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13.4 Form 941 & Payroll Deposits

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1 Part 1, Chapter 1: Tax Return Basics & Filing Requirements

1.1 Form 1040 Overview & Structure 1.2 Form 1040-SR for Seniors 1.3 Who Must File (Income Thresholds) 1.4 Filing Deadlines & Extensions (Form 4868) 1.5 Penalties: Failure to File vs. Failure to Pay 1.6 Sources of Tax Information (W-2s, 1099s, K-1s) 1.7 Preparer Due Diligence Requirements 1.8 Amended Returns (Form 1040-X)

2 Part 1, Chapter 2: Filing Status & Dependents

2.1 Single & Married Filing Jointly 2.2 Married Filing Separately 2.3 Head of Household Requirements 2.4 Qualifying Surviving Spouse 2.5 Qualifying Child Test (5 Tests) 2.6 Qualifying Relative Test (4 Tests) 2.7 SSN, ITIN & Residency Status

3 Part 1, Chapter 3: Wages & Employee Compensation

3.1 W-2 Income & Withholding 3.2 Employee vs. Independent Contractor 3.3 1099-NEC, 1099-MISC & 1099-K Reporting 3.4 Fringe Benefits (Taxable vs. Non-Taxable) 3.5 Stock Options (ISO vs. NQSO) 3.6 Special Categories (Clergy, Military, Foreign)

4 Part 1, Chapter 4: Interest, Dividends & Other Income

4.1 Taxable vs. Tax-Exempt Interest 4.2 US Savings Bonds & OID 4.3 Ordinary vs. Qualified Dividends 4.4 Schedule B Requirements 4.5 Rental & Royalty Income Basics 4.6 Alimony, Gambling & Other Income 4.7 Cancelled Debt & Form 1099-C 4.8 Net Operating Loss (NOL)

5 Part 1, Chapter 5: Capital Gains & Property Transactions

5.1 Capital vs. Non-Capital Assets 5.2 Cost Basis Calculation 5.3 Inherited & Gifted Property Basis 5.4 Short-Term vs. Long-Term Gains 5.5 Capital Gains Tax Rates (0%, 15%, 20%) 5.6 Netting & the $3,000 Loss Limit 5.7 Wash Sales & Related Party Rules 5.8 Sale of Primary Residence (Section 121) 5.9 Installment Sales (Form 6252) 5.10 Like-Kind Exchanges (Section 1031)

6 Part 1, Chapter 6: Adjustments to Income

6.1 Educator Expenses & HSA Contributions 6.2 Self-Employment Tax Deduction 6.3 IRA Contributions (Traditional) 6.4 Student Loan Interest Deduction 6.5 Alimony Paid (Pre-2019 Divorces) 6.6 Other Adjustments & New OBBBA Deductions (Tips, Overtime, Auto Loan, Senior Bonus)

7 Part 1, Chapter 7: Deductions (Standard & Itemized)

7.1 Standard Deduction by Filing Status 7.2 Medical & Dental Expenses (7.5% Floor) 7.3 State & Local Taxes (SALT $40K Cap) 7.4 Mortgage Interest Deduction 7.5 Charitable Contributions 7.6 Casualty & Theft Losses 7.7 QBI Deduction (Section 199A)

8 Part 1, Chapter 8: Tax Calculation & Credits

8.1 Tax Tables & Rate Schedules 8.2 Alternative Minimum Tax (AMT) 8.3 Self-Employment Tax Calculation 8.4 Child Tax Credit & Additional CTC 8.5 Earned Income Tax Credit (EITC) 8.6 Education Credits (AOC & LLC) 8.7 Child & Dependent Care Credit 8.8 Other Credits (Saver's, Premium Tax)

9 Part 1, Chapter 9: Retirement Accounts & Social Security

9.1 Traditional vs. Roth IRA 9.2 401(k), 403(b) & TSP Basics 9.3 SEP-IRA & SIMPLE IRA 9.4 Required Minimum Distributions (RMDs) 9.5 Early Withdrawal Penalties & Exceptions 9.6 Social Security Taxation

10 Part 1, Chapter 10: Specialized Individual Returns

10.1 Estate Tax (Form 706) 10.2 Gift Tax (Form 709) 10.3 Foreign Income (Form 2555) 10.4 FBAR & FATCA Reporting 10.5 Farm Income (Schedule F) 10.6 Disaster Area Rules

