Mortgage Modifications Foreclosure Prevention

Tax Form 940 Instructions

What is a Federal Unemployment Insurance Tax Form?

Employers must withhold federal income tax from their employees’ wages. You also withhold part of Social Security and Medicare taxes from their wages and you pay a matching amount to yourself.

Federal Unemployment Tax

The Federal Unemployment Tax Act (FUTA) is separate from federal income tax, Social Security and Medicare taxes. Employers report this tax by filing an annual  tax Form 940 with the Internal Revenue Service. Sometimes the employer is required to make quarterly payments during the tax year.

Calculating Tax Amount

FUTA puts a 6.2% tax on the employer for the first $7,000 of gross earnings of each worker per year. Once the $7,000 amount is reached then, the employer no longer pays any Federal unemployment tax for that year concerning that particular worker. There are some credits that are allowed with respect to state unemployment taxes paid that may reduce the effective rate to 0.8%.

Employers Must Pay If:

• You employed one or more individuals who worked at least 20 calendar weeks (doesn’t have to be consecutive) during the current or preceding tax year or
• Paid at least $1,500 in employee wages during any quarter.

Employer Pays

Only the employer pays the federal unemployment tax. This tax is not paid by the employee or taken out of the employees’ pay. For more information, refer to the instructions for tax FORM 940. This is a PDF (portable document file).

Tax Form 940

You will want to consult Tax Form 940 for certain employment situations like:

• Household Employees
• Agricultural Farm Workers
• Services Rendered to Indian Tribal Government
• Tax-Exempt Organizations
• State and Local Government Employees

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I was watching a financial news program last night when I heard an interesting observation from a business professor:

“There has never been a better time to reduce your debts”

Now when you think about this in a bit more detail you realise that this rather educated person is in fact most probably incorrect. How can it be the best time?

The real facts are eveident for each and everyone to see; the rate of unemployment is rising quickly, pay rises are thing of the past and money is scarce. For this reason I can not understand as to how he feels that this is the best time to reduce our debts; the reality is that this is a time when the majority of people have a real lack of money!

At this stage I would like to make it clear that I am not involved in debt management and that what I write in this article is purely an opinion of the current financial situation that we find ourselves in. Please therefore do not take the information as “financial advice”. I am merely an average man from England who is involved in various industries including offering one way links, I run an SEO company and I also provide an SEO copywriting service.

In another way I can actually see where he is coming from; unlike in past years when people could seemingly borrow as much money as they wanted to, the times have now changed and credit is much harder to come by. The companies that we owe money to are also deep in the mire. This may well be a great time to contact the company to arrange an affordable repayment plan.

What kind of deal are you talking about? Well quite simply these companies are also in need of cash and many people are not keeping up their debt repayments. By contacting the company, in writing, and stating that you are eager to pay off the debt but that the interest rates are crippling you in these problematic financial times. Offer them an amount that you could afford to pay on a weekly or a monthly basis and ask them to confirm if this is suitable to them. There are certain ways to write these types of letter and it may well be prudent to ask a debt specialist to contact these companies on your behalf.

I guess that this business professor may well have been correct after all. What do you think?