 In this discussion, we will discuss the discussion question of discuss payroll tax forms and employer requirements related to them. If we have a question like this in a discussion question, we may first want to list out the types of forms that we need to process for payroll. The one that might come to mind first as employees, typically someone who has worked at a company, would be the W2 form, the form we receive at the end of the year as employees reporting our income. So that's the first one we might list, because that's the first one that might come to mind. The quarterly form that we have to put in place, what's called a form 941, so a 941 form. And then there's another form, which is a form 940 form, which is not as related as it seems, but it's going to be the annual form, and that's going to be for FUTA. So first we might just want to list out the forms, and those are going to be the types of forms that we have. We also have a W3 form, and we could list out a W4 form as well. So if we start to go through these, we can start to think through them possibly in a yearly fashion, how would we actually be processing these forms. We would first start with a new employee, that would be a W4 form that would be filled out, and that's going to give us all the information that we typically used to put the employee into our system, including name, social security number, number of allowances that we're going to be used in order to calculate the federal income tax, and more position of the employee possibly could be there. So those are going to be used in order to calculate the withholdings that we will need. And then we're going to have the quarterly forms, which are the 941 forms. So they're going to need to be reported each quarter. So remember that each quarter is only three months. Sometimes I used to think quarters just remind me of four, you know, but remember that we're talking 12 months divided by a quarter four gives us three months. So they're they're going to be due for every three months. The quarterly 941 forms, January, February, March, April, May, June, July, August, September, October, November and December being the four quarters. Those are going to be the biggest forms, the ones that the IRS is most concerned with, because they're going to be providing the big taxes, including the FIT federal income tax. Remember that the FIT federal income tax is the employee tax that we're reporting here. We the employee are responsible for reporting the employee taxes that we withheld from the employee. And so it's really the employee's responsibility. We withheld the taxes to keep that separate in our mind than the federal income tax that we will pay as the employer on our net income taxable income of these. Then we're going to have also the Social Security and Medicare that will be reported on 941 form 941. So that's going to include both the employee and employer portion of Social Security and Medicare. It's important to note that the form 941 is an information return. So we should have already paid, in other words, the tax on it. And the 941 should then recalculate what the liability is, or the withholdings we withheld and the liabilities for Social Security and Medicare. And until the IRS, hey, we already paid this typically, usually hopefully if it was done correctly. And then we don't owe anything at that point in time if we paid the amount. And it should be somewhat equal as not not like it would be for the form 1040, where, which is our end of the year reporting, where in that case, we typically have already paid. But we probably paid a little too much for most people and going to get a refund. Here it should be pretty much exact and the payment should match out. Then we have the yearly form, the form 940. Now you would think because it's a yearly form, and it sounds so similar with the form 940 and the 941, that they're somewhat related in some way or more related than they actually are. The form 940 has to do with a federal income tax, but not the main ones that the 941 has to do with. In other words, you might think that we'd have to do the 9, the quarterlies, the 941s, and then summarize it up again yearly with the 940. And that's not what happened, what's happening here. The IRS is not saying we're going to make you do four returns throughout the year and then sum up the same data again at the end of the year. What is happening is that we have two types of taxes that we are reporting. So remember the 941 covers the main ones, which is going to be the FIT, federal income tax, social security, and Medicare. Whereas the 940 is covering the much smaller tax, which will be the FUTA tax, federal unemployment tax. So because it's much smaller, this is my rationale for why the IRS probably requires this only to be a yearly form, as opposed to a quarterly form, because it's a lot less of an amount. Therefore the IRS is saying, hey, this form is going to be similar kind of to your reporting of the 1040 that we do individually, our individual tax return, in that we'll just have to report it one time a year at the end of the year. But because the other form, the 941 and the federal income tax, the Medicare and the Social Security are so big, so important, we want to increase the reporting of those to a quarterly reporting. So the 940 then is going to be reported once a year. It's not summing up the 941s, it's it's summing up or the year's worth of FUTA, which is federal unemployment tax. Same type of idea will recalculate the FUTA and that's going to be on wages that are over 7000 for each employee, which is a fairly low cap. And then we'll multiply that times the FUTA rate and that'll typically be the FUTA that would be owed. We would recalculate the liability and once again it should already have been paid and therefore the liability should match the payment made and it once again will be an information report. Therefore not something that's telling us how much we owe. Hopefully we don't owe anything, hopefully it's paid off as it should be before we do the report. Then we have the form W2 and form W3. Those are going to be related, those are going to be done at the end of the year. As we know probably from receiving them we're going to say that the W2 is going to have the wages on it and something that we're going to use in order to fill out our form 1040. The W2 will have the wages for the federal income tax in box one, box two will have the amount withheld for federal income tax, box three I believe is going to have the amount of wages for social security which could differ if it was, if someone hit the cap on it, the wage cap on it or if there's something like a cafeteria plan. I think box four is going to have the tax paid for social security, box five Medicare wages which could differ from the other two wage boxes, box one and three if there's a cafeteria plan and there's no cap on Medicare. So Medicare is probably the closest the Medicare wages to actual wages because box one federal income tax wages could be reduced by things like a 401k plan which is fairly common. So box you know the Medicare wage won't be reduced by that fairly significant amount and then we'll have of course the Medicare withholdings on that. So it's going to give our information report note that it's really important to note that we're going to give a form W2 both to the employees as well as the government so the IRS knows the W2 so that's an information report. We're basically reporting to our employees hey this is what you need to report on your 1040 and we're reporting it to the IRS so it's also saying hey we've have reported this to the IRS and what you report should match what we've reported there because this is what we're telling the IRS that you made. So if you have a problem with that if it's wrong then you need to address it with us because the IRS is going to receive the same information. Then we have the form W2 or W3 which is just going to be a summary of the W2 you can think of like all the W2 people glumped together into one individual one person with all his people on it and then that's going to be the W3 so box one would be the sum of all the federal income tax wages from all employees box two the sum of all withholdings from all employees and so on and so forth off the payroll you accounting I don't know anyone in accounting