Annual Payroll Reports: Forms 940, 1096 and 944

In part one of this two-part blog series, we went over some of the basics on annual payroll reports and the responsibilities employers have within this area. There are a few specific forms that employees might need to fill out depending on several factors, plus several that business owners or payroll specialists will also have to consider.

At WTA Inc., we’re happy to provide various business clients with numerous HR services, including payroll and tax administration solutions that cover these and several related areas. What are some of the other forms that might be part of your company’s payroll reports, and are they required in your case? Here’s a rundown.

annual payroll reports forms

Form 940, FUTA and SUTA

For those unaware, FUTA stands for the Federal Unemployment Tax Act, while SUTA stands for State Unemployment Tax Act. Both these laws offer temporary forms of income for workers who qualify — Form 940 is the one that’s used to document FUTA, and many SUTA areas as well.

If your business pays more than $1,500 in FUTA to employees in a calendar year, you are required to pay a Form 940 to the federal government by January 31 of the following year. In this case, you should receive a copy from your local state agency as well. If not, check with them directly to find out why and what you can do about it.

Form 1096

If your business utilizes and independent contractors, freelancers or similar resources, you must use Form 1096, the Annual Summary and Transmittal of US Information Returns. This reports all money paid out on accompanying Form 1099, plus gross earnings paid.

In addition, you must send out a 1099 form to any individual to whom you paid at least $600 for various services during the tax year. If you paid out less than that to a worker (at least $10 in royalties, for example) and don’t expect it to continue into 2012, then you can file Form 1099-MISC “to the IRS along with Form 1096,” according to Intuit.

Form 944

Finally, for small businesses that have under $1,000 in liability for federal income taxes and FICA, you may be able to file Form 944 — which allows you to pay taxes annually instead of quarterly. In other words, you may simply request to file a 944, the Annual Federal Tax Return for Small Businesses. The IRS website has additional details on this form and how it can be used in your case. As you may have guessed, this is only for very small or even part-time businesses.

For more on the various forms that may be involved in your company’s annual payroll report, or to learn about any of our hiring, tax/payroll or other HR services, speak to the staff at WTA Inc. today.