Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the available 2017 rates were used for FUTA and SUTA Note For this textbook edition the rate 0 6 was used for the FUTA tax rate for employers As the accountant for Runson Moving Company, you are preparing the company's annual return, Form 940 and Schedule A Use the following information to complete Form 940 and Schedule A The net FUTA tax liability for each quarter of 2018 was as follows 1st, $220 10 2nd, $107 60 3rd, $101 00 and 4th, $56 10 plus the credit reduction Since the net FUTA tax liability did not exceed $500 until the 4th quarter, the company was required to make its first deposit of FUTA taxes on January 31, 2019 Assume that the electronic payment was made on time a One of the employees performs all of his duties in another stateArizona b Total payments made to employees during calendar year 2018 California$102,310Arizona 18,490 Total$120,800 c Employer contributions in California into employees' 401(k) retirement plan $3,500 d Payments made to employees in excess of $7,000 $36,500 ($11,490 from Arizona and $25,010 from California) e Form is to be signed by Mickey Vixon, Vice President f Phone number(219) 555 8310 If an input box does not require an entry, leave it blank When required, round amounts to the nearest cent Use rounded answers for subsequent computations Form 940 for 20 Employer's Annual Federal Unemployment (FUTA) Tax Return Department of the Treasury Internal Revenue ServiceOMB No 1545 0028 Employer identification number (EIN) 00 0003793 Name (not your trade name) RUNSON MOVING COMPANY Trade name (if any) Address 423 BRISTOL PIKENumberStreetSuite or room numberSACRAMENTOCA94203 4523CityStateZIP codeForeign country nameForeign province countyForeign postal code Type of Return (Select one ) Amended Instructions and prior year forms are available at www irs gov form940 Read the separate instructions before you fill out this form Please type or print within the boxes Part 1 Tell us about your return If any line does NOT apply, leave it blank 1aIf you had to pay state unemployment tax in one state only, enter the state abbreviation 1a 1bIf you had to pay state unemployment tax in more than one state, you are a multi state employer 1b Check here Complete Schedule A (Form 940) 2If you paid wages in a state that is subject to CREDIT REDUCTION 2 Check here Complete Schedule A (Form 940) Part 2 Determine your FUTA tax before adjustments If any line does NOT apply, leave it blank 3Total payments to all employees 3 4Payments exempt from FUTA tax 4 Select Fringe benefits 5Total of payments made to each employee in excess of $7,000 5 6Subtotal (line 4 line 5 line 6) 6 7Total taxable FUTA wages (line 3 line 6 line 7) (see instructions) 7 8FUTA tax before adjustments (line 7 x 006 line 8) 8 Part 3 Determine your adjustments If any line does NOT apply, leave it blank 9If ALL of the taxable FUTA wages you paid were excluded from state unemployment tax, multiply line 7 by 054 (line 7 x 054 line 9) Go to line 12 910If SOME of the taxable FUTA wages you paid were excluded from state unemployment tax, OR you paid ANY state unemployment tax late (after the due date for filing Form 940), fill out the worksheet in the instructions Enter the amount from line 7 of the worksheet 1011If credit reduction applies, enter the total from Schedule A (Form 940) 11 Part 4 Determine your FUTA tax and balance due or overpayment If any line does NOT apply, leave it blank 12Total FUTA tax after adjustments (lines 8 9 10 11 line 12) 1213FUTA tax deposited for the year, including any overpayment applied from a prior year 1314Balance due (If line 12 is more than line 13, enter the excess on line 14 ) If line 14 is more than $500, you must deposit your tax If line 14 is $500 or less, you may pay with this return (see instructions) 1415Overpayment (If line 13 is more than line 12, enter the excess on line 15 and check a box below ) 15 You MUST complete both pages of this form and SIGN it Check one Apply to next return Send a refund Next For Privacy Act and Paperwork Reduction Act Notice, see the back of Form 940 V, Payment Voucher Cat No 11234OForm 940 (2016) Name (not your trade name) Employer identification number (EIN) RUNSON MOVING COMPANY00 0003793 Part 5 Report your FUTA tax liability by quarter only if line 12 is more than $500 If not, go to Part 6 16Report the amount of your FUTA tax liability for each quarter do NOT enter the amount you deposited If you had no liability for a quarter, leave the line blank 16a1st quarter (January 1 March 31) 16a 16b2nd quarter (April 1 June 30) 16b 16c3rd quarter (July 1 September 30) 16c 16d4th quarter (October 1 December 31) 16d 17Total tax liability for the year (lines 16a 16b 16c 16d line 17) 17Total must equal line 12 Part 6 May we speak with your third party designee Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with the IRS See the instructions for details Designee's name and phone numberSelect a 5 digit Personal Identification Number (PIN) to use when talking to IRS Part 7 Sign here You MUST fill out both pages of this form and SIGN it Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete, and that no part of any payment made to a state unemployment fund claimed as a credit was, or is to be, deducted from the payments made to