As tax season heats up, your mailbox will be flooded with tax-related forms. While many have familiar names and numbers, a slew of new schedules was introduced in recent years. Each has a particular purpose and carries information critical to completing your tax return.
Here are this year’s most important tax forms, including how to figure out which are best for you. For more help, check out our complete tax filing guide.
You might think of this as the grandfather of tax forms; many of the other forms and schedules are tied to it. For example, the amount in Box 1 of Form W-2 is reported on Form 1040, Line 1.
Form 1040 is a summary of your income, adjustments, deductions, taxes, and credits for the tax year, which, for most individuals, is the calendar year. You must file relevant supporting forms and schedules with Form 1040.
Form 1040 was redesigned for the 2018 tax year to be the so-called “postcard-size” tax return. Then it was redesigned again for 2019. The new 1040 isn’t postcard-size, but it is smaller than before. But is it simpler? No so much. The redesign didn’t really make preparing a tax return any easier; it just moved much of the information that used to be on Form 1040 onto six new numbered schedules.
There’s another change that might affect people with simple tax returns. Starting in 2018, there is no longer a Form 1040A or Form 1040EZ – the pared-down versions of Form 1040 formerly available to people who don’t claim a lot of tax breaks. Now, the majority of taxpayers will use the redesigned Form 1040.
Starting in 2019, there is a new form for seniors: Form 1040-SR. This form is only for taxpayers age 65 or older. It’s essentially the same as Form 1040, but it uses a larger font and includes a chart to help the taxpayer calculate their standard deduction.
For more information, check out our complete Form 1040 guide.
Another version of Form 1040 is Form 1040X, which you can file when you need to amend a previously filed return. This form cannot be e-filed and must be mailed with a copy of your 1040 return marked “As Amended,” any schedules that changed, and any new tax documents that show federal withholding.
Employers use Form W-2 to report wages and salaries as well as federal and state income tax, Social Security, and Medicare taxes withheld during the year. Copies of this form are sent to the employee, the Social Security Administration, the IRS, and the employee’s state, city, or local tax department.
Other information commonly reported on Form W-2 includes voluntary contributions to a retirement plan, the amount the employer paid for the employee’s health insurance, and employer contributions to the employee’s Health Savings Account (HSA) – all of which appear in Box 12 with specific codes. Box 10 records employer-provided dependent care benefits. The most common entry in Box 13 is a check in the box labeled “Retirement Plan.”
For more details, check out our complete Form W-2 guide.
This form is used to report winnings over certain amounts from gambling activities such as bingo, slot machines, keno, poker, lotteries and sweepstakes, and racing. Report these winnings on Line 21 of Schedule 1 attached to your Form 1040.
This form is the Employee’s Withholding Allowance Certificate. When you first begin working for an employer, you fill out Form W-4 to let your employer know how much income tax to withhold from your paycheck, based on your filing status and the number of qualified dependents you claim on your return. If your situation changes later – for example, you get married or have a baby – you can fill out a new W-4 to have more or less tax withheld from your paycheck.
Generally speaking, the more allowances you claim, the less income tax is withheld. When you file your return, you’re reconciling the tax you owe on your income with the tax you’ve prepaid through withholding. Ideally, you want tax owed and tax withheld to be about the same.
For more details, check out our complete Form W-4 guide.
There are many 1099 forms, each ending in a letter or letters indicating its particular purpose. These forms typically report various kinds of income. We’ve included the most common ones below. For more details, check out our complete Form 1099 guide.
Form 1099-B reports stock or bond transactions in a brokerage account. The transactions usually result in a gain or loss, which is reported on Schedule D with the net gain or loss reported on Schedule 1, Line 13.
Form 1099-C reports canceled debt that may have to be reported as income on your tax return. This can include mortgage debt forgiven through a mortgage restructuring or foreclosure, or settlement of a credit card or other loan balance for less than the balance owed. The taxable portion of this income is reported on Schedule 1, Line 21.
Form 1099-DIV reports dividends earned, most commonly from a brokerage account but also from stock owned directly in a company. Dividends should be reported on Schedule B and the totals transferred to Form 1040, Line 3a (total dividends) and Line 3b (qualified dividends).
Qualified dividends are stated separately on the return because they’re taxed at capital gains rates, which are lower than the tax rates for ordinary income, such as wages.
Form 1099-INT reports interest earned from banks, credit unions, or brokerage accounts. This interest may also be reported on Schedule B and the total reported on Form 1040, Line 2a (taxable interest) or Line 2b (tax-exempt interest).
Form 1099-G reports certain government payments, such as a state tax refund or unemployment compensation. These amounts are reported on Schedule 1, Lines 1 or 7.
Form 1099-MISC reports several types of miscellaneous income, the most common being non-employee compensation (Box 7) for amounts greater than $600 paid to independent contractors. It’s also used for reporting rent and royalty income, prizes and awards, medical and health care payments, crop insurance proceeds, payments to attorneys, and more.
