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IRS Tries to Make Form 944 More Flexible

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December 15, 2009

The Internal Revenue Service is making changes next year in the Employer’s Annual Tax Return form.

Form 944 was designed to reduce the burden on small employers by letting them file one employment tax return for the year instead of filing four quarterly Form 941 returns, as Wanda Valentine, a senior analyst with the IRS’s Office of Federal, State and Local Governments, wrote in the latest edition of the IRS FSLG Newsletter. However, these employers have to be really small in order to be eligible to file Form 944, with an estimated employment tax liability of $1,000 or less for the entire calendar year.

The IRS recently released a revenue procedure to create greater flexibility for these employers beginning in 2010. But things will be changing rapidly. Beginning in tax year 2010, no employer will be required to file Form 944 and new procedures will be in place.

“Beginning in 2010, eligible employers who qualify can elect to file Form 944 or continue to file Form 941,” wrote Valentine. “Eligible employers who wish to file Form 944 must make the request by calling the IRS on or before April 1 of the current tax year (April 1, 2010 for returns for tax year 2010).”

It certainly takes some effort to keep up with the IRS and its guidance, but at least it’s all up there on the Web, as long as you know where to look.

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