Karen Kluster opened Lube and Wash on January 2, 20--. The business is subject to FICA taxes. At the end of the first quarter of 20--, Kluster, as president of the company, must file Form 941, Employer's Quarterly Federal Tax Return.

Employer's address:	234 OAK, AUSTIN, TX 78711-0234
Employer's ID number:	00-0005874
Phone number:	(512) 5551111
Date filed:	April 30, 20--

Each employee is paid semimonthly on the 15th and last day of each month. Shown below is the payroll information for the first quarter of 20--. All pay periods were the same.

PAYROLL INFORMATION FOR JANUARYMARCH

Federal

Quarterly

OASDI

Income

Total

Employee

SSN

Wage

Tax

HI Tax

Tax

Deductions

Net Pay

Paul Purson

000-00-7233

$4,550.00

$282.10

$65.98

$368.00

$716.08

$3,833.92

Matt Dirkson

000-00-8451

8,065.00

500.03

116.94

953.00

1,569.97

6,495.03

Joan Howard

000-00-3668

8,450.00

523.90

122.53

1,072.00

1,718.43

6,731.57

Dorrie Smith

000-00-6527

10,160.00

629.92

147.32

1,140.00

1,917.24

8,242.76

Totals

$31,225.00

$1,935.95

$452.77

$3,533.00

$5,921.72

$25,303.28

Employer's FICA taxes	$1,935.95		$452.76
for the quarter	OASDI		HI

The total taxes per payday are:

Employees' FICA TaxOASDI	$322.66
Employer's FICA TaxOASDI	322.66
Employees' FICA TaxHI	75.46
Employer's FICA TaxHI	75.46
Employees' FIT	588.83
Total	$1,385.07	6 deposits = $8,310.42 for the quarter

None of the employees reported tips during the quarter.

Using Form 941 below, prepare the return on the basis of the information shown above.

Note: Lines 5a and 5c of Form 941, tax on total taxable wages, are computed by multiplying by the combined tax rate for both employer and employee. Small differences due to rounding may occur between this total and the total taxes withheld from employees each pay period and the amount of the employer's taxes calculated each pay period. This difference is reported on line 7 as a deduction or an addition as "Fractions of Cents." Use minus sign to indicate a deduction. If line 7 is zero, for grading purposes only, enter a zero. Assume that company deposits taxes on monthly basis.

Hint: Line 7 instructions. Fill in Form 941 through line 6, and then fill in Part 2, line 16 or Schedule B. Take that information and fill in line 13. Lines 12 and 13 must equal. If the amounts are not the same, correct by entering amount to make equal on line 7. Line 7 differences are caused by how calculations are made on Form 941 and the amounts withheld from employee's earning plus the employer's payroll tax amounts each pay.

Form 941 for 20-- Employer's QUARTERLY Federal Tax Return (Rev. January 2019) Department of the Treasury Internal Revenue Service OMB No. 1545-0029 Employer identification number (EIN) 0 0 - 0 0 0 5 8 7 4 Report for this Quarter of 20-- (Select one.) Name (not your trade name) KAREN KLUSTER Trade name (if any) LUBE AND WASH Go to www.irs.gov/Form 941 for instructions and the latest information. Address 234 OAK Number Street Suite or room number AUSTIN TX 78711-0234 City State ZIP code Foreign country name Foreign province/county Foreign postal code Read the separate instructions before you complete Form 941. Type or print within the boxes. Part 1: Answer these questions for this quarter. 1 Number of employees who received wages, tips, or other compensation for the pay period including: Mar. 12 (Quarter 1), June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4) 1 4 2 Wages, tips, and other compensation .. 2 31,225 3 Federal income tax withheld from wages, tips, and other compensation. 3 3,533 4 If no wages, tips, and other compensation are subject to social security or Medicare tax Check and go to line 6. Column 1 Column 2 5a Taxable social security wages ..... x 0.124 = 5b Taxable social security tips x 0.124 = 5c Taxable Medicare wages & tips .... x 0.029 = 5d Taxable wages & tips subject to Additional Medicare Tax withholding x 0.009 = 5e Add Column 2 from lines 5a, 5b, 5c, and 5d 5e 5f Section 3121(9) Notice and Demand-Tax due on unreported tips (see instructions) 5f 6 Total taxes before adjustments. Add lines 3, 5e, and 5f 6 7 Current quarter's adjustment for fractions of cents 7 8 Current quarter's adjustment for sick pay ... 8 9 Current quarter's adjustments for tips and group-term life insurance 9 10 Total taxes after adjustments. Combine lines 6 through 9...... 10 11 Qualified small business payroll tax credit for increasing research activities. Attach Form 8974 11 12 12 Total taxes after adjustments and credits. Subtract line 11 from line 10 13 Total deposits for this quarter, including overpayment applied from a prior quarter and overpayments applied from Form 941-X, 941-X (PR), 944-X, or 944-X (SP) filed in the current quarter .. 14 Balance due. If line 12 is more than line 13, enter the difference and see instructions 13 14 15 Overpayment. If line 13 is more than line 12, enter the difference Check one: Apply to next return. Send a refund. Name (not your trade name) Employer identification number (EIN) KAREN KLUSTER 00-0005874 Part 2: Tell us about your deposit schedule and tax liability for this quarter. If you are unsure about whether you are a monthly schedule depositor or a semiweekly schedule depositor, see section 11 of Pub. 15. 16 Check one: a X a. Line 12 on this return is less than $2,500 or line 12 on the return for the prior quarter was less than $2,500, and you didn't incur a $100,000 next-day deposit obligation during the current quarter. If line 12 for the prior quarter was less than $2,500 but line 12 on this return is $100,000 or more, you must provide a record of your federal tax liability. If you are a monthly schedule depositor, complete the deposit schedule below; if you are a semiweekly schedule depositor, attach Schedule B (Form 941). Go to Part 3. b. You were a monthly schedule depositor for the entire quarter. Enter your tax liability for each month and total liability for the quarter, then go to Part 3. Tax liability: Month 1 Month 2 Month 3 Total liability for quarter Total must equal line 12. C. You were a semiweekly schedule depositor for any part of this quarter. Complete Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors, and attach it to Form 941. Tell us about your business. If a question does NOT apply to your business, leave it blank. Part 3: 17 If your business has closed or you stopped paying wages. Check here, and