Whether you’re filing taxes yourself or having a tax preparer do them for you, it’s important to have all the necessary documents. Gathering them beforehand can save both time and frustration.
You should receive the majority of these documents by January 31, which is the new deadline for companies and employers to send out W-2 and 1099 forms. Each federal tax form is explained below so you can make sure you have everything you need to file your taxes.
If you work for someone else, your W-2 shows how much income you made over the past year. This form will list how much was withheld for social security, Medicare, and other taxes. The W-2 also contains voluntary contributions to retirement plans, childcare reimbursement plans, and medical accounts. You will receive one W-2 from each employer you worked for during the year.
If you are interested in learning more about W-2’s, check out our Ultimate Breakdown of the Boxes in your W-2.
Since the inception of the Affordable Care Act (often referred to as Obamacare), the 1095-A form has become an essential federal tax form for filing taxes for many people. If you or your family bought medical insurance independently through a state or federal exchange, you will receive a 1095-A form, which will help you calculate your premium tax credit. If you receive health insurance through your employer, you will receive a 1095-B or 1095-C form. However, taxpayers who receive healthcare through their employer are not required to submit these forms as part of their tax return.
If you are interested in learning more about the 1095 forms, check out our Ultimate Breakdown of 1095 Forms.
If you do freelance or consulting work or are otherwise an independent contractor, you will receive a 1099-MISC. This miscellaneous income form will show any income you’ve received from a company or individual for work that amounted to more than $600 for the year. Many who file with this form will have deductions like business mileage, home office, and supplies. Using tools like a free mileage calculator and mileage log will help ensure you deduct every penny you’re entitled to in your tax return.
If you are interested in learning more about the 1099-MISC form, see our Ultimate Breakdown to the 1099-MISC Form.
The 1099-B form is usually sent by a stock broker and summarizes the profit or loss you received from buying or selling stock.
This form shows taxable interest you earned through bank accounts, certificates of deposits, or savings bonds. You will receive one form for each account that earned more than $10 in interest during the year.
The 1099-DIV form shows the capital gains and dividends you received from investments. You will receive this form for any distributions over $10, even if you chose to reinvest them.
If you received more than $10 in distributions from a retirement plan or disability or life insurance policy, you will receive a 1099-R. This also includes pension plans, annuities, and profit-sharing plans.
The 1099-G form reflects any unemployment insurance collected during the year. If you received unemployment, this form will state how much you collected.
If a creditor or lender decides to forgive a debt you owe, you will receive a 1099-C form. Discharged debts generally qualify as income and have to be reported on your taxes.
Homeowners with mortgages will receive the 1098 form to show how much they paid in interest on their loan. Lenders send out this information if the interest amount is more than $600 for the year.
Students enrolled in higher education will receive a 1098-T from their college or university that shows how much they paid in education-related costs. This information is essential for taxpayers who qualify for the American Opportunity Tax Credit, the Lifetime Learning Credit, or other education-related tax breaks.
The 1098-E form summarizes the amount of interest paid on student loans during the year for amounts over $600. Depending on their income level, many taxpayers can deduct student loan interest, origination fees, and capitalized interest.
Regardless of whether you file your taxes on a 1040 or 1040EZ form and mail them in, file taxes online, or file with a professional tax preparer — by determining which of these federal tax forms you should receive and making sure you have them organized before you do your taxes — you’ll be able to file your return more easily and quickly.
BONUS TIP: Once you receive all the necessary forms, you can use a free tax calculator to estimate either your tax refund or how much you’ll owe the IRS so you’re not surprised at tax time.
Have a question? Contact Robert Hartman. Your comments are always welcome!