Running a business with employees can be hard work. One way business owners can make things a little easier on themselves is by filing payroll and employment taxes electronically.
Filing the forms electronically saves time; is secure and accurate; and the filer gets an email confirmation that the IRS received the form within 24 hours.
Businesses can e-file by submitting the forms themselves or by having their tax professional file them.
Employers submitting the forms themselves need to purchase IRS-approved software, and there may be a fee to file electronically.
Software providers listed on the IRS' Tax Year 2021 94x Modernized e-File (MeF) Providers page are Approved IRS e-file Providers and have passed the IRS Assurance Testing System (ATS) requirements for Software Developers of electronic Employment Tax Returns for Tax Year 2021. Meeting the requirements means that the software can provide correct data in the proper format for processing by IRS systems; but, they are not part of, nor do they have any special relationship with the Internal Revenue Service.
The software will require a signature by one of two ways:
The user will need to apply for an online signature PIN. You can apply for a 10-digit signature PIN and become an IRS Authorized Signer, and you would use the PIN to electronically sign your employment tax returns, using IRS-approved software.
The user must be one of the following:
Sole Proprietor for a sole proprietorship
Partner with 5% or more interest in a partnership or person authorized to act in legal and or tax matters
President, Vice President, Secretary or Treasurer of a corporation
Other: The Principal for an entity that is not a sole proprietorship, partnership, or corporation must be an individual authorized to act in legal and or tax matters
As an IRS Authorized Signer, you are stating that you are a person or principal who can legally bind the entity. You are authorized to sign and act in tax matters on behalf of the business identified on your application.
Steps to Apply and Use Your PIN:
Complete the on-line signature PIN registration process, which is in the software package.
Once approved, the IRS will send a 10-digit PIN. Allow at least 45 days to receive the PIN.
The PIN will be received in a sealed and uncompromised envelope. Sign the statement of receipt and return it to the address shown on the letter within 10 business days from the date of the letter.
Use the designated PIN to sign the employment tax returns electronically. This authenticates that you are the IRS Authorized Signer when the returns are submitted electronically.
The user can instead scan and attach Form 8453-EMP, Employment Tax Declaration for an IRS e-file Return. Use this form to:
authenticate an electronic employment tax return;
authorize an electronic return originator (ERO) or an intermediate service provider (ISP) to transmit via a third party; and
authorize an electronic funds withdrawal for payment of federal taxes owed.
If employers choose to have their tax professional file the forms for them instead of doing it themselves., the Authorized IRS e-file Providers for Individuals and Businesses can help them locate an Electronic Return Originator near them.
Here are some of the forms employers can e-file:
Form 940, Employer’s Annual Federal Unemployment Tax Return Employers use this form to report annual Federal Unemployment Tax Act tax.
Form 941, Employer's Quarterly Federal Tax Return Employers use this form to report income taxes, social security tax or Medicare tax withheld from employees' paychecks. They also use it to pay their portion of Social Security or Medicare tax.
Form 943, Employer's Annual Federal Tax Return for Agricultural Employees Employers file this form if they paid wages to one or more farmworkers and the wages were subject to social security and Medicare taxes or federal income tax withholding.
Form 944, Employer's Annual Federal Tax Return Small employers use this form. These are employers whose annual liability for social security, Medicare and withheld federal income taxes is $1,000 or less. These employers use this form to file and pay these taxes only once a year instead of every quarter.
Form 945, Annual Return of Withheld Federal Income Tax Employers use this form to report federal income tax withheld from nonpayroll payments.