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Video instructions and help with filling out and completing Will 940 Schedule Return

Instructions and Help about Will 940 Schedule Return

In this presentation we will reconcile our year-end payroll forms and in essence double check that they've been filled out correctly for more accounting information and accounting courses visit our website at accounting instruction dot info so we have here our forms 941 and the w3 these are the two forms that we can use to reconcile each other and make sure that the two forms have been filled out correctly we can double check in other words our quarterly form by tying it out to the w3 and vice-versa check the w3 - the quarterly forms remember what these quarterly forms are doing is they're are calculating the three main taxes which are the FI t federal income tax for the employees the social security tax for employees and employer and the Medicare tax for employees and employers this is going to be done on a quarterly basis so we got January February March April May June July August September October November December or quarter for quarter three quarter to quarter one the w3 of course is just a yearly form that will be reported at the end of the year summarizing all the W tubes that we send to both the employees and the IRS so what we can do is double check these forms because we can see here on the totals here we have the total wages Social Security and Medicare wages as well as the calculations for federal income tax Social Security tax and Medicare taxes which have been withheld so to do that we're gonna try to match these up now what we don't show here is the 940 the net form 940 which is the year-end form and that's because it's reporting futa which is just a tax for is an employer only tax and therefore not reported on the w3 it is possible for us to kind of compare the food of wages but we still have to do some reconciling to make sure that we're picking up the correct wages on food on the futa form which is a yearly form the form 940 so common misconception would be that the quarterly forms the 940 ones the IRS wants us to report everything quarterly and then summarize that same information again on the yearly form 940 not necessarily the case that forms 940 ones report the three main taxes the big taxes the FI t federal income tax Social Security and Medicare which the IRS wants to see on a quarterly basis whereas the form 940 reports a tax it's usually a lot smaller futa federal unemployment tax and therefore the IRS is happy or content enough I guess just to see that reported on a yearly basis rather than on a quarterly basis so they're actually two different things were reconciling their so if we look at what we have these we have quarter three and quarter four in this example we only have two quarters rather than four quarters and that'll make it a little bit easier for us to show how this reconciling process would work if we have four quarters of data then of course we would just add up the four quarters of data so on the 940s over here this box box two is the wages and tips box and these are really wages and tips for fi t-- calculation meaning this and this for the two quarters should add up to this box one so if we were to tie this out to double check everything at the end of the year we're gonna say okay but nine one four to five point one plus the one three five nine over nine point nine should add up to the two twenty seven three three five and you might even even subtract it sometimes two two seven seven three three five minus that should go to zero so that would tie out and then we're taking a look at the federal income tax withheld box three should tie out to the federal income tax box two on the w3 now again you can't tie this number to this number because it's too complex because it'll change by employee but we can sum them up and double check that way so again it's not flat tax so we can't do a simple calculation from the wages to the tax we can take the one seven over three point two six plus the two five to 12.4 and that should give us the 42 to 1566 if we subtract that 42 to fifteen point six six back to zero then we'll take the social security wages so we have the social security wages here and here that's your title to Social Security wages here on the w3 so if we were to add the social security wages up we're adding the nine six nine seven 3.5 and the nine seven six three two point five to get the one 94606 so if we subtract out what we have one 94606 pack down to zero and then we're looking for the social security here now this is where it gets a little bit complex this is the actual tax and it this could differ from the tax that we're going to see over here so let's see why we're gonna add up the one two oh two four point seven one and down here the one to one over six point four three and that's gonna differ and it will always differ by the way the 12,000 65-57 why because we multiplied this by twice the amount this in other words is not point O six - but point one two four or twice the wages in other words it's the employer and employee portion so if we take this amount and divide by two will get just the employee portion which is what's reported on the w-2s and the W three same is going to be.

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