Good advice but this bit is wrong.
but you do want to make sure will always be below 40 mA before feeding it into an Arduino
That current is the current limits when the arduino pins are outputs.
They are only one wire, and carry no power that I know of,
Yes they do, one end is connected to 12V, the other end of your resistor must be connected to ground.
Split the resistor in two, have one going from ground to the arduino input, the other going from the arduino input to the sensor. Make sure thar you do not exceed 5V at the arduino by choosing the resistor values correctly.