Florida General Contractor Practice Exam

What form is used to report and pay annual Federal unemployment taxes?

1. Form 1040

2. Form 941

3. Form 940

4. Form W-2

The correct answer is: Form 940

The correct choice is related to the reporting and payment of annual Federal unemployment taxes. Form 940 is specifically designated for employers to report their annual Federal Unemployment Tax Act (FUTA) tax. This form summarizes the amount of unemployment taxes owed for the year and is due annually. It is important to note that this form differs from others used in the tax reporting landscape. For example, Form 1040 is utilized by individuals to file their personal income taxes, while Form 941 is designed for employers to report income taxes, Social Security tax, and Medicare tax withheld from employee wages on a quarterly basis. The Form W-2, on the other hand, is used to report wages paid to employees and the taxes withheld from them, not the employer's unemployment tax obligations. Hence, Form 940 is the appropriate and accurate form for this specific purpose.