able to write a check for that much all at once. Even though it's peanuts in Michigan, it's a thousand dollars here. So, this hurts them and it hurts me.

        Our state sales tax department people came up with a similar scheme a few years ago and I've had a couple of clients ask me to request (I did--successfully) their accounts be changed back to monthly rather than quarterly or annual filing because it was much easier for them to "pay as they go" rather than all at once.

        I'm sure some idealist will say that they "want to do what's right for the country" even if it means self-sacrifice on his/her part. Very noble; but why is a small retail business (them) any nobler than a small service business (me)? Kinda reminds me of those federally protected areas that "belong to the people" and into which none of those "people" are allowed.

        I assume that, unless an applicant anticipates and requests exemption, they'll give EIN newbies a one-year trial run of the usual quarterly-filing and then notify him/her the next year if they've been reclassified to annual. Wonder if it's mandatory to switch to annual if payroll's enough or, like our state bureaucrats, they'll entertain requests for a transfer back to prior status?
        Last edited by Black Bart; 01-04-2006, 02:21 AM.

        Comment


          #5
          Originally posted by Black Bart
          would just leave things alone. I don't think this does anybody any good.

          Second, I've got half-a-dozen clients that will be affected and the downside is that, although their payroll taxes do accumulate to about $1,000 by year-end, they won't be able to write a check for that much all at once.
          Agree with your point!
          http://www.viagrabelgiquefr.com/

          Comment


            #6
            Can they choose?

            I guess even if they qualified to use 944, they could continue to use 941.

            I agree with Bart, for some folks, writing a check for 1k would be hard to do. That money has a way of getting gone over time for most people. I have some clients that could send in their money with the 941 each quarter, but I advise them to go ahead and make tax deposits.

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