Ten Small Cities to Start a Business in 2023
Are you starting a new business? Have you thought about where you would like to start a business? Learn more about the best small cities to start a business.
Learn the basics of the FUTA tax in this article.
The Federal Unemployment Tax Act (FUTA) is an unemployment tax companies must pay on behalf of their employees. If your business paid at least $1,500 in wages during any business quarter in the current or previous year, you must pay FUTA.
FUTA – which has a different system and rate for each state – provides compensation to workers who’ve lost their jobs. The federal rate is 6.0%, and if employers live in a state with its own unemployment tax, they can earn a 5.4% credit for taxable income. That is, if they pay their State Unemployment Tax (SUTA) on time, and regularly.
Because of the SUTA tax credit, most employees end up paying 0.6% of the first $7,000 per year of each employee’s salary. The wage base for FUTA is $7,000. Generally, that equals a maximum cost for FUTA per employee per year as $42. The more employees, the more FUTA.
To determine what you must pay in FUTA, check out Form 940 here.
Are you starting a new business? Have you thought about where you would like to start a business? Learn more about the best small cities to start a business.
Your filing status is perhaps the most important piece of information when it comes to tax withholding. Learn which filing status applies to you.
How often should you submit a new W-4? What is your filing status? In this article, we break down some of the most common W-4 questions.