Bookkeeping For Dummies, 2nd Edition
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After you complete all your tax forms for individual employees, contractors, and vendors, you’re left with two annual summary reports that must be filed with the federal government:

  • Form 940, Employer’s Annual Federal Unemployment Tax Return contains an annual summary of your federal unemployment tax payments. You file this form quarterly as well as annually.

  • Form 945, Annual Return of Withheld Income Tax is a summary of all federal income tax withheld from vendors, contractors, pensions, or annuities. In most cases, this form just serves as a summary of the payments you make throughout the year as you withhold taxes. You can see a sample of Form 945 here:

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Lita Epstein, MBA, designs and teaches online courses in investing, finance, and taxes. She is the author of Trading For Dummies and Bookkeeping Workbook For Dummies.

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