If you’ve ever experienced a business reorganization, paid an incorrect amount on withholding tax, or had a financially confusing year, you’ve likely filled out Form 941-D. This form, also known as the Report of Discrepancies Caused by Acquisitions, is used to explain potential discrepancies between certain federal forms, including the W-2, the Wage and Tax Statement, and Form 941, the Employer’s Quarterly Federal Tax Return. Schedule D for Form 941 is used to explain potential differences between the totals of social security wages, Medicare wages and tips, social security tips, federal income tax withheld, and advanced earned income credit payments. Schedule D can also be used to verify if you have paid the appropriate taxes. In the simplest terms, this form reports acquisition-created discrepancies to the IRS.
Should I File Schedule D?
Not every merger or acquisition requires business owners or accountants to file a Schedule D for Form 941. You should only file this form if the business reorganization creates discrepancies between Forms W-2 and Forms 941. Remember that the IRS has specific requirements for business reorganization to meet the definitions of mergers and acquisitions. If you have any doubt about your business’s recent transition, you can find these definitions in the Form 941-D instructions.
Before filing your taxes, compare the totals on Forms 941 and W-2 to ensure they are identical. If they are different, and if your business recently experienced an acquisition, statutory merger, or consolidation, you will need to complete Form 941-D.
Understanding Form 941-D
Form 941-D looks like an intimidating form, but its primary use is to tell the IRS which type of business transition you experienced. You’ll need to enter personal information and the reported wages and tips for social security, Medicare, federal income tax, and advanced earned income credit as reflected in your forms 941 and W-2. You’ll also need to indicate whether you are filing after a statutory merger or consolidation, or after a specific type of acquisition. It is important to remember that, even if your W-2 and 941 numbers don’t line up, you are not in trouble. Rather, the fact that they are different is a result of an acquisition, and letting the IRS know this information is important.
How Accounting Software can Help
If you’re filling out 941-D, your business has likely experienced a massive change in recent months. Whether you were acquired by a corporation or are the surviving business, your accounting procedures have probably changed dramatically. If this is the case, now is the best time to upgrade your 941 filing and accounting software. Learn the ropes of your new business structure with a semi-automated accounting suite from Advanced Micro Solutions.
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Our accounting software tools can also significantly ease the burden of filling out form 941 and its attendant forms. We can help you combine payroll and tax accounting into a single software suite, making the transition from calculating employee checks to filing 940, 941, and other federal forms nearly seamless. We also have a variety of accounting tools your business may find useful, including:
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Whether you need support for 941-D or just want a new accounting or payroll support system, Advanced Micro Solutions has the answer.