This primer will help you decode the alphabet soup of IRS forms and understand your tax return.
There are more than a thousand IRS tax forms for reporting various kinds of income, expenses and other financial data—and each piece of paperwork bears its own letter or number, which can seem as foreign as a new language. Fortunately, learning just a few key tax forms can give you much of the information you need to understand your tax return. Here’s a primer on some of the documents you’ll want to be familiar with as you use TurboTax to prepare your tax return.
Which tax forms to use?
The documents to start with are the 1040 and 1040-SR. For tax years prior to 2018, Forms 1040EZ and 1040A were available but have been phased out beginning with the 2018 tax year by a redesigned Form 1040 and a new 1040-SR for those 65 and older. The 1040 family of forms serves as the center of your tax return.
- Form 1040EZ (prior to tax year 2018) is the simplest version of this essential tax form. You generally can file it if you:
- Have no dependents
- Are younger than 65
- Earned less than $100,000
- Don’t plan to itemize your deductions
- Form 1040A (prior to tax year 2018) is more comprehensive than 1040EZ, but simpler than the regular 1040. It lets you make certain adjustments to your taxable income, such as child tax credits or the deduction for student-loan interest, but doesn’t let you itemize deductions. You typically can use this form if you earn less than $100,000 and don’t have self-employment income.
- Form 1040 for tax years prior to tax year 2018 applies if the other two tax forms don’t: for example, if you make $100,000 or more, have self-employment income or plan to itemize deductions. Beginning with the 2018 tax year, the redesigned Form 1040 will be used by most taxpayers. The 1040-SR is available as of the 2019 tax year.
Common tax form attachments
Depending on your situation, you may be required to file attachments to your return. According to the IRS the following attachments are the most common:
- Schedule A is for itemizing deductions, such as mortgage interest, property taxes, medical or dental expenses, and charitable contributions.
- Schedule B is the place to report taxable interest or ordinary dividends exceeding $1,500 (applies to taxable accounts only—you don’t have to report interest or dividends in tax-advantaged accounts such as IRAs and 529 plans). This is also where you report income from a seller-financed mortgage.
- Schedule C reports the profit or loss and any deductible expenses from a business you own.
- Schedule D is where you report capital gains and losses from stock sales or other transactions.
- Schedule SE calculates the self-employment tax.
What's in your mailbox?
From the IRS you should expect little or nothing. If you used TurboTax to file electronically last year, you’ll receive no tax forms by mail from the IRS. If you filed on paper, you’ll receive a postcard explaining your options for obtaining the forms. While you can pick them up at a post office or print them from www.irs.gov, TurboTax will ask simple questions and automatically fill in all of the appropriate tax forms you need to file your tax return.
However, you can expect to receive a number of forms reporting your income from your employer, bank or credit union, mutual fund companies and other entities you did business with throughout the year. The most common of these forms are:
- Form W-2. It’s filled out by your employer to document your earnings for the calendar year. This tax form supplies you with some of the most important information you’ll need when you fill out your 1040 including the wages you earned and the taxes your employer withheld.
- Form 1098. You’ll receive one of the three varieties of this form if you paid interest on a mortgage or student loan, paid college tuition or donated a motor vehicle to charity.
- Form 1099 series. This family of tax forms reports all income that isn’t salary, wages or tips. For example, you’ll receive a 1099 if you earned more than $600 from any one company while working as an independent contractor, consultant or freelancer within the tax year. There are several types of 1099 forms, including:
- 1099-DIV, which reports dividends, distributions, capital gains and federal income tax withheld from investment accounts, including mutual fund accounts.
- 1099-INT keeps track of interest income you earn on investments.
- 1099-OID (Original Issue Discount) is provided if you received more than the stated redemption price on maturing bonds.
- 1099-MISC documents self-employment earnings, as well as miscellaneous income such as royalties, commissions or rents. It covers all non-employee income that is not derived from investments.
Remember, no matter which IRS tax forms you need, TurboTax does the work of selecting and filling in the right forms—it can even import W-2 forms from more than 100,000 employers.F