Federal Unemployment Deposit Requirements Lowered!

According to the latest news from the IRS, life gets a little simpler for small employers as the federal unemployment tax deposit requirement is raised to $500 for 2005. This is a nice increase from the $100 deposit requirement in effect SINCE 1970!

The federal unemployment tax (FUTA) is charged on the first $7,000 of wages for each employee, each year. A business has to calculate their liability each quarter, and deposit the tax when their liability exceeds the IRS threshhold.

While this change doesn't reduce the amount of tax a business will owe, it will reduce the number of deposits required for many small businesses. Essentially, most businesses with less than 10 employees will only deposit annually...not a life-changing rule, but a definite timesaver.

Of course, the best timesaver is to hire your payroll out. Give us a call if you're interested in finding more on our payroll services.