The 15 Most Common Tax Forms in 2022 (+Infographics)
If you didn’t know, the IRS publishes over 800 forms and schedules –most of them are uncommon. However, the 15 below are the most relevant to the majority of taxpayers. If you understand most of them, you should feel comfortable filing your taxes.
1. Form 1040, U.S. Individual Income Tax Return
Form 1040 is the mother of all tax forms. It lists your personal information, your filing status and calculates your income taxes. For the tax year 2021, Form 1040 is two pages long but has numerous schedules and other forms flowing into it.
Any tax deductions and credits you claim will be listed here. Final calculations end with either a refund or tax due. There are 8 variations of Form 1040.
2. Form W-2, Wage and Tax Statement
If you are an employee, you will receive Form W-2, which contains the amount of your wages and withholdings paid to the federal and state departments. In addition, the amount you put into your Social Security and Medicare during the year is listed in Boxes 4 and 6.
Any employer-sponsored benefits, such as 401(k) plans or health care coverage, are listed in Box 12. You will receive a new W-2 for each year, which must be included with your Form 1040. If you need to correct your W-2, you must file Form W-2C.
3. Form 1099-INT, Interest Income
If you have a checking or savings account and receive over $10 in interest for the year, you should receive a Form 1099-INT from your bank, brokerages, or other institutions.
The form can report different types of interest, such as interest on U.S. Savings Bonds and Treasury obligations, interest income from banks and brokerages, and tax-exempt interest.
4. Form 1099-DIV, Dividends and Distributions
Brokers and other institutions have to report the amount of dividends and other distributions to taxpayers during the year. Pay attention to the Account number listed, as you can receive multiple 1099-DIV from the same broker if you have multiple accounts.
The majority of 1099-DIV won’t look like the IRS 1099-DIV but will provide similar information and label it with the corresponding box number.
Taxpayers will find their ordinary and qualified dividends listed in Box 1. Qualified dividends and long-term capital gains distributions are taxed at lower tax rates for long-term capital gains. In addition, foreign tax paid on dividends up to $300 doesn’t need to be filed on Form 1116 but can be directly put on 1040, Schedule 3.
5. Form 1099-B, Capital Gain (or Loss)
Brokers and barter exchanges use this form to report taxpayer gains and losses during the tax year. Together with 1099-DIV and 1099-INT, Form 1099-B may be presented on one statement and have a much different look. However, all the corresponding boxes from IRS 1099-B will be listed.
The type of transactions reported on 1099-B includes sell of stocks, options, commodities, and other securities. Most will contain the dates of purchase and sell, cost, and proceed information. The information from 1099-B flows to Schedule D, which flows into 1040.
Short-term (< 1 year) or long-term (> 1 year) gain and loss will be listed with information on whether it was covered (required reporting of cost basis to the IRS) or not-covered. Some 1099-B may also include transaction expenses and wash sale information.
6. Form 1099-NEC, Non-Employee Compensation
Prior to the tax year 2020, the non-employee compensation listed on 1099-NEC in Box 1 was reported on Form 1099-MISC in Box 7. This compensation refers to payments made to independent contractors, freelancers, sole proprietors, and self-employed individuals.
The form needs to be issued if the amount was more than $600 during the year. The compensation can include fees, commissions, prizes, and awards.
The information from 1099-NEC most often flows to Schedule C, Profit or Loss from Business as a sole proprietor.
7. Form 1099-MISC, Miscellaneous Income
This form is used to report miscellaneous compensation, such as rents, prizes, royalties, awards, Indian gaming profits, fishing proceeds, and other miscellaneous payments.
Before 2020, the 1099-MISC also included non-employee compensation by freelancers and self-employed individuals. However, that type of income has been moved to 1099-NEC starting with the tax year 2020.
8. Form 1099-G, Unemployment Compensation or Taxable State Tax Refund
This form reports all kinds of payments made by federal, state, and local governments. For example, unemployment payments paid out by your state would be reported in Box 1 of 1099-G.
Unemployment income is usually taxable, except in the tax year 2020 (during Covid-19 Pandemic), up to $10,200 per taxpayer was excluded from tax. Many states also frequently require withholdings on unemployment compensation, which would be listed in Box 4.
