When should federal unemployment taxes be calculated?

Federal unemployment taxes (FUTA) are generally calculated on a quarterly basis. Employers are required to report their federal unemployment taxes by filing Form 940, which summarizes the amount of wages subject to FUTA taxes, any credits taken for state unemployment taxes, and the total FUTA liability for the year.

Calculating these taxes quarterly aligns with the requirement for employers to keep up with their tax obligations and helps in maintaining accurate payroll records. As a result, this frequency allows employers to make timely adjustments and ensure compliance with tax regulations.

Other options such as monthly, yearly, or weekly do not align with the guidance provided by the IRS for FUTA tax reporting and payment. Monthly calculations might be too frequent and can lead to unnecessary complications, while yearly calculations would not allow for the timely filing and remittance of taxes owed. Weekly calculations are also impractical given the quarterly reporting requirements. Therefore, quarterly is the established timeframe for calculating federal unemployment taxes, making it the correct answer.