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Video instructions and help with filling out and completing Are 940 Schedule R Form

Instructions and Help about Are 940 Schedule R Form

In this presentation we will take a look at form 940 which is the employers annual federal unemployment or futa tax return for more accounting information and accounting courses visit our website at accounting instruction dot info here's an example of the form this comes from the IRS website which you can find at irs.gov e we got the 1040 currently for 2022 it has the same information up top that we see in the 941 which will include the ein number or the employer identification number name trade and address note over here however even though we have a similar looking box it's not the same as we see on the 940 ones because this is a yearly return rather than a quarterly return so this box includes stuff if we had to amend the returned or some other special circumstances like it's an it's like the last return or something like that then we would select the appropriate items here but this isn't a quarterly return that's the thing we really want to remember here they sound very similar of course one because of the numbers and two because it's a payroll tax form but the 941 is actually the quarterly returns the 940 is the yearly return so it also seems kind of funny that the 940 the thing we do at the end of the year has a number that's before the 940 ones that we do on a quarterly basis note that they're not related in in many different ways the 940 at the end of the year in other words it would be makes sense for us to think that the IRS would want us to make a 940 return 941 return quarterly for four quarters and then rhe sum up that data again in the yearly return in this form the 941 that's not what it's happening however there are actually two different types of taxes that we are dealing with for the 940 one s and a nine forty s in other words really what's happening for the 940 once is it's reporting our main taxes meaning it's reporting fi t federal income tax Social Security for the employee and employee side and Medicare for the employer and employee side so my guess is the reason that we need to record that on a quarterly basis rather than on a yearly basis is because of its significance we're recording the main taxes there the 940 on the other hand which we only have to report at the end of the year is only reporting the futa tax federal unemployment tax which is a much smaller tax so really what's happening here is the IRS is saying hey we're going to give you some pity here and not make you report this on a quarterly basis but instead just on a yearly basis but we do want to see that quarterly taxes for the the FI T Social Security and Medicare so in other words this one winds up closer to what we think of and know of with our personal taxes like the 1040 that we have to file at the end of the year that in is also an information return that we would basically say hey this is how much we owe at the end of the year we should have already paid it and we file that one time that's similar to the 940 here that we do for the federal unemployment tax if we go down to the calculations then we got our register data up here that's going to be our data from outward register we will use then to fill out this form 940 we're here in part one so the first one says if you had to pay state unemployment tax in one state only we're gonna pick the Nevada just to pick a state here note here that you might think well why do I need a state because it's a federal tax aren't all states equal when considering federal taxes but note that the futa tax is the law got kind of mixed up with the state taxes meaning the food attacks is lower if you paid suit attacks in other words the state would have to have a suit to tax law to pay the suta to get the lower rate for futa which most states did and therefore in essence will have a lower rate of futa so when you think of food - we really are applying a lower rate pretty low rate but it's only applicable if we're paying suit - taxes generally and that would only be applicable if this had a suit attacks which because of that requirement most states do so we're just gonna pick a state here that's why we need a state and the B says if you had to pay state unemployment tax in more than one state then we'd have to make sure that again we kind of paid the suit to tax to calculate the futa at the lower rate and then to says if you paid wages in state that is subject to credit reduction so we're not going to deal with that here either so then we have the total payments to all employees this is going to come from our earnings record so we have the 241 206 from the earnings record it's not going to differ then in other words we may have different types of earnings wages if we're talking about fi T earnings or if we're talking about oasdi earnings it could differ we're just going to take the total earnings typically here for the futa earnings next thing says payments exempt from futa tax in our example we don't have any exempt payments from futa tax line 5 says total of payments made to each employee in excess of 7,000 this number can be confusing because it's often not the number that we.

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