What Forms Do I Need to File My Taxes?
Whether you file your taxes with an accountant or with tax software, you will need to have all the necessary forms organized and ready to go before you can complete the process. Both accountants and tax software can help remind you of the documents you need, but preparing ahead of time can make tax filing as quick and painless as possible.
The exact forms you need to file your taxes depend on your sources of income and other financial details, but the most common situations require some mix of a W-2, a 1099, and a 1098. Keep reading to learn about what these documents cover and whether they apply to you in tax year 2020.
Tax Form W-2 for Employed Earnings
Perhaps the most common form needed to do taxes is Form W-2, the "Wage and Tax Statement." This form shows the wages you've earned and the taxes you've paid over the last year. If you've earned at least $600 from an employed position, your employer is required to send a W-2 to you. Your employer is also required to send this form to you if it withheld any amount of income from you to pay taxes.
If you worked more than one job, you will need a W-2 form from each employer to do your taxes. However, W-2 forms only apply to employed positions. If you have worked as an independent contractor, you will not receive a W-2 for that work.
Form W-4 Ensures an Accurate W-2
To ensure that the federal income taxes withheld from each paycheck and that appear on your W-2 are correct, you will also need to fill out a Form W-4 every time you start a new job or when your personal or financial circumstances change. This should have been done well before tax time, but if you're unsure whether you filled yours out properly, you can contact your employer's human resources department and ask for clarification.
Form W-4 was redesigned for 2020 to eliminate exemptions. However, you do not need to provide your employer with a new form if you have already filled out a W-4 for them; they can continue to use the information from the old form to calculate your withholding.
Tax Form 1099 for Non-Employment Income
If you had an income situation that isn't covered by a W-2, then you will likely receive a 1099 form instead. What specific 1099 form you'll need to do your taxes depends on the type of income you received. There are several common types of 1099 tax forms, and they're labeled differently.
This form covers most working situations that aren't covered by a W-2. If you earned $600 or more as an independent contractor last year, then you will receive need a 1099-MISC to complete your taxes. This form also applies to other kinds of miscellaneous income, including $10 or more in royalties or broker payments (if you opted for broker payments instead of tax-exempt interest or dividends), and income of at least $5,000 in direct sales of consumer products outside of a retail establishment. Other types of income that require you to file the form include rent, prizes, and awards. This form will also address medical or health care payments that you made in the course of business.
As of 2020, form 1099-NEC is used for independent contractors who earned $600 or more. If the following four conditions are met, you must generally report a payment as NEC.
- You made the payment to someone who is not your employee.
- You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations).
- You made the payment to an individual, partnership, estate, or, in some cases, a corporation.
- You made payments to the payee of at least $600 during the year.
Individuals should "enter nonemployee compensation (NEC) of $600 or more, including:
- Awards for services performed as a nonemployee
- Other forms of compensation for services performed for your trade or business by an individual who is not your employee
- Oil and gas payments for a working interest, whether or not services are performed
- Expenses incurred for the use of an entertainment facility that you treat as compensation to a nonemployee
Federal executive agencies that make payments to vendors for services, including payments to corporations, must report the payments in this box.
Form 1099-DIV, "Dividends and Distributions," is required if you received dividends or distributions amounting to $10 or more. You would also be required to file the form if you paid or had withheld foreign tax or income tax on dividends under backup withholding rules or if you paid $600 or more for a liquidation.
Form 1099-INT, "Interest Income" covers interest payments of $10 or more, foreign tax withheld on interest, or income tax withheld under backup withholding rules.
You will need to file this 1099 if you received government payments such as unemployment compensation.
File this tax form if you made a withdrawal of $10 or more from an employer-sponsored retirement plan, Individual Retirement Arrangement (IRA), pension, life insurance policy, or charitable gift annuity.
Like how employees need to file a W-4 to receive a W-2, independent contractors may need to complete Form W-9, "Request for Taxpayer Identification Number and Certification." A W-9 will help ensure the accuracy of any 1099 forms you receive for independent contracting work.
1098 Tax Forms for Deductions or Credits
Forms W-2 and 1099 cover most common income situations, but many people also claim tax deductions and credits, especially regarding loan payments. If you plan on claiming a deduction because of the interest you paid on a loan, you will need to file one or more common types of 1098 forms.
If you paid mortgage interest on a home loan, you will need a Form 1098 from the mortgage holder. This form allows you to deduct any mortgage interest you paid in the last year, which then reduces your taxable income. You only need this form if you paid at least $600 in mortgage interest last year.
You may need this form if you have student loans or paid college tuition and want to deduct any student loan interest you've paid. As with mortgage payments, this form is only needed if you made at least $600 in student loan interest payments.
This form allows you to report any tuition payments you made so that you can take advantage of educational tax credits such as the American Opportunity Tax Credit (AOTC) or the Lifetime Learning Credit (LLC).
Less Common Tax Forms
Depending on your circumstances, you may need to file other schedules and forms along with the documents above. For example, if you own a business and need to report profits, losses, tax deductions, or credits from that business, you may need Schedule C of 1040. In order to claim the child care tax credit, you need to file Form 2441. Get acquainted with the common tax deductions and credits so that you know what forms you need to fill out to do your taxes and maximize your refund.
Make a list of firms from which you expect to receive tax forms so that you can cross the forms off as you receive them. If you work for multiple firms and can't easily keep track of where you earned income, make a master list of the organizations as you receive them this year; the list will likely be similar next year.
When Should You Expect to Receive These Forms?
Your employer or loan servicer is required to send you the W-2, 1099-MISC, or 1098 forms by January 31, so be sure to keep an eye on your mail after New Year's Day.
Compare the amounts in the forms to your own records or pay stubs. If there is an error, promptly contact the company and request a new form. The new form should say "corrected" somewhere on the document. It can take several days, at a minimum, to receive a corrected form, so check each one as soon as it arrives to ensure that you are ready to file taxes by April 15.