The world of taxes can be complex, although it’s an important life of any adult. The best way to dip your toe in the waters of taxes is by learning more about tax forms.
Tax forms are official government documents you’re required to fill in order to pay your taxes. Taxpayers fill different forms depending on their specific situation.
This brief guide will allow you to understand what are the most common tax forms and in what cases you should use them.
This is the tax form commonly used by taxpayers to file their income tax returns, although nonresident aliens use form 1040NR. This is a relatively simple form: comprises two pages with your personal information and 24 numbered lines.
This version of the form 1040 can be used by taxpayers who are age 65 or older. It also comprises two pages and 24 numbered lines.
Employers send this form to their employees and in turn, they use it to prepare their tax returns. Every employer who pays remuneration (including noncash payments) of $600 or more for the year, must file a W-2 form for every employee.
Just as form W-2 is used by employees, the form 1099-MISC is used by freelancers and independent contractors who have earned at least $600 during the year in services performed, rent, prizes, awards, crop insurance proceeds, payments to an attorney among others.
This is the form to use when you report ordinary dividends, federal income tax withheld, and foreign source income from investments held by fund companies.
Banks, brokerage firms, and financial institutions issue this form so you can show interest income from savings accounts and US saving bonds and Treasure obligations, among others.
Use this form to report your “Certain Government Payments”, that includes unemployment compensation, state or local income tax refunds, taxable grants, or agricultural payments.
No matter what form you file, remember that you have until Wednesday April 15 2020 to submit your tax return to the IRS.
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