940 Form
Financial Dictionary — US Payroll & Tax Forms
Definition
is the U.S. IRS Employer's Annual Payroll Tax form.
Detailed Explanation
IRS Form 940 is the annual employer return for federal unemployment tax (FUTA) in the United States. Employers use it to report and pay FUTA tax, subject to credits and rules.
Common Uses
- Used when computing taxes, preparing returns, and documenting tax positions.
- Used to evaluate transaction tax impact and ensure compliance (VAT/GST/Corporate Tax).
- Used to evaluate transaction tax impact and ensure compliance (VAT/GST/Corporate Tax).
Practical Example
- Example: The tax team applies **940 Form** to determine the correct tax treatment and to support the filing.
Why This Term Matters
- Why it matters: Reduces compliance risk, helps avoid penalties, and supports consistent tax reporting and defensible positions.