941 quarterly tax return doesn't match reports.

[F12Mahon]

Like the subject, my quarterly tax return doesn't match the reports. My reports say $295.08 and the return says 295.02.

Why the discrepancy?

I'm confused!

[F12Mahon]

Just re-read the return and balance due under totals says 295.02 but the tax liability says 295.08.

Not only am I confused, I am befuddled!

Can someone explain? This is the first time I have done the quarterly return with more than just the Pastor's income to report.

[F12Mahon]

The number that is off is Medicare tax. Manually calculating the tax I come up with 2.61 tax for the quarter. My reports say 2.64. When you multiply by 2 to get employer and employee total, that accounts for the 6 cents discrepancy.

Medicare tax table is 1.45%.

I'm digging as I write this.

As each check is created each share of Medicare should be $.435. Twice per month for three months totals 2.61.The tax is rounded up for each check to $.44. Twice per month for three months totals 2.64.

I conclude it's a rounding issue and the 941 assistant pulls the "correct" numbers instead of the numbers from the check amounts.

What does anyone else think?

[NeilZ]

Do you have 'round tax to the nearest whole dollar' checked on the Medicate tax table?

[F12Mahon]

Do you have 'round tax to the nearest whole dollar' checked on the Medicate tax table?

I do not.

Upon further review, the 941 assistant actually calculates the medicare tax on the total income for the quarter. This is done in line 5c on form 941. Line 7 then asks for adjustments for fractions of cents. I put the 6 cents difference there and called it good.