COMMON I.R.S TAX FORMS:
Whenever the end of financial year approaches, the tax -season begins, and the mailbox is flooded with tax-related forms. It's not uncommon to not remember every form that we are supposed to file and report to IRS, but understanding how every tax form is used and when they are to be filed keeps you safe from getting penalized.
Following are some of the most common and essential tax forms:
FORM 1040:
Also referred to as the tax forms of the tax forms, this form reports your income, deductions, adjustments, tax, credits for the tax year. Several other forms and schedules are tied to it. There are several simplified versions of this form: 1040X, 1040EZ, 1040A. This form cannot be e-filed and must be mailed with a copy of your 1040 return.
FORM W-2:
The wages and salaries, federal, state and local income tax, social security, and Medicare taxes withheld during the year are to be reported using the Form W-2. Other information reported on the Form W-2 are- your contribution to 401k, health savings account, medical savings account. The form is to be reported to the IRS as well as the employees.
FORM W-4:
It is the Employee Withholding Allowance certificate that you have to file before starting employment so that the employer is informed about the tax they have to withhold on the paycheck. The fewer exemptions claimed, the more income tax is withheld. If during the tax filing year, you got married or had a baby, you will have to file a new W-4 to change the number of exemptions you claim for withholding purposes. So that your employer will not withhold too much or too little.
FORM 8962:
Under the Affordable Care Act, one has to file the health care coverage they have bought. If you purchase your health insurance through the Health Insurance Marketplace, you might qualify for the premium tax credit, which you can claim by filling form 8962. Sections 6055 and 6056 have been added to the Internal Revenue Code with reporting requirements for employers subject to the ACA’s shared responsibility or “play or pay” mandate
FORM 1098:
When a recipient receives $600 or more in their mortgage interest, you will have to file form 1098 with the IRS or your bank will have to file a form 1098 and send you a copy. It also helps you be informed about how much you paid in insurance premium and points. With form 1098 you can verify the amount of mortgage interest you deduct on your tax return.
These are some of the standard IRS Tax forms but there are many tax forms to be filled every year, and one must know how and when to use the right one, else they might land in a costly mistake. Knowing more about the commonly used tax forms makes filing less intimidating and helps you take advantage of all the deductions you’re entitled to claim.
