5 Most Commonly Used IRS Tax Forms You Need to Know About

It is that time of the year again when we all need to sit down with our financial statements and file taxes. Because of the honest tax-paying citizens like us, our country can maintain its might and have been able to uphold democracy for centuries now. However, the will to file taxes often gets diminished by the complexity of it. The IRS has over 1,000 forms and it often gets confusing to understand which specific ones are meant for you and which you can safely ignore.

Fortunately, as an average citizen holding a standard job or running your own business, you only need to bother about a few commonly used IRS tax forms. The rest you can assume are not meant for you.

1. The US Individual Tax Return Form 1040

As a citizen of the United States eligible to pay taxes, this is the first form you will need to fill up and send to the IRS. Before 2018, this Form had two types – 1040EZ and 1040A. Post-2018, the IRS merged these two forms into a newly designed Form 1040. You fill out your basic information in Form 1040 like age, filing status, and gross income. In the event that you are eligible for a tax refund, this is the Form you use to get started.

2. Common attachments to Form 1040

Along with Form 1040, the IRS requires the taxpayers to file attachments depending on what they wish to report and inform the tax authorities. The most common Form 1040 attachments include:

● Schedule A for itemized deductions where you include expenses that are not taxable. For example, the IRS does not tax your mortgage payments or charitable donations and you show these expenses in the Schedule A attachment.
● Schedule B is for reporting interest payments received from banks or dividends paid to you in some form by any entity.
● Schedule C is your self-employed business people to report gross profit or loss.
● With Schedule D, you report the capital gain or loss made on stock sales.
● And Schedule SE is for calculating self-employment taxes.

3. Interest Income Form 1099-INT

You must not confuse the Interest Income Form 1099-INT with the Schedule B attachment of Form 1040. If you received interest payments from a bank or dividends from any company, you need to prepare and submit both Form 1099-INT and Schedule B. The difference is that the Form 1099-INT is sent to you by the bank or the company paying you the interest or dividend while Schedule B is something you download and attach. With Form 1099-INT, you report your interest/dividend payments while with Schedule B, you ask the IRS to tax your interest income only if it is greater than $1,500.

4. Wage and Tax Statement Form W2

Although you do need to send this form to the IRS along with your basic tax forms, you need to know what the W2 form is and what is it used for. If you hold full-time employment with any company, your employer holds back a certain amount from your paycheck as a tax payment. You tell the employer how much you wish to pay every month through a W4 Form. At the end of every calendar year, your employer sends a W2 Form to the IRS to inform this monthly tax payment and sends you a copy of the same that shows how much tax you have already paid. Since your employer already sent the W2 Form to the IRS, you do not need to send the Form again.

5. Miscellaneous Income Form 1099-MISC

This form is solely meant for self-employed taxpayers who might receive extra payments on top of their gross income. If you are working as a freelancer or an independent contractor, the 1099-MISC Form is for you. The IRS wants to know if you received cash payments as prizes, awards, bonuses, or commissions, and you use the Form 1099-MISC to inform the tax authority about your extra income.

Fill your IRS Forms right and you can claim a tax refund by claiming the right tax credits and deductibles. And the refund presents itself as quick cash that you can spend almost anywhere. One option is to pay down for used cars in Greenville. You can use a considerable sum of your tax refund money to finance a quality used car and own a vehicle without denting your savings.

At Family Auto buy here pay here in Greenville, you can get started with bad credit financing with just $500 down. Your tax refund money should be enough to cover the down payment and other expenses that you might have. Additionally, you get a comprehensive 2 years/36,000 miles warranty at Family Auto along with flexible credit plans and more.