There are many forms from the IRS, and it is sometimes confusing what each document does. Below are some common tax forms and their uses.
1. Form 1040
You use this form to file individual federal income tax returns. You should fill out and file the form by April 15 unless the date falls on a weekend or a holiday, in which case, you should file by the next business day.
The form enables you to file for allowable deductions. They depend on age, filing status, or if you or your spouse is blind. You can choose a standard deduction or fill out Schedule A with specific details.
You use the form to declare your income from interest and dividends exceeding $1500 in a tax year. It also reports capital gains and losses. You also report your income and expenses from self-employment, rental property, and pass-through entities such as estates & trusts.
2. Forms 1095
They come in three categories: form 1095-A, 1095-B, and 1095-C. The form reports the health care coverage of individuals as per the guidelines of the Affordable Care Act tax.Â
If you have your insurance plan from the marketplace, you must fill out form 1095-A. The insurance provider will provide you with the form. You must file it with your other tax documents.
3. Form 1098
You use this form to report the interest you have been required to pay on your mortgage in a tax year. These interests can qualify as tax-deductible. You should always use a scannable copy while filing your returns to avoid fines.
4. Form W-2G
You must fill out this form if you make any money from gambling. The document reports any federal income tax withheld. How you report your winnings are based on the game you played, the amount you earned, and the odds of that win occurring.
5. Form 1099-MISC
You should use this form to report any miscellaneous income you have paid to anyone. File a different document for every individual.
Miscellaneous payments include;
- More than $10 royalties
- More than $600 in; rent, awards, medical, attorney fees, and notional principal contract.
You also use Form 1099-MISC to report any direct sales of consumer products outside a permanent retail establishment if the buyer intends to resell. The transaction should be more than $5000 to warrant reporting.
6. Form 1096
Use this form to transmit other documents, including Forms 1097, W-2G, 1099, 3921, 1098, and 3922.Â
You should only use form 1096 when transmitting a paper filling. The document is not applicable during an E-filling. You can learn more about this document by visiting https://blog.boomtax.com/essential-guide-form-1096/.
7. Form 8822
If you have moved, you must inform the IRS of your new address by filing Form 8822. Fill out and submit a new Form 8822 for each dependent for whom you need to update the mailing address because of this move.
Importance Of Tax Forms
The tax forms enable you to file your tax returns conveniently. You should always file your taxes correctly and within the IRS’s deadline.
