2015-2025 Form

What is the 940 Form

The 940 Form, officially known as the Employer's Annual Federal Unemployment (FUTA) Tax Return, is a tax form used by employers in the United States to report and pay unemployment taxes to the federal government. This form is essential for businesses that are subject to the Federal Unemployment Tax Act (FUTA), which provides funds for unemployment benefits. The 940 Form must be filed annually, detailing the amount of unemployment tax owed based on employee wages.

How to use the 940 Form

Using the 940 Form involves several steps to ensure accurate reporting of unemployment taxes. Employers must first determine their FUTA tax liability based on total wages paid to employees. The form requires information such as the employer's identification number, total taxable wages, and the amount of tax due. Once completed, the form can be submitted electronically or via mail to the IRS. It is crucial to maintain accurate records of employee wages and tax payments for compliance and future reference.

Steps to complete the 940 Form

Completing the 940 Form requires careful attention to detail. Here are the key steps:

• Gather necessary information, including your Employer Identification Number (EIN) and total taxable wages for the year.
• Calculate the FUTA tax based on the applicable rate, which is typically six percent of the first $7,000 of each employee's wages.
• Fill out the form, ensuring all sections are completed accurately, including any adjustments for state unemployment taxes.
• Review the form for errors before submission to avoid penalties.
• Submit the completed form to the IRS by the deadline, which is usually January 31 of the following year.

Legal use of the 940 Form

The legal use of the 940 Form is governed by federal tax laws. Employers must file this form to comply with the Federal Unemployment Tax Act, which mandates that businesses contribute to the unemployment insurance system. Failure to file the form or pay the required taxes can result in penalties and interest charges. It is essential for employers to understand their obligations under the law to avoid legal repercussions.

Filing Deadlines / Important Dates

Employers must be aware of specific deadlines related to the 940 Form to ensure compliance. The form is typically due by January 31 of the year following the tax year being reported. If January 31 falls on a weekend or holiday, the deadline is extended to the next business day. Additionally, employers should keep track of any state-specific deadlines that may apply to their unemployment tax filings.

Form Submission Methods

The 940 Form can be submitted to the IRS through various methods. Employers have the option to file electronically using the IRS e-file system, which is often quicker and allows for immediate confirmation of receipt. Alternatively, the form can be printed and mailed to the appropriate IRS address. It is important to choose a submission method that aligns with your record-keeping and compliance needs.