Do you dread tax season? Are you confused about different tax forms and what they mean? Here are the most common tax forms to know and how to file them.
One-third of Americans file their own taxes every year.
If your tax situation is pretty straight-forward, it seems silly to pay a tax professional to file something you could easily do yourself. Instead, save a few bucks this year and file your taxes on your own. But first, you’ll need to do some research so you know what forms you need and which information to include.
Keep reading to learn more about the most common tax forms everyone should know about.
One of the most common tax forms is the W-2. That’s because anyone who is traditionally employed should receive one of these from their workplace. This form may also be called a Wage and Tax Statement.
This document will include your annual earnings and the amount of taxes withheld from your paychecks. Since this form is sent to you, you won’t actually need to fill out anything on this document. Instead, you’ll use the information included on it to file your taxes.
If you want to learn more about the specifics of your W-2, continue to this page.
If you don’t have a traditional job, then you won’t receive a W-2. Instead, if you are a freelancer or contractor, you’ll receive a Form 1099-Misc. If you’ve earned at least $600 throughout the year, the person or business you worked for should send one of these instead of a W-2.
This form will contain how much you earned throughout the year from this one source. But instead of also including your tax deductions, taxes aren’t deducted for contractors or freelancers. Instead, those who are self-employed should be accounting for this amount throughout the year on their own.
Once you get past the income-driven forms, there are still many different types of tax forms. A common example is Form 1098.
If you are a homeowner still paying on a mortgage, this acts as a mortgage interest statement. You can use the information contained in this document as one of your deductions.
Form 1098-T is similar but instead of dealing with mortgage payments, it deals with student loan payments.
There are many different types of tax forms used to actually file your taxes, but the Form 1040 is the most common. Once you’ve gathered all your other forms listed above, you’ll enter that information onto this document.
This form is divided into sections in which you declare your income and deductions. These figures then help you calculate how much of a tax refund you’ll receive or how much you owe the IRS.
Each section will explain what should be entered into the blank space, making it a relatively simple process.
Gather Your Common Tax Forms Before April 15
Now that you know more about the common tax forms, it’s time to get all your information together and filed before the April 15th deadline.
Keep in mind that you should only file on your own if you’re confident in your situation. If you have questions about a miscellaneous form of income or how to claim certain deductions, then you may need the help of a professional.
If you run your own business, this could make the situation a little more complicated. In that case, browse the rest of this site for tax advice when it comes to business owners.