All employers in the U.S are required to pay federal unemployment taxes if:

· Their quarterly wage bill exceeds $1,500

· They have one or more employees working for them for at least some part of the day for 20 or more weeks in a year

The payments made in federal unemployment taxes are then used by the federal government to provide unemployment benefits to employees who may lose their job through no fault of their own.

Of course, employers must also report these tax payments (and the amount owed on actual tax payments) to the government. To do that, they need to file IRS Form 940.

The Basics of IRS Form 940

IRS Form 940 is the federal unemployment tax annual report form that is submitted to the IRS at the start of each year to report on the unemployment tax payments made (and due) for the previous year.

So, for example, if you’re reporting federal unemployment tax payments for the 2019 tax year, you’ll need to submit Form 940 to the IRS by January 31, 2020.

Note: The IRS gives a 10-day leeway to business owners for submitting Form 940, if they’ve paid their due relevant taxes in fullfor the tax year.

Let’s look into some more details of this form.

Filing IRS Form 940

Form 940 can either be filed online or mailed on the mailing address specified by the IRS for your respective state.

You can also choose to work with a business tax service company that will help you complete and file the formin a convenient way.

Due Dates for Payments for IRS Form 940

Federal unemployment tax payments are typically made on a quarterly basis and are due by the last day of the month acceding the quarter period. Alternatively, you must pay federal unemployment taxes four times a year:

· By April 30

· By July 31

· By October 31

· By January 31

However, if the federal unemployment tax in any quarter is $500 or less, you can carry the payment into the next quarter period. When your cumulative payments exceed $500, you can make a deposit on the due date specified for that existing quarter period.

It’s worth mentioning here that Form 940 payments can only be made online by using the Electronic Federal Tax Payment System.

Do you have any other questions about IRS Form 940 that you’d like to ask? Feel free to reach out; A&B Accounting and Business Solutions will be happy to help you.