How to Prepare and File Form 940 in QuickBooks for FUTA Taxes

Every employer in the United States is required to report and pay Federal Unemployment Tax (FUTA) annually. For QuickBooks users, handling this form can feel like one more task on an already busy to-do list. The good news? QuickBooks makes filing Form 940 simple, accurate, and efficient with the right setup. Understanding how to manage Form 940 in QuickBooks ensures your business stays compliant without unnecessary stress.

Whether you’re using Form 940 in QuickBooks Desktop or Form 940 in QBO Payroll, this guide walks you step by step through the process—so you can file confidently and focus more on running your business.

If you need further assistance, you can always connect at +1-866-408-0444 for quick, one-on-one guidance.

Understanding Form 940 and FUTA Tax

Before we dive into QuickBooks, it’s essential to know what Form 940 is. The IRS Form 940, also known as the Employer’s Annual Federal Unemployment (FUTA) Tax Return, is used to report the federal unemployment tax that provides funds to pay unemployment compensation to workers who have lost their jobs.

Employers pay FUTA tax on the first $7,000 of each employee’s annual wages. The current rate may vary depending on state credit reductions. Keeping track of these figures manually can be cumbersome—but that’s exactly where QuickBooks 940 form management shines.

Setting Up FUTA Tax in QuickBooks

To file Form 940 correctly, you’ll need to ensure your payroll setup is configured properly. Here’s how to set it up in QuickBooks Desktop and QBO Payroll.

In QuickBooks Desktop Payroll

1. Open your company file and navigate to the Payroll Center.

2. Click on Pay Liabilities and choose Change Payment Method.

3. Confirm that Federal Unemployment Tax (FUTA) is listed with the correct agency and frequency.

4. Assign the FUTA tax to the right expense and liability accounts.

5. Ensure all employee wage details are accurate, including exemptions or credits for multi-state operations.

Once this is done, Form 940 in QB Desktop Payroll automatically pulls accurate data into the report, avoiding manual entry errors.

In QuickBooks Online Payroll (QBO)

1. Go to Taxes > Payroll Tax > Tax setup.

2. Confirm your federal tax details and verify FUTA tax is active.

3. Check each employee’s wage type to ensure inclusion in FUTA calculations.

4. If your business qualifies for state credits, QuickBooks applies those automatically during e-filing.

If you face configuration issues, you can reach out at +1-866-408-0444 for personalized assistance before filing.

Preparing Form 940 in QuickBooks Step-by-Step

Once your payroll data is accurate, you’re ready to create the QuickBooks 940 form. The process differs slightly between Desktop and Online, but both are intuitive.

How to File Form 940 with QuickBooks Desktop

1. Open QuickBooks Desktop and go to Employees > Payroll Tax Forms & W-2s > Process Payroll Forms.

2. Choose Annual Form 940 from the list.

3. Select the year for which you’re filing.

4. Review the pre-filled information, including business name, EIN, and FUTA liability.

5. Verify employee wage details—QuickBooks calculates FUTA automatically based on payroll data.

6. Make necessary adjustments for credits or additional state taxes.

7. Preview the form and print or e-file it directly to the IRS.

Filing directly from QuickBooks saves time and ensures compliance with current tax laws. If you find any discrepancies while reviewing the data, double-check your payroll summary before submission.

Filing Form 940 in QBO Payroll

If you’re using QuickBooks Online Payroll, the filing process is even simpler:

1. Navigate to Taxes > Payroll Tax.

2. Select Annual Forms, then choose Form 940.

3. Review details and make sure all employee data aligns with your payroll records.

4. Use the E-File option and follow on-screen instructions to submit.

With Form 940 in QBO Payroll, e-filing is built in—no additional software or uploads needed.

Reviewing and Submitting QB Form 940

Before submitting, take a few moments to review everything. Ensure that:

• The EIN and business name match IRS records.

• Total taxable wages and FUTA liability are accurate.

• State unemployment credit reductions (if any) are correctly reflected.

Once verified, you can e-file your QB form 940 directly or print a copy for mailing. QuickBooks generates a confirmation once it’s filed. Keep that record safe—it’s proof of submission in case the IRS requests verification later.

If you’re unsure about any detail or notice calculation inconsistencies, you can call +1-866-408-0444 to clarify before submission. A quick check beforehand can prevent possible penalties or mailing delays.

Key Tips for a Smooth Filing

• Update Payroll Before Filing: Always install the latest payroll updates before generating Form 940 in QuickBooks Desktop. This ensures correct tax table calculations.

• Double-Check Wage Limits: Remember, FUTA applies only to the first $7,000 earned per employee.

• Preview Before You Submit: Reviewing helps you verify data and correct minor errors early.

• Schedule Filing Early: Avoid deadline stress by preparing your file QuickBooks form 940 at least a week before January 31.

For any uncertainties, reaching out at +1-866-408-0444 ensures you get prompt, accurate help during the process.

Common Issues When Filing Form 940

Sometimes, users encounter errors or mismatched figures while trying to file Form 940 with QuickBooks. Common issues include:

• Incorrect FUTA rate applied after a tax table update.

• Employee wage details missing for new hires.

• Form not generating due to inactive payroll service.

• State credit adjustments not reflected.

These issues can usually be fixed quickly by reviewing payroll item mapping or reinstalling updates. If they persist, an expert can walk you through the fix—just connect at +1-866-408-0444 for immediate guidance.

FAQs

1. How often should I file Form 940 in QuickBooks?

Form 940 is filed once a year, typically by January 31. QuickBooks makes it easy to prepare and e-file in a few steps.

2. Can I e-file Form 940 from QuickBooks Desktop?

Yes. Both QuickBooks Desktop Enhanced Payroll and Assisted Payroll allow direct e-filing options for Form 940.

3. Does QuickBooks automatically calculate my FUTA tax?

Absolutely. Once your payroll setup is correct, QuickBooks automatically calculates and tracks FUTA tax each pay period.

4. What should I do if my data doesn’t match the IRS record?

Double-check your EIN, company name, and payroll amounts. If issues persist, verify your IRS account setup before re-filing.

Final Thoughts

Managing Form 940 in QuickBooks doesn’t have to be overwhelming. With accurate setup, timely updates, and a few minutes of review, your FUTA tax filing becomes a seamless task. Whether you’re using Form 940 in QuickBooks Desktop or Form 940 in QBO Payroll, QuickBooks ensures compliance while saving your valuable time.

For any guidance or clarification before submission, don’t hesitate to connect at +1-866-408-0444. A quick conversation could make your FUTA filing smoother and stress-free.