| Instructions for Form 944-SS |
2006 Tax Year |
This is archived information that pertains only to the 2006 Tax Year. If you
are looking for information for the current tax year, go to the Tax Prep Help Area.
Part 1:Answer these questions for 2006
Employers in American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands are not required
to complete lines
1, 2, 5, 6b, 6d, 8, 9, and 14 on Form 944-SS.
3. If no wages, tips, and other compensation are subject to social security or Medicare tax...
If no wages, tips, and compensation are subject to social security or Medicare taxes, check the box on line 3 and go to line
6. If this question
does not apply to you, leave the box blank. For more information about exempt wages, see section 12 of Pub. 80 (Circular SS)
and section 4 of Pub.
15-A, Employer's Supplemental Tax Guide.
4. Taxable social security and Medicare wages and tips
4a. Taxable social security wages.
Report the total wages, sick pay, or fringe benefits subject to social security taxes that you paid to your employees
during the year.
Enter the amount before deductions. Do not include tips on this line. For information on types of wages subject to social security
taxes, see section 4 of Pub. 80 (Circular SS).
The rate of social security tax on taxable wages is 6.2% (.062) each for the employer and employee or 12.4% (.124)
for both. Stop paying social
security tax on and reporting an employee's wages on line 4a when the employee's taxable wages (including tips) reach $94,200
during 2006. However,
continue to withhold Medicare taxes for the whole year on wages and tips even when the social security wage base of $94,200
has been reached.
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line 4a
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(column 1)
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| x.124 |
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|
line 4a
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(column 2)
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4b. Taxable social security tips.
Enter all tips your employees reported to you during the year until the total of the tips and wages for an employee
reach $94,200 in 2006. Do this
even if you were unable to withhold the 6.2% employee's share of social security tax.
An employee must report cash tips to you, including tips you paid the employee for charge customers, totaling $20
or more in a month by the 10th of
the next month. Employees may use Form 4070, Employee's Report of Tips to Employer, or submit a written statement or electronic
tip record.
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line 4b
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(column 1)
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| x .124 |
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|
line 4b
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(column 2)
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4c. Taxable Medicare wages & tips.
Report all wages, tips, sick pay, and taxable fringe benefits that are subject to Medicare tax. Unlike social security
wages, there is no limit on
the amount of wages subject to Medicare tax.
Include all tips your employees reported during the year, even if you were unable to withhold the employee tax of
1.45%.
|
line 4c
|
(column 1)
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| x .029 |
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|
line 4c
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(column 2)
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For more information, see sections 4, 5, and 7 of Pub. 80
(Circular SS).
4d. Total social security and Medicare taxes.
Add social security tax, social security tips tax, and Medicare tax.
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line 4a
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(column 2)
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|
line 4b
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(column 2)
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| +line 4c |
(column 2) |
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line 4d
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Enter tax amounts on lines 6a-6e that result from current or prior period adjustments. Use parentheses (if possible) to show an
adjustment that decreases the total taxes shown on line 4d. Otherwise, use a minus sign. Do not enter an amount on 6e unless the IRS has
sent you a notice instructing you to do so.
6a. Current year's adjustments.
In certain cases, you must adjust the amounts you reported as social security and Medicare taxes in column 2 of lines
4a, 4b, and 4c to figure your
correct tax liability for this year's Form 944-SS. See section 9 of Pub. 80 (Circular SS). Do not attach Form 941c or an equivalent
statement for current year adjustments.
Fractions of cents.
Enter adjustments for fractions of cents (due to rounding) relating to the employee share of social security and Medicare
taxes withheld. The
employee share (one-half) of amounts shown in column 2 of lines 4a-4c may differ slightly from amounts actually withheld from
employees'
paychecks due to rounding social security and Medicare taxes based on statutory rates.
Sick pay.
Enter the adjustment for the employee share of social security and Medicare taxes that were withheld by your third-party
sick pay payer.
Adjustments for tips and group-term life insurance.
Enter adjustments for both the following items.
-
Any uncollected employee share of social security and
Medicare taxes on tips.
