Well, have no fear, we are here to clarify the mess of numbers and letters that make up common tax form names! You too can appear confident and knowledgeable when told to gather documents for your Schedule A. “Why of course! I will get all my documents together for my itemized deductions right away.”
(As a note, all names below are linked to the actual form; click on it to see the form.)
- W-2–a statement telling year-in-total payroll information. Employers give them to employees shortly after year-end so they can correctly report the information–including wages and tips, taxes withheld, retirement contributions–on their taxes.
- W-4–a form employees fill out for their employer giving information such as total dependents and number of wage earners in the household. It is a way to estimate what the employee will owe in taxes at the end of the year so that it can be withheld from paychecks equally throughout the year.
- 1040—the individual tax return that every income earner in the US must file by April 15 every year. In essence you use it to report your financial position to the IRS and figure what you owe in taxes.
- Schedule A–a part (or schedule, as they are called) of the 1040. Schedule A is where you list all of your itemized deductions such as mortgage interest, charitable contributions, medical and dental expenses, taxes paid, and any other of the allowed deductions.
- Schedule B–part of the 1040. It’s where you list your interest and dividends received (usually from banks) so you can pay taxes on them.
- Schedule C–the part of the 1040 where you report net income from a small business. If you have a small business–a sole proprietorship or a 1 member LLC–your year’s financial information will go here to calculate what you owe in self employment taxes (in addition to income taxes).
- Schedule D–part of the 1040 where you report what is called capital gains and losses. Most commonly they are stocks and investment gains or losses when sold. Your financial institution will usually give you a form with that information.
- Schedule E–part of the 1040 where you report income and expenses from rental properties you own. It is also where you list losses or gains from partnerships, LLCs, or S corps you are part of. It is also where you report income received from any estates or trusts.
- K-1–if you are a partner of a partnership or S corp, or a member of a LLC, the company will give you a K-1 shortly after year-end. It gives your share of the company net income (and other miscellaneous numbers) that you must report on your 1040 and pay taxes on.
- 1099–there are several different forms of 1099s: 1099-MISC, 1099-INT, 1099-G, and the list goes on. These forms are issued by payers to both the IRS and the payee. It shows paid income that falls in a category other than wage income. They are entered in the payee’s 1040.
- 1065–the informational return filed by partnerships and LLCs taxed as partnerships (the taxes are paid by partners/members).
- 1120–the tax return filed by corporations.
- 1120S–the informational return filed by S corporations and LLCs taxed as S corporations (the taxes are paid by partners/members).
- 990–the informational return filed by non profits and charitable organizations and foundations.
- 941–employers with wage employees much file this report every quarter stating wages paid to figure employment taxes owed.