The IRS uses two different sets of deposit rules to determine when businesses must deposit their Social Security, Medicare, and Federal tax withheld. Your deposit schedule is not determined by how often you pay your employees, but rather on the total tax liability you reported on the total of your Forms 941 filed between July 1 two years ago through June 30 of last year. Clear as mud? Page 25 of this Publication 15 might help.
You are required to determine your deposit schedule at the beginning of each calendar year.
Monthly Schedule Depositor. If you reported $50,000 or less in taxes during the lookback period, or if this is your first year in business, you are a monthly schedule depositor. This means your taxes for this month are generally due by the 15th of next month. If this is your first year in business and you accumulate a $100,000 liability at any time during the year, you immediately become a semi-weekly schedule depositor for the remainder of this year and for next year.
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Semi-weekly Schedule Depositor. If you reported more than $50,000 in taxes during the lookback period, you are a semi-weekly schedule depositor. This means your tax liabilities for wages paid Wednesday through Friday generally are due the following Wednesday.
Next-Day Deposit Rule. If you accumulate $100,000 or more in taxes on any day during a month, you must deposit the tax by the next business day, whether you are a monthly or semiweekly schedule depositor.
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See the Instructions to Form 941 for more information. Another excellent resource is the Tax Tips Calendar for Small Business.
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How to Deposit Your Taxes
The IRS now requires that you pay all deposits electronically. See the IRS Electronic Payment Options Home Page.
To sign up to use EFTPS, or Electronic Federal Tax Payment System, go to EFTPS.gov and click "Enroll." If you have used a 8109 coupon in the past two years or if your business is less than a year old, you are pre-enrolled in EFTPS. You should have been mailed a four-digit Personal Identification Number (PIN) from the Department of the Treasury.
HOW TO ACTIVATE YOUR EFTPS ENROLLMENT