11 Part 2, Chapter 11: Business Entity Types

11.1 Overview of Entity Types 11.2 State Law vs. Tax Classification 11.3 Entity Selection: Reasonable Comp & QBI 11.4 Form 8832 & Rev. Proc. 2009-41 11.5 LLC Deep Dive: Spouses & EINs 11.6 Changing Status: The 60-Month Rule

12 Part 2, Chapter 12: Starting a Business

12.1 Hobby vs. Business (Profit Motive) 12.2 Employer Identification Number (EIN) 12.3 Tax Year Selection 12.4 Recordkeeping Requirements 12.5 Statute of Limitations 12.6 Related Party Transactions 12.7 Start-Up Costs, Entity Choice & OBBBA Business Changes (2025)

13 Part 2, Chapter 13: Worker Classification & Payroll

13.1 Employee vs. Independent Contractor 13.2 Common Law Test (Behavioral, Financial, Relationship) 13.3 Statutory Employees & Non-Employees 13.4 Form 941 & Payroll Deposits 13.5 Trust Fund Recovery Penalty 13.6 FUTA & Unemployment Taxes

14 Part 2, Chapter 14: Accounting Methods & Income

14.1 Cash vs. Accrual Method 14.2 Hybrid Methods & Changes 14.3 Inventory & COGS 14.4 Gross Receipts & Income Recognition 14.5 Constructive Receipt 14.6 Form 1099 Reporting Requirements 14.7 §163(j) Business Interest Expense Limitation 14.8 §174 Research & Experimental Expenditures

15 Part 2, Chapter 15: Depreciation & Asset Treatment

15.1 MACRS Basics & Recovery Periods 15.2 Mid-Month, Mid-Quarter, Half-Year Conventions 15.3 Section 179 Expense Deduction 15.4 Bonus Depreciation 15.5 Listed Property Rules 15.6 Amortization of Intangibles 15.7 Depletion 15.8 Disposition of Business Assets

16 Part 2, Chapter 16: Business Deductions

16.1 Ordinary & Necessary Test 16.2 Business Travel Expenses 16.3 Business Meals (50% Limitation) 16.4 Business Use of Vehicle 16.5 Home Office Deduction 16.6 Business Interest Limitation (163(j)) 16.7 Business Bad Debts

17 Part 2, Chapter 17: Business Credits & Fringe Benefits

17.1 General Business Credit Overview 17.2 R&D Credit & Disabled Access Credit 17.3 Small Employer Health Insurance Credit 17.4 Fringe Benefit Rules 17.5 Cafeteria Plans (Section 125) 17.6 Achievement Awards & Other Benefits

18 Part 2, Chapter 18: Sole Proprietorships

18.1 Schedule C Overview 18.2 Calculating Net Profit/Loss 18.3 Self-Employment Tax (Schedule SE) 18.4 Estimated Tax Payments 18.5 Hobby Loss Rules

19 Part 2, Chapter 19: Partnerships

19.1 Partnership Formation 19.2 Partner's Basis Calculation 19.3 Form 1065 Overview 19.4 Schedule K-1 (Partner's Share) 19.5 Guaranteed Payments 19.6 Partnership Distributions 19.7 At-Risk & Passive Activity Rules 19.8 Partnership Termination & Liquidation

20 Part 2, Chapter 20: C Corporations

20.1 Form 1120 Overview 20.2 Corporate Tax Rate (21%) & CAMT 20.3 Accumulated Earnings Tax 20.4 Dividends Received Deduction 20.5 Earnings & Profits (E&P) 20.6 Corporate Distributions, Dividends & Stock Redemptions 20.7 §351 Transfers, §1032, §1202 QSBS & Other Corporate Provisions 20.8 Corporate Liquidation

21 Part 2, Chapter 21: S Corporations

21.1 S Election Requirements (Form 2553) 21.2 Form 1120-S Overview 21.3 Shareholder Basis Calculation 21.4 Reasonable Compensation 21.5 S Corporation Distributions 21.6 Built-In Gains Tax & Termination

22 Part 2, Chapter 22: Specialized Business Returns

22.1 Trusts & Estates (Form 1041) 22.2 Simple vs. Complex Trusts 22.3 Distributable Net Income (DNI) 22.4 Tax-Exempt Organizations (Form 990) 22.5 Retirement Plans (Form 5500) 22.6 Qualified Retirement Plans Overview 22.7 Farm Taxation 22.8 Rental Real Estate Activities

