How to File a Business 940 Form

Internal Revenue Service (IRS) business form 940 is used to report unemployment taxes called FUTA, for Federal Unemployment Tax Act. This tax is based on the initial $7000 that employers pay as wages to each of their employees. Business owners must file a Form 940 annually, either on paper or electronically.

Difficulty: Easy

Instructions

Things You'll Need:

• Forms 940, 9040V and instructions
• EIN
• Payroll information
• Calculator

File Your Form 940 on Paper

1. Get copies of Form 940, payment vouchers 940V and the complete instruction booklet for these forms. You may find copies of these and other business forms at your local post office or library. You can also download tax forms from the IRS website (see Resources below).

2. Put your Employer Identification Number (EIN) on each page of correspondence that you file with the 940. Be sure that you have entered the number correctly to avoid a delay in processing your FUTA taxes.

3. Use the accepted formats for dollar amounts as you enter payroll and tax information on your form. Decimal points are pre-printed on Form 940 so you do not need to enter them and the IRS asks employers to avoid using a "$" (dollar sign) in their figuring. You have the option of rounding up to the nearest whole dollar if you wish.

4. Follow the instructions carefully and use the worksheets provided to determine your business's FUTA tax liability for each quarter. Use a calculator to avoid making costly mistakes.

5. File all forms and payments related to Form 940 on time. The due date for the 940 is January 31 of the current year. If you owe more than $500 in taxes quarterly, you must use payment vouchers 940V to send them in by April 30 (for the first quarter), July 31 (second quarter), October 31 (third quarter) or January 31 (fourth quarter).

6. File your forms with the IRS office that handles payments and reports for your state. The list of states and IRS addresses is located in the instruction booklet for Form 940.

File Your Form 940 Electronically

7. Complete the IRS e-file Application Package in order to become eligible to file Form 940 online. Information about the IRS e-file program is available on their website (see Resources below).

8. Mark the due date for being able to file Form 940 online. You must have finished the registration process and received your PIN number before October 15 to be able to report your FUTA taxes electronically for the following year. If you miss the deadline, continue to file paper forms for your taxes.

9. Keep your PIN number in a safe place and avoid sharing it with anyone. This is a unique identifier that is the equivalent of an authorized signature for e-forms.

Tips & Warnings

• Salaries paid to certain groups and organizations are not subject to FUTA tax, so employers do not need to file Form 940. This includes religious, educational, scientific and charitable organizations. Wages paid to government employees at the state and local level are also excused from filing a 940 form.

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Resources

• Get business tax forms at IRS.gov
• IRS e-file program information