What's the difference between filing Form 941 vs Form 944 for a single employee?

Wait, I'm confused about the FUTA thing. I thought ALL employers had to file Form 940 regardless of the amount? Also, what about state unemployment tax forms? Do those have similar thresholds or are they different?

The FUTA requirement is specifically triggered when you either pay $1,500+ in wages in any calendar quarter OR have an employee work for at least part of a day in 20 different weeks. If you don't meet either threshold, you generally don't need to file Form 940. State unemployment tax requirements vary by state. Many states follow the federal FUTA thresholds, but some have lower thresholds or different requirements altogether. I'd recommend checking with your specific state's department of revenue or employment agency to confirm their requirements for your situation.

That sounds helpful but does it handle state forms too? I'm in California and they have their own weird employment forms that are different from the federal ones.

I'm kinda skeptical about these tax apps. How does it know the IRS rules for forms 941 and 944? Does it actually tell you how to fill out the forms or just which ones you need? And is it updated for 2025 tax changes?

Yes, it handles both federal and state forms, including California's specific employment forms. I'm actually in Oregon, but it showed me all the state-specific requirements too. It's pretty comprehensive. As for the IRS rules, it seems to have all the current regulations built in. It not only tells you which forms you need but also gives guidance on how to complete them correctly. And yes, it's definitely updated for 2025 - they actually sent an email about all the tax changes they incorporated for this year.

How does that even work? I don't understand how a service can wait on hold for you... does it actually contact the IRS or is it just some kind of scam?

Yeah right. The IRS NEVER answers their phones. I've been calling for months about my refund issue. No way this actually works or gets you through any faster than just calling yourself.

It's actually quite simple. They use an automated system that dials and waits on hold with the IRS, then when a real person answers, their system detects a human voice and immediately calls you to connect with the agent. They're basically just handling the hold time for you. They absolutely contact the real IRS. It's the same number you'd call yourself, but their system can just sit on hold indefinitely while you go about your day instead of you having to listen to the hold music for hours. When I used it, I got a call back in about 47 minutes when an agent was actually on the line.

Wait, so if I pay someone to watch my kids occasionally, I don't need to worry about 941 or 944 forms? How much do they need to be paid before Schedule H is required? This tax stuff is so confusing!

If you're paying someone to watch your kids in your home, they might be considered a household employee rather than a business employee. You don't need to file Form 941 or 944 for household employees - instead, you'd use Schedule H with your personal tax return. For Schedule H, the threshold is $2,600 (for 2025) paid to any one household employee. If you paid less than that for occasional babysitting, you might not have any filing requirements at all. But if you paid $2,600+ to one person during the year, you'd need to file Schedule H and handle payroll taxes.

Oh wow I didn't even consider that! It was basically just my neighbor's kid who helped me organize some inventory for my online shop for a couple days. I don't control when or how they do the work, just paid them when it was done. Does that sound more like a contractor situation?

That definitely sounds more like a contractor situation! If you didn't control how or when they did the work, just paid them for the completed task, that's a classic independent contractor arrangement. For contractors, you'd issue a 1099-NEC (if you paid them $600 or more) instead of dealing with payroll taxes and Forms 941/944. Since you only paid $270, you likely don't have any filing requirements at all - no 1099, no 941, no 944, no 940. Just keep records of the payment for your business expenses. The IRS has a worker classification test (Form SS-8) if you want to be 100% sure, but your situation sounds pretty clear-cut contractor to me.

@Miguel Harvey That s'such an important distinction! Based on what you described - your neighbor s'kid helping organize inventory as a one-time gig without you controlling how/when they worked - that really does sound like independent contractor work rather than employee work. Since you only paid $270 and the 1099-NEC threshold is $600, you re'probably off the hook for any federal tax filing requirements related to this payment. You d'just keep it as a business expense record on your end. Way simpler than dealing with all the payroll tax forms! If you want to be absolutely certain about the worker classification, you could always file Form SS-8 with the IRS to get an official determination, but honestly your situation seems pretty straightforward contractor territory to me.

This is really helpful context! I'm new to this community but have been dealing with similar small business employment questions. The contractor vs employee distinction is so important and often overlooked. @Miguel Harvey - Based on your description of paying your neighbor s'kid to help organize inventory as a one-time thing, that definitely sounds like contractor work to me too. The key factors that point to contractor status are: it was a one-time gig, you likely didn t'provide specific training or tools, and you probably just paid them when the task was completed rather than controlling their daily work schedule. Since you re'under the $600 threshold for 1099-NEC filing, you re'probably in the clear for any federal tax forms related to this payment. Just keep good records of the $270 as a business expense. Way simpler than all the payroll tax complications everyone was discussing! If you do hire people regularly in the future though, definitely worth understanding the employee vs contractor rules upfront to avoid confusion.