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The uncollected employee share of social security and
Medicare taxes on group-term life insurance premiums
paid for former employees.
6c. Prior years' social security and Medicare tax adjustments.
Use line 6c to adjust amounts reported on previous returns. If you need to report both an increase and a decrease for the same line,
show only the difference.
Adjustments you report here change your tax liability and your tax deposits. You will have to take these adjustments
into account on lines 13a to
13l. Fill in your tax liability amounts for each month. You must explain any adjustments that you make on Form 941c, Supporting Statement
to Correct Information, or in an equivalent statement.
Form 941c is not an amended return but is a statement providing the necessary information and certifications for adjustments shown on
lines 6c through 6e. Do not file Form 941c separately from Form 944-SS. See also section 9 of Pub. 80 (Circular SS).
If you are adjusting an employee's social security wages, social security tips, or Medicare wages and tips for a prior year,
you must also file
Form W-2c, Corrected Wage and Tax Statement, and Form W-3c, Transmittal of Corrected Wage and Tax Statements.
6e. Special additions to social security and Medicare taxes.
This line is reserved for employers with special circumstances. Use this line only if the IRS has sent you a notice instructing you to
do so. You must attach Form 941c explaining the tax increase.
6f. TOTAL ADJUSTMENTS.
Combine all adjustments shown on lines 6a through 6e and enter the result on line 6f.
7. Total taxes after adjustments
Combine the amounts shown on lines 4d and 6f and enter the result on line 7.
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If line 7 is less than $2,500, you may pay the full amount with a timely filed return because you were not required to deposit.
See section 8 of Pub. 80 (Circular SS) for information and rules about federal tax deposits.
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If line 7 is $2,500 or more, you generally must deposit your tax liabilities by using the Electronic Federal Tax Payment System
(EFTPS) or deposit at an authorized financial institution with Form 8109. However, if you deposited all taxes accumulated
in the first three quarters
of the year and your fourth quarter liability is less than $2,500, you may pay taxes accumulated during the fourth quarter
with a timely filed Form
944-SS. The amount shown on line 7 must equal line 13m, Total liability for year.
10. Total deposits for this year, including overpayment applied from a prior year
Enter your deposits for this year, including any deposits that you were required to make to cover prior period liabilities
resulting from
adjustments shown on lines 6a-6e. Also include in the amount shown any overpayment from a previous period that you applied
to this return.
If line 7 is more than line 10, write the difference in line 11. Otherwise, see Overpayment below.
You do not have to pay if line 11 is less than $1. Generally, you should have a balance due only if your total taxes after
adjustments (line 7) are
less than $2,500. See If line 7 is $2,500 or more above for an exception.
If line 11 is:
-
less than $1, you do not have to pay it;
-
between $1 and $2,500, you can pay the amount owed
with your return. Make your check payable to the United
States Treasury and write your EIN, Form 944-SS,
and 2006 on the check;
-
$2,500 or more, you must deposit your tax. See Must You
Deposit Your Taxes? on page 3.
You may pay the amount shown on line 11 using EFTPS or credit card.
If you pay by EFTPS or credit card, file your return using the “without payment” address on page 4 under Where should you file?
and do not file Form 944-V(SS), Payment Voucher.
If you are required to make deposits and, instead, pay the taxes with Form 944-SS, you may be subject to a penalty.
If line 10 is more than line 7, write the amount in line 12. Never make an entry in both lines 11 and 12.
If you deposited more than the correct amount for a year, you can choose to have us either refund the overpayment or apply
it to your next return.
Check the appropriate box in line 12. If you do not check either box, we will automatically refund the overpayment. We may
apply your overpayment to
any past due tax account that is shown in our records under your EIN.
If line 12 is less than $1, we will send a refund or apply it to your next return only if you ask us in writing to do so.
You must fill out both pages of Form 944-SS and sign it on the second page. Failure to do so may delay processing of your
return.
Part 2:Tell us about your tax liability for 2006.
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If line 7 is less than $2,500, check the first box in
line 13 and go to line 15.
