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$102,310Arizona18,490Total$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.

Form940 for 20--:Employer's Annual Federal Unemployment (FUTA) Tax ReturnDepartment of the Treasury Internal Revenue ServiceOMB No. 1545-0028Employer identification number (EIN)00-0003793Name(not your trade name)RUNSON MOVING COMPANYTrade name(if any)Address423 BRISTOL PIKENumberStreetSuite or room numberSACRAMENTOCA94203-4523CityStateZIP codeForeign country nameForeign province/countyForeign postal codeType of Return

(Select one.)Amended

Instructions and prior-year forms are available atwww.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. . . . . . . . . .1a1bIf 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34Payments exempt from FUTA tax. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4Select:Fringe benefits

5Total of payments made to each employee in excess of $7,000. . . . . . . . . . .56Subtotal(line 4 + line 5 = line 6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .67Total taxable FUTA wages(line 3 - line 6 = line 7) (see instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . .78FUTA tax before adjustments(line 7 x .006 = line 8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8Part 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) . . . . . . . . . . . . . . . . . . . . . . . . . . .11Part 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 YouMUSTcomplete both pages of this form andSIGNit.Check one: Apply to next return. Send a refund.NextFor Privacy Act and Paperwork Reduction Act Notice, see the back of Form 940-V, Payment Voucher.Cat. No. 11234OForm940(2016)

Name(not your trade name)Employer identification number (EIN)RUNSON MOVING COMPANY00-0003793Part 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) . . . . . . . . . . . . . . . . . . . . . . . . .16a16b2nd quarter(April 1 - June 30) . . . . . . . . . . . . . . . . . . . . . . . . . . . .16b16c3rd quarter(July 1 - September 30) . . . . . . . . . . . . . . . . . . . . . . . . .16c16d4th quarter(October 1 - December 31). . . . . . . . . . . . . . . . . . . . . . .16d17Total 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 IRSPart 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 hereMickey Vixon

Print your

name hereMickey VixonPrint your

title hereVice PresidentDate1/31/19Best daytime phone219-555-8310Paid Preparer Use OnlyCheck if you are self-employed . . . . Preparer's namePTINPreparer's signatureDate//Firm's name (or yours if self-employed)EINAddressPhoneCityStateZIP codePage2Form940(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. 1545-0028Employer identification number (EIN)00-0003793Name(not your trade name)Runson Moving CompanyPlace 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 theFUTA Taxable Wagesbox 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 MT0.000Total Credit Reduction.Add all amounts shown in theCredit Reductionboxes. 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. 16997CSchedule A (Form 940) 2016

Source:Internal Revenue Service