There’s that feeling in the back of your head that you forgot about something. Suddenly, you remember… it’s tax season!
A lot of people don’t enjoy doing their taxes, but it doesn’t have to be terribly difficult.
One of the most important things to make sure you are doing correctly is choosing the proper form for filing your taxes.
If you’d like to find out more about the IRS tax forms and figuring out which IRS form to use, keep reading to see what you may be able to learn.
Why Are Forms Needed For Taxes?
The most basic reason that IRS forms are necessary is to be sure that the right paperwork goes to the right person. If everyone just sent in their tax information without using these forms, can you imagine how confusing that would be?
Forms help us figure out what information we need to provide, what paperwork we will need to be able to file, and how to do each step of the process correctly.
For most types of tax returns, you need to make sure you have the proper documentation. For instance, you likely will need:
- W-2 for each job you’ve had in the past calendar year
- 1099 or W9 forms if you received income other than from an employer
- 1098 forms for claiming an interest deduction
- Forms for other tax credits you qualify for
The above information should be sent to you by January 31st before taxes are due, so you should have plenty of time to receive and review these documents before it’s time to file. You also may receive other documents that you need to keep for tax time!
Types of Forms Available
As stated previously, there are a lot of forms out there that may be what you need to file your IRS taxes, but not all of them are right for you.
Plenty of people file their taxes online in today’s age of technology, but you don’t have to do it this way if you don’t want to! Paper and pen is still perfectly fine in the eyes of the IRS as long as it is done correctly.
As of 2018, many of the tax forms have changed. You may find that you aren’t using the same type of form you used before, but that’s okay if things are a little bit different now.
The 1040 form is the most common form for individual income tax filers, but it has some new updates you need to be aware of.
Which 1040 Form to Use
There are three basic types of 1040 forms that you may want to use for your taxes. The one that is right for you is going to be based on a few factors.
For instance, when using the 1040 Schedule 4 form, your taxable income should be over $100,000 or you should be claiming itemized deductions. Other reasons to use this form may be that you have self-employment income or you have income to report after selling a property.
Another example is if you want to use the 1040 Schedule 1 form, you can’t have an income of more than $100,000, you have capital gains distributions to report, or IRA contributions/student loan interest require claim adjustments. You may also use this form if you claim certain tax credits.
When you are questioning which 1040 form is the right one for you, consult the IRS website to find out about the different schedules system. It can be confusing, so be sure that you are asking questions if you are conflicted about the form you should be using!
What to Know About Recent Changes
Whenever the IRS makes changes to their forms, it is important to make sure that you know how that may impact how you will file in the future. Discuss these changes with a CPA as well if you need more clarification.
One thing to look at is your paystub and how much is under the ‘withholding’ section. The new law affects how much income tax can be withheld based on allowances you claim and the total income amount.
Previously, it may have made more sense for people to withhold less in specific situations, but this is not necessarily going to be true for the same people anymore.
Another thing to consider is that the standard deduction has been increased, but the itemized deductions have been decreased. For instance, there is now a $10,000 limit on the amount of state or local taxes that you are able to claim.
Third, if you have had investment fees in the past, know that you cannot deduct them any longer. Consider using other money to pay the extra fees if you happen to have an IRA or another account that is getting larger quickly.
Start Filing Before the Deadline
Now that you have a little more information about which IRS form to use when you file your taxes, you may be interested in learning more about how all of the tax information works.
Taxes can be tricky, but don’t be afraid to ask for help if you need it. A CPA has the knowledge and experience you need to get some extra assistance with taxes or other financial need.
If you need some extra help with your taxes during the next tax season, a CPA can be the right person to turn to. Feel free to contact us to get some more assistance with any of your financial or tax related concerns in the future!
