FUTA is an acronym for Federal Unemployment Tax; an employer payroll tax calculated on the first $7,000 of gross wages paid to each employee. Form 940 is used to report FUTA to the IRS on an annual basis.
Federal and state compliance requires the filing of several different reports by certain deadlines. In this lesson I explain the various reports, filing deadlines and best practices to comply with the law. I’ll explain the quarterly set of reports first then the respective annual requirements.
The key to success with payroll accounting is properly documenting all aspects of payroll thus complying with the various legal requirements.
Similar to the bookkeeping cycles, payroll cycles have many frequent activities, fewer incremental requirements and one important end of the year report. This lesson explains these respective cycles and how they tie together for the final year-end report. Other lessons in this section of the website go into some details about various functions of payroll and are linked when appropriate.
In Lesson 30 I explained the payroll account structure using parent-child accounts. This lesson is a part of the daily operations section of bookkeeping illustrating an actual payroll entry. If you haven’t done so yet, please read: Payroll – An Introduction.
