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) 555-1111 April 30, 20-- Date filed: 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 JANUARY-MARCH OASDI Quarterly Wage Federal Income Tax Total Deductions Employee SSN Tax HI Tax Net Pay Paul Purson 000-00-7233 $12,000.00 $744.00 $174.00 $1,260.00 $2,178.00 $9,822.00 Matt Dirkson 000-00-8451 12,600.00 781.20 182.70 1,200.00 2,163.90 10,436.10 Joan Howard 000-00-3668 12,500.00 775.02 181.26 1,080.00 2,036.28 10,463.72 Dorrie Smith 000-00-6527 10,800.00 669.60 156.60 1,140.00 1,966.20 8,833.80 Totals $47,900.00 $2,969.82 $694.56 $4,680.00 $8,344.38 $39,555.62 Employer's FICA taxes $2,969.80 $694.55 for the quarter OASDI HI The total taxes per payday are: Employees' FICA Tax-OASDI $494.97 Employer's FICA Tax-OASDI 494.97 Employees' FICA Tax-HI 115.76 Employer's FICA Tax-HI 115.76 Employees' FIT 780.00 Total $2,001.46 x 6 deposits = $12,008.76 for the quarter None of the employees reported tips during the quarter. Using Form 941 below, prepare the return based on 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." 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 10. Lines 6 and 10 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--: (Rev. April 2020) Employer's QUARTERLY Federal Tax Return 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/Form941 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: June 12 (Quarter 2), Sept. 12 (Quarter 3), or Dec. 12 (Quarter 4). 1 2 Wages, tips, and other compensation 2 3 3 Federal income tax withheld from wages, tips, and other compensation If no wages, tips, and other compensation are subject to social security or Medicare tax 4 Check and go to line 6. Column 1 Column 2 Taxable social security wages 5a x 0.124 = (i) Qualified sick leave wages. 5a x 0.062 = 5a (ii) Qualified family leave wages X 0.062 = Taxable social security tips .. 5b x 0.124 = Taxable Medicare wages & tips .. 5c x 0.029 = 5d Taxable wages & tips subject to Additional Medicare Tax withholding x 0.009 = 5e Total social security and Medicare taxes. Add Column 2 from lines 5a, 5a(i), 5a(ii), 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 11a Qualified small business payroll tax credit for increasing research activities. Attach Form 8974 . 11a 11b Nonrefundable portion of credit for qualified sick and family leave wages from Worksheet 1 11b 11c Nonrefundable portion of employee retention credit from Worksheet 1 . 11c You MUST complete all three pages of Form 941 and SIGN it. Next - For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher. Cat. No. 17001Z Form 941 (Rev. 4-2020) Name (not your trade name) Employer identification number (EIN) KAREN KLUSTER 00-0005874 Part 1: Answer these questions for this quarter. (continued) 11d Total nonrefundable credits. Add lines 11a, 11b, and 11c. 11d 12 Total taxes after adjustments and nonrefundable credits. Subtract line 11d from line 10. 12 13a 13a 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. 13b Deferred amount of the employer share of social security tax ..... 13b 13c Refundable portion of credit for qualified sick and family leave wages from Worksheet 1 13c 13d Refundable portion of employee retention credit from Worksheet 1 13d 13e Total deposits, deferrals, and refundable credits. Add lines 13a, 13b, 13c, and 13d. 13e 13f Total advances received from filing Form(s) 7200 for the quarter. 13f 13g Total deposits, deferrals, and refundable credits less advances. Subtract line 13f from line 13e 13g 14 Balance due. If line 12 is more than line 13g, enter the difference and see instructions 14 15 Overpayment. If line 13g is more than line 12, enter the difference Check one: Apply to next return. Send a refund. Part 2: Tell us about your deposit schedule and tax liability for this quarter. If you're unsure about whether you're a monthly schedule depositor or a semiweekly schedule depositor, see section 11 of Pub. 15. 16 Check one: 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're a monthly schedule depositor, complete the deposit schedule below; if you're 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. Go to Part 3. You MUST complete all three pages of Form 941 and SIGN it. Next Page 2 Form 941 (Rev. 4-2020) Show Me HOW Name (not your trade name) Employer identification number (EIN) KAREN KLUSTER 00-0005874 Part 3: Tell us about your business. If a question does NOT apply to your business, leave it blank. Check here, and 17 If your business has closed or you stopped paying wages enter the final date you paid wages / also attach a statement to your return. See instructions. 18 If you're a seasonal employer and you don't have to file a return for every quarter of the year. Check here. 19 Qualified health plan expenses allocable to qualified sick leave wages 19 20 Qualified health plan expenses allocable to qualified family leave wages 20 21 Qualified wages for the employee retention credit. 21 22 Qualified health plan expenses allocable to wages reported on line 21 22 23 Credit from Form 5884-C, line 11, for this quarter 23 24 Qualified wages paid March 13 through March 31, 2020, for the employee retention credit (use this line only for the second quarter filing of Form 941) 24 25 Qualified health plan expenses allocable to wages reported on line 24 (use this line only for the second quarter filing of Form 941) 25 Part 4: May we speak with your third-party designee? Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with the IRS? See the instructions for details. Designee's name and phone number Select a 5-digit Personal Identification Number (PIN) to use when talking to the IRS. Part 5: Sign here. You MUST complete all three pages of Form 941 and SIGN it. Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge. Print your KAREN KLUSTER Sign your name here Karen Kluster name here Print your PRESIDENT title here Date 4/30/-- Best daytime phone 512-555-1111 Paid Preparer Use Only Check if you're self-employed .... Preparer's name PTIN Preparer's signature Date Firm's name (or yours if self-employed) EIN Address Phone City State ZIP code Page 3 Form 941 (Rev. 4-2020) Source: Internal Revenue Service