Tax forms

At the end of each year, you should start planning about how you’re going to group all your tax forms and get started on preparing your tax return. If you’re unfamiliar with the system or have never filed taxes before, this can seem like a daunting step. But don’t worry, because we’ve put together a list of the most common tax forms you’ll have to deal with in the USA, when you’ll need them, and how you can sort them out without any hassle or confusion. Without further ado, let’s get right to it!

1. Form W-2

Form W-2, commonly known as the ‘Wage and Tax Statement’ form is usually given out by the employers to the employees at the end of each financial year. It shows your total earnings and income tax withholding for the entire year. This form is usually easy to fill because it’s simple and straightforward, without any jargon that makes it hard to understand by people who are just getting introduced to tax forms. All you have to do is enter the information that’s asked of you (which is usually available also on your payroll and personnel records) and also fill in some details about the business you’re working for. 

Just be sure to double-check all the spellings of the names and addresses, because rectifying spelling errors later can be a long and tedious process. Also, be sure to mention the exact name and address of your employer and workplace. If you still feel clueless and would like to know more about the form, check out this step-by-step guide which will tell you everything you need to know about filling in W-2 forms.

2. Form 1099-MISC

Commonly known as the ‘Miscellaneous Income’ form, this one applies to you if you’re a freelancer or if you work on a contract basis for other businesses. The IRS requires the businesses you work for to send you this form by the end of January, after which you’ll have to report all business income. Also, do remember that you’ll receive this form if you’ve been paid $600 or more by one client or one entity during the year. Apart from reporting other income in this form, you’ll also have to report rents and royalties. 

3. Form 1098-E

If you’re a student, or if you’ve been a student in the past, you’ve likely heard of this form and may already be familiar with it. Commonly known as the ‘Student Loan Interest Statement’ form, this form is used to show how much student loan interest you paid over the past year. Your student loan servicer or whoever you generally make payments to will send you a copy of this form, either via email or through postal if the interest you paid over the last year met or exceeded a total of $600. Additionally, do keep in mind that if you have more than one loan servicer, you’ll receive separate forms from each servicer. 

4. Form 1098-T

The ‘Tuition Statement’ form applies to you if you paid for post-secondary education in the past year. You will receive this form at the end of the year with a statement of all the tuition and other expenses you paid over the year. This statement is generally used to figure out the total education credits and also the tax credits and deductions you’re qualified to receive based on that. 

Summary

Here’s a quick summary of the most common forms and when you’ll need them:

  1. Form W-2: You’ll receive it at the end of the year where your total earning and income tax withholding for the entire year.
  2. Form 1099-MISC: This form applies to you if you’re a freelancer or work on a contract for another business.
  3. Form 1098-E: If you’re a student with a loan for education, it’ll depict how much interest you’ve paid over the last year.
  4. Form 1098-T: This form will apply to you if you’ve paid for post-secondary education in the last year, and will also depict the total education credits and tax deduction you’re qualified to receive. 

 

Authored by Claire Ward, Paradigm Digital