TAX FILE: Filing relief for small employers

Some very small employers, such as owner-operators and others who occasionally employ assistants for unloading, driving, or paperwork can now reduce their federal employment tax filing to once a year instead of quarterly. On January 3, the IRS announced that employers with estimated annual employment tax liability of $1,000 or less — approximately $4,000 or less in annual wages — can file new Form 944 at yearend in place of the quarterly Form 941.

The IRS said it would begin mailing notification letters between February 1 and February 15 to employers who are eligible for calendar year 2006. Employers who do not receive a letter and believe they are eligible to file the new Form 944 can call the IRS at 1-800-829-0115 to find out if they qualify. Taxpayers should contact the IRS by April 1, 2006. New employers who expect to owe $1,000 or less in total annual employment tax also are eligible to file Form 944.