Each year we receive or fill out lots of tax forms, and each of these forms has a specific purpose.
Below, I’ll outline and highlight some of the most common forms. You can find more detailed information by clicking on the form’s name.
The most important of them all, the Form 1040 is the basic form on which you file your personal income taxes. There are many additional forms which you use to calculate specific items to put on specific lines on the main Form 1040, but you can’t file your taxes without this form. It comes in multiple flavors such as 1040EZ, 1040A, and 1040X. There are also more than a dozen Schedules (different parts to the Form), each to help you calculate the tax impact of different activities.
If you were employed as an employee, and had taxes withheld from your paycheck, you’ll receive a Form W-2 at the end of the year for each job. This form lists how much you were paid all year, how much was withheld in federal, state, and local taxes, and other information as well. All this information is also supplied to the IRS by the employer so that you can’t sneak anything by the IRS.
Each time you start a new job, a Form W-4 is in your pile of paperwork. This lets you tell your human resources department how much to withhold in taxes from your paycheck, based on your number of qualified dependents. If you’ve recently gotten married, divorced, had a baby, or had one leave the nest, you may want to update this form so you can get the extra money as soon as possible instead of waiting for tax season.
There are multiple kinds of Form 1098, but all of them are for tax deductions. Mortgage interest, student loan interest, and tuition are all reported on a Form 1098.
This form reports all kinds of income that don’t fit on another form. Independent contractors and lottery winners will both receive one of these. You’ll also get one for withdrawing money from a retirement account, having a debt canceled, or making a profit on a home sale. A 1099-MISC form is one such example of a form that will list some of these forms of income.