Form 1099-R reports pension or annuity income and distributions from an IRA. These are the same amounts you enter on Form 1040, Lines 4a, 4b, 4c, and 4d. Lines 4a and 4c include the total amount of distributions, and Lines 4b and 4d are the taxable amounts.
The total distribution and taxable portion may differ because of rollovers, qualified distributions from a Roth IRA, qualified charitable distributions, or contributions made with post-tax dollars.
Form 1099-Q reports distributions from qualified tuition programs, such as 529 plans and Coverdell Education Savings Accounts. If all of your distributions from these accounts were tax-free, meaning you used them for qualified education expenses, you don’t need to report the amount anywhere on your return. Just be sure to keep good records showing how you used the funds in case the IRS decides to audit your return.
If all or a portion of the distribution is taxable, you’ll use Form 1099-Q to calculate the taxable portion and any applicable penalty and enter this information on Form 5329.
Form 1099-S reports proceeds from the sale or exchange of real estate. This is another scenario where capital gains may be involved. Whether the gain is taxable depends on the circumstances pertinent to the sale.
Form 1099-SA reports distributions from health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Medicare Advantage Medical Savings Accounts (MA MSAs).
For distributions from an HSA, you’ll report the total on Form 8889 with any taxable amount reported on Schedule 1, Line 8. Distributions from Archer MSAs and MA MSAs are reported on Form 8853. The taxable portion also gets reported on Line 8 of Schedule 1.
Form SSA-1099 reports income from Social Security. The total amount and taxable amount are reported on Lines 5a and 5b of Form 1040. Line 5a is the total amount of Social Security benefits paid, and Line 5b is the taxable amount.
Other forms are related to adjustments or deductions on Form 1040, Schedule 1 (Adjustments to Income) or Schedule A (itemized deductions). We’ve included the most common ones below. For more details, check out our complete Form 1098 guide.
Form 1098, Mortgage Interest Statement, reports the amount of interest paid to the mortgage holder on real estate – typically the taxpayer’s home – as well as any points paid on the purchase and mortgage insurance premiums. If your mortgage payments include property taxes, that amount may be reported on Form 1098 as well. If it doesn’t appear on the form itself, it may be included in the transaction detail that’s frequently included with Form 1098.
If you itemize deductions, you’ll report the amounts from Form 1098 on Schedule A. Real estate taxes go on Line 5b of Schedule A; mortgage interest and points go on Line 8a.
As for mortgage insurance premiums, they are currently not deductible. The last year in which the mortgage insurance premium deduction applied was 2017. Your lender may include mortgage insurance premiums on your Form 1098, but you won’t use it on your return.
Form 1098-E, Student Loan Interest Statement, reports the amount of student loan interest the recipient paid during the year. If the student has loans from more than one source, they may receive a 1098-E from each one. Student loan interest paid is an above-the-line deduction reported on Schedule 1, which lowers adjusted gross income up to a maximum of $2,500 per return.
Bear in mind that the person legally responsible for the student loan debt may take the student loan interest deduction, not necessarily the person who pays for it. So if a student’s benevolent uncle is making payments on their student loan, but the student is legally responsible for the debt, the student gets the deduction, not the uncle.
Form 1098-T is a Tuition Statement. It records the amount of tuition and fees received or billed by a qualifying educational institution, scholarships or grants the student received, whether the student is attending at least half-time, and whether they’re doing graduate work.
This form is essential for claiming tax credits for education, including the American Opportunity Tax Credit and the Lifetime Learning Tax Credit.
Forms 1095-A, B, and C
These three forms deal with health coverage.
The Health Insurance Marketplace sends you Form 1095-A if you purchased your health insurance through it. It indicates who in the household was covered and for how long. It also indicates whether the taxpayer qualifies for the premium tax credit and if a portion of that was paid in advance to reduce the monthly health coverage premium due.
If you receive a Form 1095-A, and the advance premium tax credit was paid, you must file a return to reconcile the advance credit you received, even if you would not have to file taxes otherwise. The reconciliation is done on Form 8962 and may result in you having to repay a portion of the credit (which goes on Line 2 of Schedule 2) or in an additional credit being paid to you (Line 9 of Schedule 3).
Form 1095-B comes from your health coverage provider and indicates who in the household is covered and for how long.
Last year, you may have received Form 1095-C from your employer, indicating who in your family was covered by the employer’s health coverage and for how long. Form 1095-C was discontinued in 2019 since the Tax Cuts and Jobs Act of 2017 eliminated the tax penalty for not having health insurance coverage starting January 1, 2019. As a result, the IRS no longer needs proof that you had coverage.
With the blizzard of tax forms you’ll receive and need to complete this year, you might be feeling anxious or uncertain about how all of these forms fit together. Online tax preparation software from H&R Block or TurboTax will walk you through the questions and data entry needed to complete your return.
Before you get started, take a few minutes to review the forms you receive and categorize them according to those related to income, adjustments, deductions, and credits. A little advanced preparation and organization will help you manage the paperwork and start to gain the upper hand at tax time. And don’t forget to see our complete tax filing guide for more help.
Do you face an onslaught of forms at tax time? How do you keep them all organized?