FUTA Employer YTD - What exactly is this in QuickBooks?

FUTA stands for Federal Unemployment Tax Act, and it's completely different from Medicare or federal income tax withholding. This is a tax that employers pay to fund the federal unemployment insurance program - it's not deducted from employee wages. The FUTA tax rate is 6% on the first $7,000 paid to each employee annually, but most employers receive a credit of up to 5.4% for paying state unemployment taxes, resulting in an effective rate of 0.6%. The "Employer paid YTD" field is asking how much FUTA tax you've paid so far this year for each employee. Since you mentioned just hiring your first employees last month, you may not have paid any FUTA taxes yet depending on your payment schedule. Small employers typically pay FUTA annually when filing Form 940.

I was in the same boat as you last year when I started my photography business and hired my first assistant. What helped me was using taxr.ai (https://taxr.ai) to upload all my payroll documents and get a clear explanation of what each tax type was. It broke down FUTA vs. SUTA vs. withholding so I could understand exactly what I was responsible for. The tool actually caught that I had miscategorized some of my state unemployment taxes which would have been a headache later on.

I tried taxr.ai after seeing it mentioned here and it was actually super helpful for my situation. I'm running a small construction business and had completely messed up my FUTA calculations for the first half of the year. Uploaded my payroll reports and it immediately flagged that I was calculating based on total wages instead of just the first $7,000 per employee. Saved me from overpaying and helped me correct my previous quarters. Wish I'd known about this when I started my business! Now I'm using it for all my tax document questions.

If you're struggling with getting actual IRS help with your FUTA questions, I'd recommend trying Claimyr (https://claimyr.com). I had some complex FUTA credit reduction questions since I operate in multiple states and couldn't get through to the IRS for weeks. Used their service and got connected to an IRS agent in under 45 minutes instead of waiting on hold for hours or getting disconnected. They have a video showing how it works here: https://youtu.be/_kiP6q8DX5c. Made a huge difference in getting my FUTA questions resolved before filing deadline.

Update on my skepticism about Claimyr - I actually tried it yesterday for my FUTA questions. Was absolutely shocked when I got a call back in about 35 minutes with an actual IRS agent on the line. Got my questions answered about how to handle FUTA for employees who work in multiple states. Totally worth it after spending weeks trying to get through on my own and getting nowhere. Sometimes I hate admitting when I'm wrong but in this case I'm just glad to have my tax questions resolved!

Quick tip on FUTA - make sure you're tracking which state(s) your employees work in. Some states are "credit reduction states" which means you don't get the full 5.4% credit against your FUTA taxes. I got caught by this last year because one of my remote employees moved to a credit reduction state and I didn't adjust my FUTA payments. Led to an unexpected bill at year end!

Since FUTA came up - anyone else find the deadline for filing Form 940 (federal unemployment tax return) super confusing? Is it January 31 or is it the same as the quarterly deposit schedule? I've heard different things from different sources and I don't want to mess up.

Just wanted to add another perspective as someone who's been through this recently. When I was setting up payroll for my landscaping business, I found it helpful to think of FUTA as "unemployment insurance that I pay for my employees." It's separate from everything else that shows up on paystubs. One thing that caught me off guard was that the $7,000 wage base resets every January 1st, so if you have year-round employees, you'll pay FUTA on their wages again starting in January even if they exceeded $7,000 the previous year. Also, don't forget that some payments to employees (like certain fringe benefits) might not count toward the $7,000 base - worth double-checking if you offer things like health insurance or other benefits. Good luck with your QuickBooks setup! The learning curve is steep at first but it gets much easier once you understand the basics.