Pressure tanks do not hold the amount of water that they are called ( At least bladder style tanks ) A 40 Gallon only holds about 12 Gals of water a 20 Gallon holds about 6 . The pump will kick on at 40 and turn off at 60 and the pressure tank holds the water that goes to your fixtures ( 20/40,30/50,40/60 are typical pump switch settings ) The larger the pressure tank the less the pump cycles on and off, you are better off with the biggest tank your system will support, if you go to big the pump can **** well dry if it can't recover fast enough to small of a tank and you cycle your pump more and cause undo wear.
I would drain tank so there is no water, check pressure and set it 2 pounds less than pump kick on pressure. Turn pump back on and with all fixtures closed see if pressure gauge drops. If all looks good I would start with replacing pressure switch ( First clean the tube below the gauge as it tends to collect sediment and give you false readings )