940

[DTS]

Forgive my ignorance on this subject. I'm new to payroll issues and trying to learn by the seat of my pants.

New client, very small payroll. I filed the 941 and all the State forms. However, I'm very confused about the FUTA filing. Am I suppose to file only the 8109 each month and file one 940 at year-end with these monthly totals on it?

Any tips and clarification you can lend will be really appreciated!

Thank you,
Dennis

[outwest]

Deposits

Form 940 Deposits are due each Quarter unless the annual total liability is less than $500.

The form 940 is an annual form filed by January 31.

If the annual total liability is less than $500, then the tax can be paid with the annual filing and no quarterly deposits are due.

Doug

[sea-tax]

Filing Requirements- For employers who paid a total of 1500$ or more in wages in any calendar quarter

Deposit rules:

Employers are required to deposit taxes any time the FUTA liability exceeds 500 $ in a calender quarter. If the FUTa tax is 500 or less it can either be deposited or added to next quarter. ( IRC 6157;Reg.31.6302(c)-3 )

If by 4th quarter the tax is over 500$ deposit is due by 1/31 if under 500$ payment can either be deposited or paid with form 940

If you have it the "other book" "small business" has a pretty good explanation on pages I-4 and I-5
These are just a brief overview I would look at the instructions and or code for more detailed explanation. Godd luck

PS:Sorry last year I was not aware of the tax book when I ordered, this will change this year.

[DTS]

Looks OK

Doug and sea-tax,

For the three months my client has been opened, she has only booked $64 in FUTA, so it appears she may be able to pay it all at year's-end on the 940. I'll keep an eye on it.

Thanks,
Dennis

PS sea-tax. Have you ordered the TaxBook for '06 yet? Do.

[Donanita]

940 Limit

Remember the tax is on the first $7000 and if all SUTA has been paid the tax is based on.008 of the $7000.

[Bird Legs]

Tax based on first $7,000.

Of each employee, not total payroll.

[Donanita]

Yes

I meant for each employee