IRS Tax Form 940 Instructions for 2012, 2013

The IRS Tax form 940 is filed every January and is used to report the annual Federal Unemployment Tax Act (FUTA) tax.Image

Only employers are required to pay the FUTA tax and it supplies the funds needed to pay unemployment compensation to workers without jobs along with other state tax unemployment needs. FUTA requires employers to pay unemployment taxes on each employee for the first $7,000 of wages after deducting all exempt payments.

The 940 tax form should be filed by employers who have either paid wages of $1500 or more to employees in any quarter of a calendar year or who have had one or more employees for at least some part of a day in any 20 or more different weeks in a calendar year.

Employers who do not meet these guidelines are not eligible to file the tax form and are required to tick box ‘c’ on the upper right corner of the form. Business owners that have closed down their businesses or have stopped paying wages should tick box ‘d’ on the upper right hand corner of the form while employers filing to amend a return that was previously filed in the same year, should tick the amend return box ‘a’ on the upper right hand corner.

When filling out the IRS TAX Form 940, the following guidelines should be strictly adhered to:

• Every page of the form and attachments must contain your business name and Employer Identification Number (EIN)

• Use the 12-point Courier font, when filling out the form on a computer

• Dollars should be entered to the left of the pre-printed decimal form and cents to the right

• Avoid entering dollar signs or decimal points

• Employers that choose to round of their amounts to the nearest dollar must make sure it is done on all entries made.

• Leave every line with a zero value blank.

To avoid being penalized the IRS tax form should be filed on time and correctly and taxes should be paid as when due. The IRS Tax Form 940 can be downloaded here