Form 941 Penalties For Late Filing and Late Payment

You will be subjected to penalties if you fail to file your Form 941 within the filing deadline. The penalties for not filing Form 941 on time are as follows.

• A penalty of 5% of the total tax due.
• An additional 5% of the total tax due for each month the filing is due until it reaches a maximum of 25%.

The failure to deposit (FTD) penalty is calculated based on the number of calendar days the deposit is late, starting from the actual due date.

If you do not pay the owed tax, you will be charged a penalty of 0.5% of the tax due in addition to the penalty for not filing. This 0.5% will increase each month the tax is due. The penalty amount will increase to 1% of your tax due, 10 days after the IRS sends an intent to levy notice.

If you fail to pay your balance tax dues within the 941 deadline, you will receive a CP161 notice from the IRS regarding your penalties.

The penalty imposed will depend upon the tax amount owed and how late the payment was.

Here’s what you can do to avoid penalties and interest from the IRS.

• Pay the full tax amount you owe within the deadline.
• Complete your Form 941 on time.
• Report your tax liability accurately.
• Submit valid checks for payment of taxes.
• Provide accurate Form W-2 to your employees.
• File Form W-3 and Copy A of Forms W-2 with the SSA on time.

You can avoid paying the penalties if you plan ahead of your deadline and file your Form 941 and pay the required taxes within the quarterly deadline.

If you can show a reasonable cause as to why you haven’t filed Form 941 or paid the required taxes within the deadline, the IRS might consider waiving your penalties.