USA Form 941/Payroll deposits

[rmpodiatry]

Hello, I recently purchased a business and know that my payroll taxes will need to be deposited monthly. My question is regarding the first deposit - since last quarter my payroll responsibility was $0, can I deposit this 1st month's (and the next 2 months) taxes at the end of this quarter as the Form 941 seems to indicate? Then after the quarter I will start my monthly deposits on the 15th? Or do I have to do monthly deposits from day 1 even though last quarter my business had no payroll? Thanks for any input guys!

 

[DTA93433]

Per (2016 - Pub 15, p. 25) - New employers. Your tax liability for any quarter in the lookback period before you started or acquired your business is considered to be zero. Therefore, you are a monthly schedule depositor for the first calendar year of your business. However, see the $100,000 Next-Day Deposit Rule, later in this section.

If you payroll responsibility was $0 last quarter - as you say, then no deposit is necessary. You just file a $0 Form 941 return for last quarter.

But continue to make your monthly (employment tax) deposits by the 15th of the following month for the current quarter.

FUTA tax deposit rules are different (Pub 15, p 35). If your FUTA tax liability for any calendar quarter is over $500 (including any FUTA tax carried forward from an earlier quarter), you must deposit the tax by EFT. If your FUTA tax liability for any calendar quarter is $500 or less, you don't have to deposit the tax. Instead, you may carry it forward and add it to the liability figured in the next quarter to see if you must make a deposit.

 

[rmpodiatry]

Hi Stephen, thank you for replying! I see that I will be a monthly depositor for the first year and not semi-weekly. For this current quarter though, since last quarter was $0 liability, can I make my deposit payments with the current quarter's return and not monthly as per page 24 of Pub 15?
Payment with return. You may make a payment with
Form 941 or Form 944 instead of depositing, without incurring
a penalty, if one of the following applies.
Your Form 941 total tax liability for either the current
quarter or the preceding quarter is less than $2,500,
and you didn't incur a $100,000 next-day deposit obligation
during the current quarter. If you aren't sure
your total tax liability for the current quarter will be less
than $2,500, (and your liability for the preceding quarter
wasn't less than $2,500), make deposits using the
semi-weekly or monthly rules so you won't be subject
to an FTD penalty.

Or does the new employer rule supercede the above? Thanks again for any help!

 

[DTA93433]

Yes this is true. If your total tax deposit for either the current or preceding quarter is less than $2,500, you may make a payment with the return. However, the payment must be made via an EFT. If you haven't set one up; I'd strongly suggest setting up an account using EFTPS to make these deposits. My advice, don't e-file the 941 showing a payment until the payment actually posts. (I've been burned).