23 Part 3, Chapter 23: Practice Before the IRS

23.1 What is Practice Before the IRS? 23.2 Who Can Practice (Full Rights) 23.3 Limited Practice Rights (AFSP, Unenrolled) 23.4 Special Relationships (Family, Employees) 23.5 PTIN Requirements 23.6 Circular 230 Overview 23.7 Office of Professional Responsibility (OPR)

24 Part 3, Chapter 24: Becoming & Maintaining EA Status

24.1 Two Paths to EA (Exam vs. IRS Experience) 24.2 Application Process (Form 23) 24.3 Background & Compliance Checks 24.4 Renewal Requirements (Form 8554) 24.5 Continuing Education Requirements 24.6 Inactive Status & Termination

25 Part 3, Chapter 25: Practitioner Duties (Circular 230)

25.1 Due Diligence Requirements 25.2 Knowledge of Client's Omission 25.3 Conflict of Interest Rules 25.4 Fee Requirements (Contingent, Unconscionable) 25.5 Advertising & Solicitation Rules 25.6 Tax Return Position Standards 25.7 Written Advice Standards 25.8 Sanctions & Penalties for Violations

26 Part 3, Chapter 26: Power of Attorney & Authorization

26.1 Form 2848 (Power of Attorney) 26.2 CAF (Centralized Authorization File) 26.3 Form 8821 (Tax Information Authorization) 26.4 Third-Party Designee 26.5 Signing Returns for Taxpayers 26.6 Client Confidentiality & Privilege 26.7 Representing Clients in Audits (Examination) 26.8 Appealing IRS Decisions 26.9 Collection Representation

27 Part 3, Chapter 27: Legal Authority & Research

27.1 Hierarchy of Tax Authority 27.2 Internal Revenue Code 27.3 Treasury Regulations 27.4 Revenue Rulings & Procedures 27.5 Court Cases & Precedent 27.6 Statutes of Limitations

28 Part 3, Chapter 28: Specific Representation Issues

28.1 Trust Fund Recovery Penalty (TFRP) 28.2 Innocent Spouse Relief (Form 8857) 28.3 Injured Spouse Allocation (Form 8379) 28.4 Penalty Abatement (FTA & Reasonable Cause) 28.5 Taxpayer Advocate Service (TAS) 28.6 Freedom of Information Act (FOIA)

29 Part 3, Chapter 29: Final Review & Exam Strategy

29.1 Exam Structure & Logistics (2026-2027) 29.2 The "Clock" of Representation (Master Deadlines) 29.3 Ethics vs. Law (Sanctions & Penalties) 29.4 Final Mock Review & Exam Strategy

30 Part 3, Chapter 30: Filing Process & E-File

30.1 E-File Requirements (The "More Than 10 Returns" Rule) 30.2 ERO Responsibilities 30.3 EFIN & Application Process 30.4 Form 8879 (Signature Authorization) 30.5 Record Retention & Data Security (WISP) 30.6 Preparer Penalties (Filing Specific)

13.4 Form 941 & Payroll Deposits

Key Takeaways Explain This Topic AI

Lookback period: 12 months ending June 30 of the second preceding year.

Monthly depositor: lookback liability ≤ $50,000. Semi-weekly: > $50,000.

$100,000 next-day deposit rule: any single-day liability ≥ $100,000 due next business day.

Form 941: quarterly (Apr 30, Jul 31, Oct 31, Jan 31). Form 944: annual if liability ≤ $1,000.

Form 943 for agricultural employers; Form 940 for FUTA (Jan 31).

2025 FICA: SS 6.2% to $176,100 wage base ($10,918.20 max each side); Medicare 1.45% uncapped + 0.9% additional above $200K/$250K thresholds.

W-2 / W-3 furnish-and-file deadline: January 31 (paper or e-file). 1099-NEC also Jan 31. 1099-MISC paper Feb 28 / e-file Mar 31.

Last updated: October 2026

Why This Matters for the Exam

Deposit timing is heavily tested. Know the lookback period, deposit schedules, the $100,000 next-day rule, and the 2025 FICA/Medicare numbers.

