Seasonal Businesses

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KIM: Hello. My name is Kim from the IRS. If your business is dependent on income during peak periods of the year, you may have a seasonal business. If so, we have some rules and advice to help guide you through the unique tax issues that you face. Seasonal businesses often hire temporary help for such diverse ventures as fireworks stands, Christmas-tree lots, haunted houses and pumpkin patches, or for sporting events, holidays, commercial fishing, and harvest seasons. Questions often come up about the tax treatment of payments for casual labor, temporary help, and seasonal help. The main rule is seasonal employees are subject to the same tax withholding rules that apply to all other employees. As an employer, you normally have to file a quarterly Form 941 to report your employees´ wages and withholding. However, seasonal employers do not have to file a Form 941 for quarters where you haven´t paid wages and don´t have a tax liability. To tell the IRS that you will not file a return for one or more quarters during the year, check the box on Form 941 "seasonal employer" for every quarter you file Form 941. All employers must keep good records to file accurate returns. It´s a good idea to keep all receipts, payment information, and tax information in one location to make your filing taxes easier when the time comes. For more information on seasonal employment, visit our website at IRS.gov and type the words "Seasonal Help" in the search box. You can also refer to IRS Publication 15, Circular E, Employer´s Tax Guide to learn more about your tax responsibilities as an employer. And if you hire farm workers, follow the rules in Publication 51, Circular A, Agricultural Employer´s Tax Guide. For more on your record-keeping requirements, you can visit us on IRS.gov and type the words "Employment Tax Recordkeeping" in the search box. You can also download our helpful Publication 583, titled "Starting a Business and Keeping Records" at our website.