One form that I found to be quite confusing was the 940 form

I purchased a small business last year and in the process, hired 12 employees. Because of that business purchase, I had to think about all kinds of tax issues that were very new to me. I’m thankful for the Internet and my accountant as they helped to explain them all to me.

One particular form that I found to be quite confusing was the 940 form. I wasn’t sure if I needed to file this form or not, as I had not paid out any unemployment in the calendar year. I had paid my employees though and so, thought that filing this form might be necessary. I did a quick Internet search to find my answers and found that I did indeed need to file the form. I then contacted my accountant who assured me that she would help me to take care of the form.

Next year I would imagine that tax time will be a bit easier. I will be familiar with all of these forms and have them ready well in advance of tax time.

Here we are. It is tax time again in this Tuesday morning of the third week in January. This begins the time of year when employers work in earnest to release tax documents to their employees so that they may file returns and earn any refunds due to them. Some of the best tax and payroll writers on the World Wide Web tell us not to panic about the Internal Revenue Service 940 form this month. There are three important considerations you need to keep in mind that will determine whether this form is one you need to include in your business or personal tax planning. As an employee, and only in that capacity, you will generally not encounter this form. It is only one that applies to those who pay wages to others. It is not necessarily applicable to those who pay independent contractors. Private individuals most likely to encounter issues with the form will be those who have part-time hired help, like housekeepers or babysitters. If you have employed someone in this capacity, you need to find out whether you’re required to file the form.

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