Wednesday, September 28, 2011

Federal Tax Forms

Before you start to prepare your taxes, you have to know which federal tax form to fill. The IRS has about 30 different tax forms for different types of taxpayers, and you have to use the one that is most appropriate for your tax situation. Tax forms may be updated from time to time, and it is essential that you obtain the latest forms when you are filing your tax returns. Here are some of the most commonly used federal tax forms:

1040 Series

Forms in the 1040 Series are used for filing personal federal income tax returns, and they consist of Form 1040 as well as other variants, including Form 1040A, Form 1040EZ, Form 1040NR, Form 1040NR-EZ, and Form 1040X. Form 1040 is also called the “long form”, and it can be used by any full-time income individual taxpayer in the United States. If you have an uncomplicated tax situation, without itemized deductions or capital gain or loss, you can make your tax preparation process easier by using tax Form 1040A or Federal Tax Form 1040EZ, which are also known as the “short form” and the “easy form” respectively. Form 1040NR and its simpler version, Form 1040NR-EZ, are meant for nonresident aliens who are earning income in the US. If you have made errors in any Form 1040, Form 1040A, or Form 1040EZ that you had submitted, you can rectify the errors by completing Form 1040X.

If you are in a business partnership, you should use Form 1065 to file your tax returns.

Form 1098 is also known as the “mortgage interest statement”, and it is used for reporting interest that you have paid on your mortgage. You are entitled to claim deduction for this kind of interest at the federal level, provided that you are not subject to alternative minimum tax.

1099 Series

The 1099 series of tax forms include Federal Tax Form 1099, as well as more than 20 variants. If you have earned other types of income besides salaries, wages, and tips, you have to report such earnings using one of the forms in the 1099 series. The variants of Form 1099 are used for reporting specific types of income, which can range from dividends to income from real estate transactions.

W Series

There are four different types of forms in the W Series, and they include Form W-2, Form W-4, Form W-8BEN, and Form W-9. Form W-2 is also referred to as the “wage and tax statement”, and its purpose is to facilitate the reporting of wages paid to employees as well as the taxes that are withheld from them. On the other hand, Form W-4 is a form that employers use to determine the right amount of withholding to deduct from their employees’ wages. If you are a foreigner, you have to use Form W-8BEN to certify that you are a non-resident alien, so that you can avoid or reduce withholding from income earned in the US. Form W-9 is used by a third-party to report payments made to others and help those who receive the payments to avoid backup withholding.

No comments:

Post a Comment