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In general, you must deposit these taxes by check or cash to an authorized financial institution, typically your bank. Check with your tax professional to make sure you are not required to use Electronic Federal Tax Deposit System (EFTPS). Regardless of payment method, you will then report them on Form 941, Employer’s Quarterly Federal Tax Return
Federal Unemployment Tax (FUTA)
FUTA is a combined federal and state program that provides unemployment compensation to unemployed. As a business owner, you are solely responsible for paying this tax, to wit, nothing is withheld from paychecks of your employees. FUTA is determined by using Form 940, but you are encouraged to use a tax professional to determine payment amounts.
Employment taxes can be frustrating for a small business owner. They are, unfortunately, a necessary evil as your business grows.
Richard Chapo is with Business Tax Recovery - Obtaining tax refunds for small businesses for overpaid taxes. Go to our article section to discover tax strategies and deductions.