Form 940 Explained: Federal Unemployment (FUTA) Tax Return Guide for Small Business
What Form 940 is, who files it, when it's due, and how to fill it out. Complete guide for small business owners.
Form 940 is one of the forms every US small business eventually encounters. Here's everything you need to know.
What is Form 940?
940 — Federal Unemployment (FUTA) Tax Return
Purpose: Annual reconciliation of FUTA taxes
Filing deadline: January 31
Who must file Form 940?
If you're a US-based business or self-employed individual, you likely need to file Form 940 if any of these apply:
- You meet the threshold specific to this form
- You're in an applicable business activity or entity type
How to complete Form 940
The form can look intimidating, but the process breaks down into:
1. Collect the information (payee name, TIN, amount paid)
2. Fill out the form (paper or electronically)
3. Deliver copies (to recipient, IRS, and state if required)
4. Keep a copy for your records (7 years recommended)
Penalties for missing Form 940
Penalties scale with how late you file:
- Up to 30 days late: $60 per form
- 31 days to August 1: $130 per form
- After August 1 or not at all: $330 per form
- Intentional disregard: $660+ per form
For a business with 10 unfiled forms, that's $6,600 in penalties — easily avoided by filing on time.
How TinSuite generates Form 940
Instead of manually tracking, TinSuite auto-generates Form 940 at year-end:
- Contractor/employee data auto-populates from your records
- Amounts are pulled from payments/payroll data
- Generated PDF is IRS-ready
- Electronic filing supported