What IRS Form 945 (2023) Is For

Form 945 is the Annual Return of Withheld Federal Income Tax used to report federal income tax that was withheld from non-payroll payments during 2023. You must file this form if you withheld or were required to withhold federal income tax from payments like pensions, retirement plan distributions, military retirement, gambling winnings, backup withholding, Indian gaming profits, or voluntary withholding on certain government payments (IRS Instructions for Form 945 (2023)).

When You'd Use Form 945 for 2023 (Late or Amended Filing)

You'll need to file Form 945 for 2023 as a late return if you missed the original January 31, 2024 deadline (or February 12, 2024 if you made all deposits on time). Common scenarios include receiving IRS notices about unfiled returns, discovering you had withholding obligations you didn't previously report, or realizing you need to correct errors on a previously filed return using Form 945-X. If you have a balance due from 2023, you may still owe penalties and interest that continue to accrue until paid. For refund situations, you generally have three years from the original due date to file and claim any overpayments (IRS Instructions for Form 945 (2023)).

Key Rules Specific to 2023

For tax year 2023, Form 945 was originally due January 31, 2024 (or February 12, 2024 with timely deposits). The failure-to-file penalty rate for 2023 returns was 5% per month (up to 25% maximum) of unpaid taxes, with a minimum penalty of $450 if the return was more than 60 days late. If you're filing late in 2025, you'll likely face both failure-to-file and failure-to-pay penalties, though the failure-to-file penalty is reduced by the failure-to-pay penalty amount for overlapping months. The 2023 tax year had no major changes to Form 945 requirements compared to prior years (IRS Failure to File Penalty).

Step-by-Step (High Level)

• Gather your records: Collect all 2023 Forms 1099-R, 1099-MISC, 1099-NEC, W-2G, and other documents showing federal income tax withholding from non-payroll payments. Request account transcripts from the IRS if needed to verify previous filings or deposits.
  
  
• Complete Form 945 (2023): Use the 2023 version of the form, not the current year's version. Report all federal income tax withholding on Line 1 and backup withholding on Line 2. Include any required schedules like Form 945-A if you were a semiweekly depositor.
  
  
• Calculate penalties and interest: The IRS will typically calculate these for you, but you can estimate them using IRS penalty calculators or consult a tax professional.
  
  
• File and pay: Mail to the appropriate IRS processing center or use an authorized e-file provider. Include payment for any balance due plus estimated penalties and interest.
  
  
• Keep copies: Retain all filed returns, supporting documents, and proof of mailing or electronic filing confirmation for your records (IRS Instructions for Form 945 (2023)).
  
  

Common Mistakes and How to Avoid Them

• Using the wrong form year: Always use the 2023 version of Form 945 for 2023 tax obligations. Current year forms won't properly process 2023 data.
  
  
• Mixing payroll and non-payroll withholding: Never report wage withholding (Form W-2 amounts) on Form 945. This belongs on Forms 941, 943, or 944 only.
  
  
• Incorrect EIN or business name: Ensure your Employer Identification Number exactly matches IRS records. Mismatched information causes processing delays and potential penalties.
  
  
• Combining multiple years on one return: File a separate Form 945 for each tax year. Never combine 2023 amounts with other years' withholding.
  
  
• Missing required schedules: Attach Form 945-A if you were a semiweekly depositor at any point during 2023, even if you're now filing late.
  
  
• Forgetting state obligations: Filing federal Form 945 doesn't automatically update state agencies. Check if you need to file amended state withholding returns separately (IRS Instructions for Form 945 (2023)).
  
  

What Happens After You File

The IRS typically takes 6-8 weeks to process paper returns and 2-3 weeks for electronic returns, though late-filed returns may take longer during peak processing periods. You'll receive notices confirming receipt and any balance due calculations including penalties and interest. If you owe money, you'll get a bill with payment options including online payments, phone payments, or installment agreements using Form 9465 or the Online Payment Agreement tool if you owe $25,000 or less. For processing disputes or questions, you can call the Business and Specialty Tax Line at 800-829-4933. If you disagree with penalties or interest charges, you have appeal rights and can request penalty abatement for reasonable cause using Form 843 (IRS Instructions for Form 945 (2023), IRS Online Payment Agreement).

FAQs

Can I still get a refund if I'm filing my 2023 Form 945 late?

Yes, but you must file within three years of the original due date (by January 31, 2027 for 2023). However, there's no failure-to-file penalty if you're owed a refund (IRS Instructions for Form 945-X).

How much are the penalties for filing 2023 Form 945 late?

The failure-to-file penalty is 5% per month of unpaid taxes (maximum 25%), plus a failure-to-pay penalty of 0.5% per month. The minimum penalty is $450 if more than 60 days late. Interest continues to accrue on both taxes and penalties (IRS Failure to File Penalty).

Should I also amend my state returns?

Probably, but this depends on your state's requirements. Most states require separate filings and don't automatically update based on federal changes. Check with your state tax agency or consult a tax professional for guidance.

Can I get copies of my tax account transcripts to help prepare this return?

Yes, request Account Transcripts for 2023 online at IRS.gov, by calling 800-908-9946, or using Form 4506-T. These show payments made, previous filings, and IRS actions on your account.

What if I discover I need to correct my 2023 Form 945 after filing it late?

Use Form 945-X (Adjusted Annual Return) to correct administrative errors, but you must file it within three years of when the original Form 945 was filed. Don't file Form 945-X with your original late return (IRS About Form 945-X).

Can I set up a payment plan if I can't pay the full amount owed?

Yes, you can apply online for an installment agreement if you owe $25,000 or less and can pay within 24 months. Use the Online Payment Agreement tool at IRS.gov/OPA or file Form 9465 for larger amounts (IRS Payment Plans).

Do I need to file Form 945 if I had no withholding activity in 2023?

No, you only file Form 945 for years when you actually withheld or were required to withhold federal income tax from non-payroll payments. If you had no such activity in 2023, no filing is required (IRS Instructions for Form 945 (2023)).

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