2025 FICA / Medicare Quick Reference

  • Item 2025 Amount
  • Social Security wage base $176,100 (up from $168,600 in 2024)
  • SS rate (each side) 6.2%
  • Maximum employee SS tax $10,918.20
  • Maximum employer SS tax $10,918.20
  • Maximum SE Social Security portion $21,836.40 (both sides)
  • Medicare rate (each side) 1.45% on all wages (no cap)
  • Additional Medicare (employee only) 0.9% on wages above $200K Single / $250K MFJ / $125K MFS
  • Combined SE tax rate 15.3% (12.4% SS up to $176,100 + 2.9% Medicare unlimited)
  • Half SE tax deduction Still deductible as adjustment to income (unchanged)

Employers must withhold the additional 0.9% Medicare from any employee whose wages with that employer exceed $200,000 in the calendar year — regardless of filing status. The employer does not match the 0.9%.

Determining Deposit Schedule

  • Lookback Liability Schedule
  • ≤ $50,000 Monthly depositor
  • > $50,000 Semi-weekly depositor
  • Lookback Period
  • Tax Year Lookback Period
  • 2025 July 1, 2023 – June 30, 2024
  • 2026 July 1, 2024 – June 30, 2025
  • 2027 July 1, 2025 – June 30, 2026
  • Deposit Due Dates
  • Depositor Payday Deposit Due
  • Monthly Any 15th of following month
  • Semi-weekly Wed–Fri Following Wednesday
  • Semi-weekly Sat–Tue Following Friday
  • The $100,000 Next-Day Rule
  • Rule Description
  • Trigger $100,000+ accumulated payroll tax liability on any single day
  • Due Next business day
  • Effect Employer becomes semi-weekly for the remainder of the year and all of the following year
  • EFTPS

All federal tax deposits must be made electronically through EFTPS (Electronic Federal Tax Payment System). Form 8109 paper coupons are obsolete.

Form 941 Due Dates

  • Quarter Period Due Date
  • Q1 Jan–Mar April 30
  • Q2 Apr–Jun July 31
  • Q3 Jul–Sep October 31
  • Q4 Oct–Dec January 31
  • Form 944 (Annual Small Employer)
  • Requirement Description
  • Eligible Annual liability ≤ $1,000
  • Due January 31
  • IRS notice Must receive IRS permission to file 944 instead of 941
  • Form 943 (Agricultural)
  • Element Description
  • Used by Employers of farmworkers
  • Filed Annually
  • Due January 31
  • De Minimis Rule
  • Liability Procedure
  • < $2,500 for the quarter Pay with Form 941 (no deposit required)
  • W-2 / W-3 and 1099 Reporting Deadlines
  • Form Furnish to recipient File with SSA / IRS
  • W-2 / W-3 January 31 January 31 (paper or e-file)
  • 1099-NEC January 31 January 31
  • 1099-MISC January 31 (Box 8/10: Feb 15) Paper Feb 28 / e-file March 31

2025 1099 thresholds:

1099-NEC — $600 (unchanged for 2025). OBBBA raises the threshold to $2,000 (indexed) starting tax year 2026 — does NOT apply to 2025 returns.

1099-MISC — $600 (also rises to $2,000 in 2026 under OBBBA).

1099-K (TPSO payments) — OBBBA permanently reset the threshold to $20,000 AND more than 200 transactions for 2025 and forward, ending the IRS phase-down that would have lowered it to $600.

Form W-9 and Backup Withholding

Form W-9 — used to gather the contractor's TIN before payment.

Backup withholding — 24% federal income tax withholding when the payee fails to provide a TIN, the IRS notifies of a name/TIN mismatch, or a second B-notice is received.

Lookback Calculation Example (for 2025)

  • Quarter Liability
  • Q3 2023 $12,000
  • Q4 2023 $15,000
  • Q1 2024 $14,000
  • Q2 2024 $11,000
  • Total $52,000
  • Result Semi-weekly depositor for 2025
  • Real-World Scenario (2025)

Scenario: A semi-weekly depositor pays Friday bonuses, creating a $110,000 single-day liability.

$100,000 rule: Triggered.

Deposit due: Following Monday (next business day).

Future: Semi-weekly for the rest of 2025 and all of 2026.

On the Exam

Question types to practice on deposits and payroll forms:

  • Lookback Questions: "What is the 2025 lookback period?"
  • Schedule Questions: "$45,000 lookback — which schedule?"
  • $100,000 Questions: "When is the deposit due?"
  • 2025 Number Questions: "What is the 2025 SS wage base?" / "Maximum employee SS tax?"

The key is to remember: Lookback = July 1 – June 30 of the second prior year. ≤ $50K = monthly. > $50K = semi-weekly. $100K = next day. 2025 SS wage base = $176,100; max employee SS tax = $10,918.20. W-2 and 1099-NEC due Jan 31.