Tax Term of the Week

IRS Form 940 - (Annual Unemployment Tax Return)- Each business reports Federal Unemployment Tax Act (FUTA) tax based on the amount paid to each employee. This tax applies to the first $7,000 paid to each employee [Federal base = $7,000; State base is different] in a year after subtracting any exempt payments. The FUTA tax along with state unemployment systems provides payments of unemployment compensation to workers who have lost their jobs