What are Income Tax Forms?
Income tax forms are the official government documents you're required to fill out when you pay your taxes. Generally, the more complex your finances are the more tax forms you may need to fill out. The most common tax forms used are the IRS Form 1040, 1040A and 1040EZ for reporting and paying federal income taxes. Each state and city also creates their own tax forms, but oftentimes they are modeled after the federal ones.
Most taxpayers fill out Form 1040, 1040A or 1040EZ to report their taxable income to the IRS each year. Anyone can choose to file a Form 1040. However, if your income is less than $100,000, you are taking the standard deduction and you aren't claiming any dependents, you may be eligible to use the simpler Form 1040EZ.
Alternatively, you can choose to prepare a Form 1040A, which is also shorter than the Form 1040, but the only deductions you can claim are for student loan interest and IRA contributions; itemizing deductions is not permitted on this form. Regardless of the form you choose, you must fully report your income and deductions on one of them.
The IRS may require you to fill out additional forms depending on your particular financial circumstances. If you operate a business as a sole proprietor, you must attach a Schedule C to separately report your business earnings and deductions. You may also need to fill out a Schedule E to report your profit or loss from rental properties and a Schedule D to report capital gains or losses from the sale of capital assets, such as your stocks and other investments.
If you're working as an employee, your employer is required to send you a W-2 form by the end of January in following the tax year. The W-2 reports the amount of income you made and how much the employer withheld from your paycheck for taxes.This will help you determine whether you need to write the IRS a check when you mail in your Form 1040, or if you should start thinking about how to spend your refund.
Independent contractors generally receive a 1099 form from their clients, which also provides reports annual earnings, but does not usually include any tax withholding.
The days of waiting for the IRS to mail you the tax forms you need to complete your return are long gone. Now it's possible to access your forms and to complete your entire tax return on your computer using sophisticated income tax software. For example, TurboTax offers user-friendly software that allows you to quickly prepare your tax returns. The software can even e-file your return which reduces the amount of time you have to wait to receive your refund.