Video instructions and help with filling out and completing When 940 Schedule Return

Instructions and Help about When 940 Schedule Return

In this presentation we will fill out the form at 9:40 employers annual federal unemployment futa tax for more accounting information and accounting courses visit our website at accounting instruction dot info a few things we want to cover before getting into the numbers for the 941 one is just to keep it separate formed from the form 940 the numbers being so closely related chemicals think that they are related in the number 940 being before 941 numerically can make us think that possibly the 940 is the quarterly form and the 940 ones are the yearly form of the annual form and it's that's not the case the 940 form is the annual summary form the 940 ones are gonna be the quarterly form the other common thing that this could lead us to believe would be that the 940 is recapping the information for the 940 ones and this isn't the case either this is wrong but it would make logical sense for us to thank well the 940 forms are gonna give us the data is on a quarterly basis for payroll tax owed to the government and then the 940 at the end of the year so that 940 ones gave us quarterly at the 940 at the end of the year is gonna Reese um er eyes that again as of year-end and that's not the case here what is the case is that the 940 ones have different federal payroll taxes than the form 940 meaning the 940 one covers the big payroll taxes of Social Security Medicare and federal income tax whereas the 940 the end of the year tax return or the entire year return only covers futa federal unemployment tax which is relatively small so the way you want to think about this why would that happen why do they do that the 940 actually the way we're doing futa kind of lines up closer to how we might think of our are forms for our taxes our 1040s meaning we typically have our 1040s our employers take the money out of our wages in other words we make the payments throughout the year and then we report what has happened at the end of the year one time on art our form 1040 and we tell the IRS hey here's what we earned here's our calculation of our taxes and here's what we already paid and in a perfect world they would be the same and we wouldn't get a refund or any taxes obviously it's not a perfect world and that's too complicated to happen on a form 1040 but that's the idea the same thing is going to be true with the 940 which matches that same kind of scenario we're gonna say we're gonna make the payments throughout the year just like we do with our income taxes we will report it one time at the end of the year and hopefully our payments that we have made match our liability calculation which they should likely will on the form 940 unlike our individual income tax reforms with the 1040 why don't we do that with the 940 ones why does it differ the 940 ones are a lot bigger of the number so I can the IRS is more concerned with the 940 ones and want actual more reporting they want not just a year in form they want it quarterly form so they want payments during the year and they want to verify that those payments are lining up and being done correctly on a quarterly basis rather than an annual basis so in other words they're given us a little bit more leeway on futa and a little less reporting requirements because probably the reason and again if you're looking for justification or good reasons within the tax code you might be looking a while but theoretically I would think the reason would be that the amount is smaller and therefore they're willing to allow us to just have to did annual reporting so now that we have that we're calculating the food oh it's gonna be the smaller tax for and we only need the one form for the end of the year we got the same AI n number that we will be reporting the employer identification number name and then the business and the trade over here we don't have the quarters of course because we're not talking about quarters if it's a mint if these apply we would check them like an amended return or no payments to employees or the final if it's the final return because the business isn't gonna have and payroll or going out of business or whatever then we would have that we're gonna go down to part one first if you have had if you had to pay state unemployment tax in one state only enter the state here we're gonna give the state of Nevada and and one reason is because they typically have less taxes oftentimes what may be more simply cated but any state would typically be similar you might be asking why do we need to know what state it is if it's a federal tax form what does it matter doesn't the Fed treat all states the same and the reason is because remember that the federal tax here is tied to the state tax in some way meaning the way the federal law was written is that it said you know we're gonna have an exemption you're gonna you can pay less taxes if there's a state tax which basically mandated the states to have some minimum type of Ceuta so for that reason there's kind of a link here between futa and suta and we need to know did you pay suta tax so that we know what rate we need to apply for futa so the state tax for the federal tax so then.