Question

Q: What is a personal allowance? What was the amount of personal allowance for 2014?

A: Personal allowance is the types of withholding allowances that may be claimed by employees for income tax withholding and the purpose and use of form W-4. $3,950 in 2014 and one deduction for spouse as long as he/she are not claimed as a dependent on someone elses taxes. Can't be claimed on other jobs or spouses job.

Q: What is form 944?

A: Replaces Form 941 for employers who owe $1,000 or less in employment taxes for the year

Here is the question that need answer

Would this form be used mostly for larger or smaller businesses? and please explained why.

Answer 1

Form 941:

Employees are required to file Form 941 Quarterly. These are designed for larger employees. These are used for-

1. Report income taxes, social security tax, or Medicare tax withheld from employee's pay checks.
2. Pay the employer's portion of social security or Medicare tax.

Form 944:

This form is designed so the smallest employers (those whose annual liability for social security, Medicare, and withheld federal income taxes is $1,000 or less) will file and pay these taxes only once a year instead of every quarter.

Hence these forms are not decided based on business, but based on employees Income. If employee income is less than specified amount i.e $ 1000 they may submit for 944, and when the annual liability of social security, Medicare and withheld federal Income is more than $ 1000 employee have to submit for 941.