It’s our goal here at TaxBandits to provide you with every tool and tax form you need to make filing your employment taxes a fast and easy process online. That’s why over time we will be adding more and more innovative e-filing features and tax forms, like the FUTA Tax Form 940 (Schedule A).
Just like with your Form W-2, Form 1099-MISC, and Form 941, your 940 FUTA tax Form is due by January 31. This may seem like a lot, but we actually make it incredibly easy to file all of your taxes by the due date and we will even help by going over the FUTA tax today.
Introducing FUTA Tax Return Form 940
Form 940 is the Employer’s Annual Unemployment (FUTA) Tax Return. It’s used to provide unemployment funds for employees who have lost their jobs. This provides financial assistance while they search for a new job.
The FUTA tax funds come from the taxes that employers pay on each of their employee’s paychecks. However, it doesn’t come from the employee’s pay, it only comes out of the employer’s funds.
An employer has to pay the FUTA tax if they paid wages of $1,500 or more to any employee during the standard calendar tax year. You’re required to file if you had any employees work anytime during 20 or more weeks. The weeks do not have to be consecutive and include part-time, temporary, and full-time employees.
The standard IFTA rate is 6% on the first $7,000 paid to the employees. But if you live in a credit state, you can receive a tax credit up to 5.4%, meaning you would only pay 0.6% of the $7,000 paid to the employee.
Also, if you find yourself in a pickle and can’t afford your FUTA obligations, you can borrow federal funds. However, in these states, you will receive a reduced FUTA credit. There are also FUTA reduction states that face higher FUTA tax rates until you can fully repay your federal FUTA loan.
If you do not file Form 940 by the deadline you will have FUTA penalties to face. For example, if you miss the deadline you will owe 5% of the total tax due. Then this amount will accrue on a monthly basis until you pay the amount in full.
Also, for making a late payment or not fully paying the amount you owe you will be charged 2 to 15% of the unpaid tax, depending on how late your payment is.
Filing With TaxBandits
When you file by TaxBandits, you don’t have to worry because we make it easy to complete your form with more than enough time to spare by the deadline. All you have to do is create your free account and follow our step-by-step filing guide to complete Form 940 in a matter of minutes and transmit it directly to the IRS.
Plus, our innovative e-filing features save you time and hassle. For example, you can use the bulk upload feature to import all your financial information at once, instead of entering it one by one.
Our internal audit check will catch any basic errors before it’s transmitted to the IRS. This will reduce the chances of your form getting rejected. Also, with our multi-user access feature, you can give trusted employees access to your account to assist with filing your taxes. Plus, the activity log will track every move they make.
If you need any assistance with your Form 940 FUTA tax simply contact the live, US-based TaxBandits support team. Were available Monday – Friday from 9 AM to 6 PM EST at 704.684.4571. We also offer live chat and 24/7 email support at support@TaxBandits.com.