Small businesses should review the rules for filing two commonly used employment tax returns, the IRS advises.

The two forms, which are not interchangeable (that is, a small business either files one or the other), are:

  • Form 944 Employer's Annual Federal Tax Return
  • Form 941 Employer's Quarterly Federal Tax Return

Employers should never flip-flop between the two forms on their own, and should always file in accordance with their designated filing requirement.

Here are some more details about these two forms that will help you the differences between them:

Form 944

  • This form is for smallest employers to file and pay the above-mentioned taxes only once a year, instead of quarterly.
  • While this form is intended for employers who owe $1,000 or less, employers cannot file Form 944 unless they receive official IRS notification they are eligible to do so.
  • Once the employer receives notice they can file Form 944, they must file this form every year. They must continue to file Form 944, regardless of the tax they owe, unless the IRS notifies them differently.

Form 941

  • Employers use this form to report income taxes withheld from employee paychecks, and pay the employer's portion of Social Security or Medicare tax.
  • If the IRS advises the employer to file Form 941 quarterly return, they must do so.

If you are not sure which form to file, call the IRS at 800.829.4933.

Here are instructions on Form 944, the employer's tax guide, and additional tax information.