Form 945-A won’t take much time to complete, but filling out the varied tax returns it requires can be time consuming. This form, also known as the Annual Record of Federal Tax Liability, is used to report a business’s federal tax liability for a variety of forms. The liability is based on the dates payments were made or when wages were paid. The forms covered in Form 945-A include the following.
- Form 945 (used for nonpayroll payments)
- Form 945-X
- Form CT-1 (used for both employee and employer Tier I and Tier II taxes)
- Form CT-1X
- Form 944 (used for federal income tax withheld, plus both employee and employer SSA and Medicare taxes)
- Form 944-X
Form 945-A looks intimidating, but the real work lies in completing the required tax forms. The document is used only by semiweekly schedule depositors, or those who became semiweekly depositors because of an accumulated tax liability during any month. To complete, you’ll need to include figures for tax liability, not deposits.
Understanding Form 945-A
Form 945-A is used to report federal tax liability for a variety of forms. It must be completed and sent alongside the forms your business needs to file. Remember that the IRS will use Form 945-A to match the tax liability reported on returns, as well as to determine if you have deposited your tax liabilities on time. If your Form 945-A is not properly completed and filed with your return, you may receive a penalty.
As we’ve previously said, you’ll need to file Form 945-A if you’re a semiweekly schedule depositor. You will not need to complete this form if your net tax liability for the return period is less than $2,500. Additionally, you should not file this form if you’re a monthly schedule depositor unless the accumulated tax liability for any month of the year reaches $100,000. If you’re not sure whether you need to file, we recommend reviewing the Form 945-A instructions.
Using AMS to File Form 945-A
Recordkeeping comprises much of the time required to accurately file form 945-A. Whether you need to file for Form 944, Form 945, or Form CT-1, you’ll need to complete your required form. This will necessitate a robust dataset with all payments, both related and unrelated to payroll. Some businesses are better equipped to handle this than others. If you’re looking for an easy, comprehensive solution, products from Advanced Micro Solutions can help.
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Those who need to file returns related to payroll may want to consider AMS Payroll ($129), our semi-automated payroll system. The software calculates state, federal, and local taxes, then stores that information for later use. If you need to fill out Form 944 or Form CT-1, all you need to do is reach into the dataset and find the required figures.
If your needs are more specific to filing, our Forms Filer Plus ($49) may be the best option for your business. This software allows users to enter data onto digital facsimiles of the required form. From there, printing or electronically filing is easy. This software also includes Form 945-A support, so you can quickly and easily get your forms out.