A sight of all those IRS forms makes us feel confused as to which form we should use most of the time. The Internal Revenue Services is pretty strict with filing tax forms. If you have no proper experience in filing IRS tax forms, this can come as a great challenge. To help you out, we have listed some of the most important income tax forms and how you can properly accomplish them.
Learn How to Fill Out IRS Forms
1. Individual Income Tax Return (IRS Form 1040)
Filing an individual federal income tax return requires you to use either IRS forms 1040, 1040a, or 1040EZ. If you choose to file using the simplest form, you should fill out the 1040EZ. Filing with this form means you only take the standard deductions without itemizing your deductions. Additionally, this form eliminates any claim or adjustments to income or tax credits.
On the other hand, filing using the form 1040a lets you claim more deductions but not as much as when using a form 1040. However, using form 1040a allows you to fill out your federal income tax return quicker. The income and adjusted gross income sections are made shorter. In choosing which form to fill out, you need to meet certain qualifications for each of the three forms.
2. Employer’s Quarterly Federal Tax Return (IRS Form 941)
All employers must file a quarterly report of their revenue together with the social security tax and any Medicare taxes they pay on behalf of their employees. This is done through IRS form 941. This report is basically what the IRS uses to verify the details filed under form 1040.
3. Miscellaneous Income (IRS Form 1099)
IRS Form 1099 is used to report income other than your salaries, wages, and tips. If you have freelance works, sub-contractor gigs, rental income, or won any prizes, these should go on this specific form. This form is also used when an individual has made a direct sale of at least $5000 to any non-retail business.
4. Wage and Tax Statement (IRS Form W-2)
All employers who pay wages of $600 or more during a financial year needs to file form W-2 at the end of the year. This means that if you are employed, this is accomplished by your employer for you. However, if you are acting as a consultant or a freelancer, the employer gives you a form 1099 which you should personally file at the IRS together with your other income tax forms.
5. Employee’s Withholding Allowance Certificate (IRS Form W-4)
When starting a new job, one of the first things your employer asks you to accomplish is the Employee’s Withholding Allowance Certificate or the W-4. This form contains information such as your name, address, and social security number. The main reason for filing this form is so your employer can withhold taxes from your paycheck. Another important reason is to allow your employer to determine the allowances you can claim. With this information, it becomes easier for your employer to withhold and remit necessary taxes to minimize the possibility of paying extra taxes at the end of the year.
6. Application for IRS Individual Taxpayer Identification Number (IRS Form W-7)
Employees file Form W-7 to apply for or renew their Individual Taxpayer Identification Number or ITIN. It is basically a nine-digit code given to individuals required to pay tax.
7. Report Non-cash Charitable Contributions (IRS Form 8283)
Claiming as many deductions as you can enable you to pay lesser taxes. Did you know that you may claim non-cash charitable contributions aside from cash donations as an allowable deduction? Great, right? To report this deduction to IRS, you need to file IRS form 8283. Make sure the contribution you made is worth over $500 to qualify.
8. Power of Attorney and Declaration of Representative (IRS Form 2848)
In cases where you are not able to represent yourself in dealing with the IRS, you may appoint a representative. In doing so, you need to complete and file the IRS form 2848. By accomplishing this form, you agree that your representative will have all the powers you would have, including receiving confidential tax information.
9. Tax Extension (IRS Form 4868)
Filing taxes on time is important. However, cases of late filing are common and the IRS allows you to file for an extension under certain conditions. When you are not able to file your taxes on time, it is important to file form 4868 so you may not be subjected to paying fines and penalties.
10. Installment Agreement Request (IRS Form 9465)
One big challenge when paying taxes is not being able to settle them at once. That is why the IRS allows individuals to file an Installment Agreement Request through IRS form 9465. Although this is a considerable amount of help to individuals with great financial difficulty, they can only avail this agreement under certain circumstances. To find out more about this tax relief, read here.
11. Premium Tax Credit (IRS Form 8962)
If you are one of those individuals who own plans with Health Insurance Marketplace, then you may be qualified for a Premium Tax Credit (PTC). Filling out a PTC form can be confusing. To learn how you can properly accomplish this form, read here.
Making sure you properly fill out IRS forms is as important as meeting those deadlines. This will allow smoother and faster filing tax documentation with the IRS.
Do you encounter any difficulty in filling out any IRS forms? Share your experience with us in the comments section below.