Common Tax Forms Explained

Overview

With the approaching tax deadline, taxpayers may be unsure of which forms they must complete. Your tax forms depend on your tax liability. You need to complete certain forms if you are eligible for certain deductions, and you need to fill out other forms if you make a certain amount of income. Some forms are short, and some forms are longer. Some forms require you to complete a schedule, and other forms are more basic and straightforward.

All the forms that you need are available through the Internal Revenue Service (IRS) website. For convenience, the IRS organizes forms by publication number, instruction number, topical index, and tax products. A tax consultant or certified public accountant (CPA) can help you find and complete the forms that you need. Forms are available in PDF format online.

The most common tax season forms include Form W-9, Form W-4, Form W-2, Form 1098, Form 1040, and Form 5405. Many People will fill out different forms in these series according to their unique needs. Each of these forms comes with a set of instructions.

W Series

These forms are part of the wage and earnings series. Employers use these forms to keep records of how much employees earn and how much is withheld from paychecks.

• W-2: Employers must complete a W-2 form for each employee that receives compensation for employment. Employees that work in multiple states must have a W-2 form for each state. The employer submits a copy of the W-2 form to the employee, Social Security Administration, and local tax agency. Companies must complete and send W-2 forms by January 31.
• W-4: The IRS uses Form W-4 to calculate tax withholdings from employee wages. To some extent, employees can control how much the IRS withholds. If taxes are under-withheld taxes may be subject to penalty interest fees. Employees can also request that the employer withholds additional amounts.
• W-9: Employers collect this form to maintain records of payees, employees, and independent contractors. The information on this form never goes to the IRS. Information from Form W-9 may be necessary for Form 1096 or Form 1099.

1040 Series

The 1040 series forms are also known as the individual income tax return forms. Each year, taxpayers must complete a version of the 1040 series forms when filing their returns. Taxpayers who do not have itemized deductions, capital gains, or losses can complete the simplified 1040A form. The 1040EZ form is a simpler version of the 1040A form. These forms require taxpayers to report their dependents, income, and income adjustments. Taxpayers should also be prepared to report withholding amounts, taxes paid, and itemized deductions. This information will help the IRS and taxpayers determine whether they owe additional taxes or are eligible for a refund. In most situations, Form W-2 needs to be attached to Form 1040.

Along with Form 1040, taxpayers may need to complete one or more of 11 schedules.

• Schedule A is where taxpayers itemize deductions. Instead of completing Schedule A, taxpayers may decide to take the standard deduction.
• Schedule B is where taxpayers must report interest income in excess of $1,500.
• Schedule C documents income and expenses from self-employment. Sole proprietors must fill this form. Form C-EX is available to taxpayers who have simple self-employment circumstances.
• Schedule D requires taxpayers to document capital gains and losses and to calculate taxes due to reduced rates for capital gains.
• Schedule E documents income and expenses from rental of real property or royalties.
• Schedule EIC helps a taxpayer determine eligibility for the Earned Income Credit.
• Schedule F documents farming expenses.
• Schedule H reports taxes that result from household help.
• Schedule J is available for averaging farm income.
• Schedule R is available to determine credits for elderly or disabled taxpayers or dependents.
• Schedule SE helps calculate the self-employment tax.

Form 1098 Series

The Form 1098 series is for taxpayers to report interest payments for mortgage and student loans. The form is also used to report tuition statements and motor vehicle donations.

Form 5405

This is the form used for claiming the first time home buyer tax credit. The form is available with instructions on the IRS website, and in most locations, taxpayers can file this form online.