employees Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge Sign your name here Mickey Vixon Print your name hereMickey VixonPrint your title hereVice PresidentDate1 31 19Best daytime phone219 555 8310 Paid Preparer Use Only Check if you are self employed Preparer's namePTINPreparer's signatureDate Firm's name (or yours if self employed)EINAddressPhoneCityStateZIP codePage 2 Form 940 (2016) Source Internal Revenue Service Schedule A (Form 940) for 20 Multi State Employer and Credit Reduction Information Department of the Treasury Internal Revenue ServiceOMB No 1545 0028 Employer identification number (EIN) 00 0003793 Name (not your trade name) Runson Moving Company Place an X in the box of EVERY state in which you had to pay state unemployment tax this year For each state with a credit reduction rate greater than zero, enter the FUTA taxable wages, multiply by the reduction rate, and enter the credit reduction amount Don't include in the FUTA Taxable Wages box wages that were excluded from state unemployment tax (see the instructions for Step 2) If any states don't apply to you, leave them blank Postal AbbreviationFUTA Taxable WagesReduction RateCredit ReductionPostal AbbreviationFUTA Taxable WagesReduction RateCredit Reduction AK0 000 NC0 000 AL0 000 ND0 000 AR0 000 NE0 000 AZ0 000 NH0 000 CA0 018 NJ0 000 CO0 000 NM0 000 CT0 000 NV0 000 DC0 000 NY0 000 DE0 000 OH0 000 FL0 000 OK0 000 GA0 000 OR0 000 HI0 000 PA0 000 IA0 000 RI0 000 ID0 000 SC0 000 IL0 000 SD0 000 IN0 000 TN0 000 KS0 000 TX0 000 KY0 000 UT0 000 LA0 000 VA0 000 MA0 000 VT0 000 MD0 000 WA0 000 ME0 000 WI0 000 MI0 000 WV0 000 MN0 000 WY0 000 MO0 000 PR0 000 MS0 000 VI0 018 MT0 000 Total Credit Reduction Add all amounts shown in the Credit Reduction boxes Enter the total here and on Form 940, line 11 For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 940 Cat No 16997C Schedule A (Form 940) 2016 Source Internal Revenue Service

Question

Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the available 2017 rates were used for FUTA and SUTA  Note  For this textbook edition the rate 0 6  was used for the FUTA tax rate for employers  As the accountant for Runson Moving Company, you are preparing the company's annual return, Form 940 and Schedule A  Use the following information to complete Form 940 and Schedule A  The net FUTA tax liability for each quarter of 2018 was as follows  1st, $220 10  2nd, $107 60  3rd, $101 00  and 4th, $56 10 plus the credit reduction  Since the net FUTA tax liability did not exceed $500 until the 4th quarter, the company was required to make its first deposit of FUTA taxes on January 31, 2019  Assume that the electronic payment was made on time  a  One of the employees performs all of his duties in another stateArizona  b  Total payments made to employees during calendar year 2018  California$102,310Arizona 18,490 Total$120,800 c  Employer contributions in California into employees' 401(k) retirement plan  $3,500  d  Payments made to employees in excess of $7,000  $36,500 ($11,490 from Arizona and $25,010 from California)  e  Form is to be signed by Mickey Vixon, Vice President  f  Phone number(219) 555 8310  If an input box does not require an entry, leave it blank  When required, round amounts to the nearest cent  Use rounded answers for subsequent computations  Form 940 for 20   Employer's Annual Federal Unemployment (FUTA) Tax Return Department of the Treasury Internal Revenue ServiceOMB No  1545 0028 Employer identification number (EIN) 00 0003793 Name (not your trade name) RUNSON MOVING COMPANY Trade name (if any) Address 423 BRISTOL PIKENumberStreetSuite or room numberSACRAMENTOCA94203 4523CityStateZIP codeForeign country nameForeign province countyForeign postal code Type of Return (Select one ) Amended Instructions and prior year forms are available at www irs gov form940  Read the separate instructions before you fill out this form  Please type or print within the boxes  Part 1  Tell us about your return  If any line does NOT apply, leave it blank 1aIf you had to pay state unemployment tax in one state only, enter the state abbreviation                     1a 1bIf you had to pay state unemployment tax in more than one state, you are a multi state employer       1b Check here  Complete Schedule A (Form 940)  2If you paid wages in a state that is subject to CREDIT REDUCTION                                                       2 Check here  Complete Schedule A (Form 940)  Part 2  Determine your FUTA tax before adjustments  If any line does NOT apply, leave it blank  3Total payments to all employees                                                                                                             3 4Payments exempt from FUTA tax                                                                     4 Select  Fringe benefits 5Total of payments made to each employee in excess of $7,000                       5 6Subtotal (line 4   line 5   line 6)                                                                                                               6 7Total taxable FUTA wages (line 3   line 6   line 7) (see instructions)                                                       7 8FUTA tax before adjustments (line 7 x  006   line 8)                                                                                 8 Part 3  Determine