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If line 7 is $2,500 or more, check the second box
in line 13 and fill out your tax liability for each month
and figure the total liability for the year. If you do not fill
out your tax liability for each month, the IRS will not know
when you should have made deposits and may assess an
“averaged” failure-to-deposit penalty. See section 8
of Pub. 80 (Circular SS). If your tax liability for any month
is negative (for example, if you are adjusting an
overreported liability in a prior month), do not enter a
negative amount for the month. Instead, enter zero for
the month and subtract that negative amount from your
tax liability for the next month.
Note. Your total tax liability for the year (line 13m) must
equal your total taxes on line 7.
If you accumulate $100,000 or more in tax liability at any time during the year, you must complete Form 945-A, Annual Record
of Federal Tax
Liability, and file it with your Form 944-SS. See the $100,000 Next Day Deposit Rule in section 8 of Pub. 80 (Circular SS).
Part 3:Tell us about your business.
In Part 3, answer question 15 only if it applies to your business. If it does not apply, leave it blank and go to Part 4.
15.If your business has closed or you stopped paying wages...
If you go out of business or stop paying wages, you must file a final return. To tell IRS that a particular Form 944-SS is
your final
return, check the box on line 15 and enter the date you last paid wages in the space provided.
Part 4:May we speak with your third-party designee?
If you want to allow an employee, a paid tax preparer, or another person to discuss your Form 944-SS with the IRS, check the
“Yes” box in Part
4. Then tell us the name and the 5-digit personal identification number (PIN) of the specific person to contact—not the name
of the firm who
prepared your tax return. The designee may choose any numbers as his or her PIN.
By checking “Yes,” you authorize the IRS to talk to the person you named (your designee) about any questions we may have while we process your
return. You also authorize your designee to do all the following.
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Give us any information that is missing from your return.
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Call us for information about processing your return.
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Respond to certain IRS notices that you have shared with
your designee about math errors and return preparation.
IRS will not send notices to your designee.
You are not authorizing your designee to bind you to anything (including additional tax liability) or to otherwise represent you before
the IRS. If you want to expand your designee's authorization, see Pub. 947, Practice Before the IRS and Power of Attorney.
The authorization will automatically expire 1 year after the due date (without regard to extensions) for filing your Form 944-SS. If you
or your designee want to terminate the authorization, write to the IRS office for your locality using the “without payment” address under
Where Should You File? on page 4.
You must fill out both pages of Form 944-SS and sign it. In Part 5, sign your name and print your name and title. Then enter
the date signed and
the best daytime telephone number where IRS can reach you, including area code.
Who Must Sign the Form 944-SS?
Form 944-SS must be signed as follows.
•Sole proprietorship—
The individual who owns the
business.
•Corporation (including an LLC treated as a corporation)—
The president, vice president, or other
principal officer.
•Partnership (including an LLC treated as a partnership) or unincorporated organization—
A
responsible and duly authorized member or officer having
knowledge of its affairs.
•Single member limited liability company (LLC) treated as a disregarded entity—
The owner of the limited
liability company (LLC).
•Trust or estate—
The fiduciary.
If you have filed a valid power of attorney, your duly authorized agent may also sign your Form 944-SS.
Part 6:For paid preparers only (optional).
You may complete Part 6 if you were paid to prepare Form 944-SS and are not an employee of the business that is filing this
return.
Sign in the space provided. Give the employer the return to file with IRS and include a copy of the return for the employer's
records.
If you are a paid preparer, write your Social Security Number (SSN) or your Preparer Tax Identification Number (PTIN) in the
space provided.
Include your complete address. If you work for a firm, write the firm's name and the EIN of your firm.
Do not fill out Part 6 if you are filing the return as a reporting agent and have a valid Form 8655, Reporting Agent Authorization,
on file with
the IRS.
How to Order Forms and Publications from the IRS
Call 1-800-829-3676 (U.S. Virgin Islands only) or 215-516-2000 (toll call).
Visit the IRS website at
www.irs.gov.
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