While we're waiting for the Internal Revenue Service to finish updating its forms, we filers can go ahead and get the other documents we need to file in order.
Yep, I'm talking about gathering up all those tax-related statements that have been filtering into your snail mail or email boxes. Information on these exciting pieces of necessary filing paper is today's Daily Tax Tip.
You'll need that documentation to fill out your Form 1040.
Employers, clients, vendors and anyone else with whom you had a taxable transaction last year has until Jan. 31 to get the forms in the mail to you, but most arrive earlier, especially if you've gone paperless.
Here are some key tax statements you should soon have in hand.
Wage earners be on the lookout for W-2 forms. You should get one from each employer.
Other income,
such as a state tax refund or unemployment benefits are reported to you
on Form 1099-G.
Prize winnings, both on cash payouts or value of
property won, is reported to you via Form W-2G.
And if you had a credit card or other debt canceled, remember that in most instances that forgiven debt amount counts as taxable income. In such a case, you'll get a Form 1099-C showing the amount of canceled debt upon which you owe taxes.
Business income is generally reported on 1099-MISC forms. You'll get these if you're self-employed, an independent contractor or small business owner working different jobs.
You should get a 1099-MISC
from each client who paid you $600 or more. Remember, the $600 is
the amount that triggers the issuance of the 1099. If you made less than that on a job last year, you
might not get a 1099-MISC but you still are required by law to report the income.
Investors will get several different forms.
The 1099-INT
reports interest income in excess of $10. With interest rates so low
right now — thanks for nothing (literally!) Ben Bernanke! — you might get fewer of these this filing season.
Form 1099-DIV reports dividend income. Note box 1b for qualified dividends, which are taxed at the lower capital gains rates. Capital gain distributions also are reported on this form.
And if you used a broker to handle your trades, then you'll also get a 1099-B.
Real property owners also get a lot tax documents this time of year.
Mortgage interest and any points you paid to get a lower rate on your home loan will be on Form 1098.
If you made money on a real estate transaction, you should get a 1099-S.
And there is, of course, your statement from your county property tax collector detailing how much you paid. If your property tax bill is paid by your mortgage holder on your behalf, that tax information will be on the mortgage interest statement you receive from your lender.
Students are awaiting Form 1098-T listing tuition payments and Form 1098-E showing how much student loan interest was paid last year.
Retirees who are receiving IRA or other retirement plan payments will get Form 1099-R. If they're getting Social Security benefits, too, the amount received last year will be reported by the Social Security Administration on Form SSA-1099.
These are just the more common forms that taxpayers receive. You can check out even more possible pieces of tax paper you might get in my tax paper chase post.
Note that while the forms mentioned and linked to here are the official IRS versions, you might get a different looking document. That's OK. The IRS gives companies leeway to use statements that fit their software and system. Just look for the identification of it as a "substitute 1099" etc.
Be sure to check the statements as soon as they arrive. If you find a discrepancy against your own records, call the payor and ask for an explanation. If your numbers are correct, ask that you and the IRS get a correct statement. Catching a mistake early means you have enough time to straighten it out before you must file your return.
And remember, check your email box. If you signed up to receive notices electronically instead of via the U.S. Postal Service, you'll be getting a message telling you where to go to download the tax documents you need to fill in your 1040.
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