your adjustments  If any line does NOT apply, leave it blank  9If ALL of the taxable FUTA wages you paid were excluded from state unemployment tax, multiply line 7 by  054 (line 7 x  054   line 9)  Go to line 12                                                                                           910If SOME of the taxable FUTA wages you paid were excluded from state unemployment tax, OR you paid ANY state unemployment tax late (after the due date for filing Form 940), fill out the worksheet in the instructions  Enter the amount from line 7 of the worksheet                                                                           1011If credit reduction applies, enter the total from Schedule A (Form 940)                                                       11 Part 4  Determine your FUTA tax and balance due or overpayment  If any line does NOT apply, leave it blank 12Total FUTA tax after adjustments (lines 8   9   10   11   line 12)                                                           1213FUTA tax deposited for the year, including any overpayment applied from a prior year                       1314Balance due (If line 12 is more than line 13, enter the excess on line 14 ) If line 14 is more than $500, you must deposit your tax  If line 14 is $500 or less, you may pay with this return  (see instructions)                                                     1415Overpayment (If line 13 is more than line 12, enter the excess on line 15 and check a box below )                 15 You MUST complete both pages of this form and SIGN it Check one  Apply to next return  Send a refund  Next For Privacy Act and Paperwork Reduction Act Notice, see the back of Form 940 V, Payment Voucher  Cat  No  11234OForm 940 (2016) Name (not your trade name) Employer identification number (EIN) RUNSON MOVING COMPANY00 0003793 Part 5  Report your FUTA tax liability by quarter only if line 12 is more than $500  If not, go to Part 6 16Report the amount of your FUTA tax liability for each quarter  do NOT enter the amount you deposited  If you had no liability for a quarter, leave the line blank  16a1st quarter (January 1   March 31)                                                   16a 16b2nd quarter (April 1   June 30)                                                         16b 16c3rd quarter (July 1   September 30)                                                   16c 16d4th quarter (October 1   December 31)                                              16d 17Total tax liability for the year (lines 16a   16b   16c   16d   line 17) 17Total must equal line 12  Part 6  May we speak with your third party designee  Do you want to allow an employee, a paid tax preparer, or another person to discuss this return with the IRS  See the instructions for details  Designee's name and phone numberSelect a 5 digit Personal Identification Number (PIN) to use when talking to IRS Part 7  Sign here  You MUST fill out both pages of this form and SIGN it  Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct, and complete, and that no part of any payment made to a state unemployment fund claimed as a credit was, or is to be, deducted from the payments made to employees  Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge  Sign your name here Mickey Vixon Print your name hereMickey VixonPrint your title hereVice PresidentDate1 31 19Best daytime phone219 555 8310 Paid Preparer Use Only Check if you are self employed         Preparer's namePTINPreparer's signatureDate  Firm's name (or yours if self employed)EINAddressPhoneCityStateZIP codePage 2 Form 940 (2016) Source  Internal Revenue Service Schedule A (Form 940) for 20   Multi State Employer and Credit Reduction Information Department of the Treasury Internal Revenue ServiceOMB No  1545 0028 Employer identification number (EIN) 00 0003793 Name (not your trade name) Runson Moving Company Place an  X  in the box of EVERY state in which you had to pay state unemployment tax this year  For each state with a credit reduction rate greater than zero, enter the FUTA taxable wages, multiply by the reduction rate, and enter the credit reduction amount  Don't include in the FUTA Taxable Wages box wages that were excluded from state unemployment tax (see the instructions for Step 2)  If any states don't apply to you, leave them blank Postal AbbreviationFUTA Taxable WagesReduction RateCredit ReductionPostal AbbreviationFUTA Taxable WagesReduction RateCredit Reduction AK0 000 NC0 000 AL0 000 ND0 000 AR0 000 NE0 000 AZ0 000 NH0 000 CA0 018 NJ0 000 CO0 000 NM0 000 CT0 000 NV0 000 DC0 000 NY0 000 DE0 000 OH0 000 FL0 000 OK0 000 GA0 000 OR0 000 HI0 000 PA0 000 IA0 000 RI0 000 ID0 000 SC0 000 IL0 000 SD0 000 IN0 000 TN0 000 KS0 000 TX0 000 KY0 000 UT0 000 LA0 000 VA0 000 MA0 000 VT0 000 MD0 000 WA0 000 ME0 000 WI0 000 MI0 000 WV0 000 MN0 000 WY0 000 MO0 000 PR0 000 MS0 000 VI0 018 MT0 000 Total Credit Reduction  Add all amounts shown in the Credit Reduction boxes  Enter the total here and on Form 940, line 11     For Privacy Act and Paperwork Reduction Act Notice, see the Instructions for Form 940  Cat  No  16997C Schedule A (Form 940) 2016 Source  Internal Revenue Service

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Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the

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