FUTA Tax Rates
FUTA Tax Rates
are you looking for the FUTA tax rates?
This is otherwise known as the Federal Unemployment Tax Act
The employer pays the FUTA tax based on a percentage system. We are talking about the federal branch of unemployment. There is also a state branch of unemployment tax, which is a whole different article. This article will discuss the federal unemployment tax act.
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How to Calculate Futa Tax Rates.
Try using Quickbooks payroll withholding tax calculator. Federal & State unemployment withholding taxes are calculated for you, then you can choose to pay employees with their free direct deposit, or print checks & stubs on your own printer.
Reporting and depositing payroll taxes to the appropriate agency in an accurate and timely manner is vital to your business. Late or inaccurate deposits may result in penalties and interest charges. These complex payroll tax requirements may seem intimidating but by using the online payroll tax calculator you can simplify this responsiblilty.
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Calculate FUTA Tax Rates
As the employer, you will have to file Form 940. By the way, the whole point of this tax is to collect funds to pay to employees who have lost their jobs. We have all heard of someone collecting unemployment haven’t we? Well this money did not just magically appear. The employer has been paying the FUTA tax. This money is not withheld from the employee’s wages.
FUTA Tax Rates
The FUTA tax rate is 6.2% of taxable wages. The taxable wage base is the first $7,000 paid in wages to each employee during a calendar year. Employers who pay the state unemployment tax, will receive an offset credit of up to 5.4%. The net FUTA tax rate is generally 0.8% (6.2% – 5.4%).
FUTA tax is filed annually using tax form 940. There is a limit on the total amount due and if you owe more than the limit you will have to pay a penalty and interest charges. To avoid penalties and interest charges the business will have to submit deposit payments in advance. This is where payroll accounting software comes in handy.
Available Resources for FUTA Tax Rates
Online tax preparation software can really help you out here. You can use the tax calculator to estimate withholding and get all sorts of help with your business taxes. You can click on the support tab of such a company, such as TurboTax Online, enter FUTA tax rates in the search box and have a whole award winning tax library at your fingertips. As an employer, you probably have enough to take care of already.
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Take a look at TurboTax Online today to discover what you have been missing! A complicated tax subject can really get messy if you don’t know what you’re doing. Get help from the tax experts today and gain all of the knowledge you will need about the FUTA tax rates.
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