nstruction 5-1

Use the net FUTA tax rate of 0.6% on the first $7,000 of taxable wages.

a. Complete Part 2 of Form 940 based on the following information:

Total payroll for the year $913,590

Payroll to employees in excess of $7,000 $421,930

Employer contributions into employees' 401(k) plans (included in total payroll) $23,710

Source: Internal Revenue Service

b. Complete Part 5 of Form 940 for the employer given the breakdown of FUTA taxable

wages for the year to be:

First quarter	$237,000
Second quarter	$168,000
Third quarter	$54,000
Fourth quarter	$8,950
Yearly total	$467,950