Other items often listed on 1099-G Box 2 are state refunds. State refunds may or may not be taxable depending on whether the taxpayer used standard or itemized deduction (if you itemized and deducted the state or local income tax paid on Schedule A) in the prior year.
9. Form SSA-1099, Social Security Benefits
Form SSA-1099 is issued not by the IRS but rather by the Social Security Administration. It contains a summary of taxpayer’s benefits during the year, and you must report it on your tax return if you have a filing requirement.
The benefits listed on your SSA-1099 may or may not be taxable. None, 50%, or up to 85% of your SS can become taxable depending on your other income.
The form also includes any withholdings that taxpayers chose to make as well as any Medicare Part B (insurance premiums), Part C (supplemental insurance) or Part D (prescription) deductions. These could be claimed on Schedule A if you itemize.
10. Form 1099-R, Distribution from IRAs or Distribution from Retirement Plans
This form reports distributions from annuities, retirement plans, pensions, etc. The plan issuer provides the form, which could be a former employer, broker, or insurance company. By law, the 1099-Rs should be sent to taxpayers by Jan 31, although some can come later.
On the form, you can find the distribution amount and whether it is taxable. For example, a direct rollover from one plan to another could be reported on the 1099-R but not be taxable. In some instances, the taxable amount is not calculated and may require additional calculations. The type of distribution is marked in Box 7 and federal withholdings are listed in Box 4.
11. Form 1098-T, Tuition Statement
The 1098-T form contains information on qualified education expenses paid by either the student or the parents. It is issued by colleges, universities, and vocational schools and sent out each year to the students. The 1098-T information can be used to claim education-related tax credits.
It may also contain information on scholarships received, which reduces the amount of education expenses that can be used to claim tax credits. In addition, the listed costs are paid directly to the school and don’t include out-of-pocket expenses such as books and supplies, which may also qualify toward a credit.
12. Form 1098-E, Student Loan Interest Statement
Student loan servicers send out this form to students or parents that paid student loan interest in the prior year. If you have more than one student loan, you can receive multiple 1098-E forms.
If the interest was your legal obligation to pay and you don’t file married filing separately, you should be able to claim up to a $2,500 student loan deduction per tax return (not per taxpayer). In addition, there is a MAGI phaseout limits for different filing statuses.
13. Form 1098, Mortgage Interest Statement
If you paid over $600 in mortgage interest and points on a mortgage, you should receive 1098 from your lender. If you itemize and file Schedule A, you can use the 1098 form to deduct mortgage interest. You must request the form if the amount is less than $600 and the lender didn’t send it to you.
If you paid any real estate tax through your bank and escrow, it would also show up on 1098, which can also be deducted on Schedule A if you itemize. You could also claim state property tax credit on some state returns.
14. Form 1095-A, Health Insurance Marketplace Statement
If you received health care coverage through a Health Insurance Marketplace carrier, you should receive form 1095-A summarizing your coverage for the year. The amount you paid and if the government paid any advanced premiums (subsidies) towards your coverage will be listed on the form.
When you file your taxes, you need to include the 1095-A information to reconcile the number of subsidies you received versus your income. If you received too much in credits, you might need to repay some of them. Not including the form and reconciling it on Form 8962, Premium Tax Credit calculations can cause the return to be rejected and the refund to be delayed.
15. Form 1099-K, Payment Card and Third Party Network Transactions
The 1099-K is a form sent by third-party payment networks such as PayPal, Venmo, Zelle, etc., to taxpayers who received payments through their networks. If you’re self-employed or an independent contractor, you will use the 1099-K information to report your income on Schedule C.
For the tax year 2021 and prior, the form was issued if the gross payments were more than $20,000 and involved more than 200 transactions. However, many taxpayers received the 1099-K from third parties such as rideshare companies with smaller thresholds.
Starting with the tax year 2022, the 1099-K will be issued if the gross payment amount is over $600 and no transaction threshold.
The 1099-K is an information return, meaning that it helps calculate other things; thus, if that information is already captured somewhere else, taxpayers have to make sure they don’t double report their income.
The above is a summary of the more in-depth discussion in the Boost Your Tax IQ book. This is a bite-size checklist of the main points covered to help you feel confident about filing for the tax year 2021.
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