Tax forms are how you share the story of your finances over the last year with the IRS. Even if you work with a tax professional to file your return, it's helpful to understand these documents. Here are the basics on some of the most common tax forms, and how they could come in handy when filing your tax return. Consult a tax professional for questions about your specific situation.
What tax forms do you need?
The tax forms you need to file taxes generally depend on how you generated income over the previous calendar year. Sources could include employment or self-employment, account distributions, and investments. If you're an employee, your tax forms will differ from someone who is self-employed or an independent worker. And if you're employed and have a side hustle, you'll likely need to report those different income streams on different forms. Or if you're any combination of those and have investments or take account distributions, there are additional forms you may receive. You may also need a form for deductions or tax credits you plan to take.
Here's more on some of these common tax form categories.
Tax forms for employees
If you were an employee last tax year—meaning you worked for an employer instead of for yourself—Form W-2 is likely essential for your next tax return. This form details your wages, taxes withheld throughout the year, and contributions to any workplace retirement accounts, like a 401(k) or 403(b).
Tax forms for freelancers and the self-employed
If you had income from being a contractor, freelancer, or independent worker and made $600 or more over the last year, that income should get reported on Form 1099-NEC (NEC = nonemployee compensation). If you used a platform to process payments for your independent work, or sold goods on online marketplaces, you may receive a Form 1099-K with that income reported. If you made income from sources other than being self-employed, like receiving royalty payments or prize money, you might need to file Form 1099-MISC (MISC = miscellaneous income). It also shows the amount of federal income tax that has been withheld and reported on that income for a selected account for the selected year.
Generally, the entity that pays you should file the form with the IRS on your behalf and send you a copy, but you're responsible for reporting income over certain thresholds, even if you don't get copies of the forms. It can be tricky to report multiple sources of income correctly, so consult a tax professional if you need help.
Learn more about one of these key tax forms:
Form 1099-MISCTax forms for investing and savings income
If you earned $10 or more from interest in a savings account or from bonds, expect to receive a Form 1099-INT (INT, as in interest). And if you made money from dividends, expect a Form 1099-DIV (DIV, as in dividend). If you sold investments, like a stock, bond, or fund, over the last year, Form 1099-B tracks and reports any capital gains or losses. Some firms, like Fidelity Investments, consolidate several 1099 forms—the 1099-DIV, 1099-B, 1099-INT, and 1099-MISC—into one tax reporting statement for income that doesn't come from an employer.
Learn more about one of these key tax forms:
Form 1099-DIV
Tax forms for retirement accounts
Another source of income you'll have to report is money from retirement accounts. Form 1099-R reports distributions from pensions, IRAs, annuities, retirement plans, profit-sharing plans, and insurance contracts. The R in 1099-R stands for retirement, but whether or not you're retired, if you receive money from those sources, you should receive this form and will need to factor in the income you received on these forms when figuring out your tax bill or refund. If you made contributions to any type of IRA, you may receive a Form 5498, but you don't need to file that form with your taxes. Form 5498 helps you track your contributions and is primarily for your own record keeping.
Learn more about some of these key tax forms:
Core tax return documents and schedules
When filing your taxes, you'll most likely use Form 1040, which is the main document in your tax return for reporting your income (informed by the forms mentioned above) and deductions. Depending on your financial situation, you may also attach additional documents to your Form 1040 called schedules. Some of the most common schedules are:
- Schedule A, which is used if you're itemizing your deductions, instead of taking the standard deduction. Deductions on Schedule A could include qualified charitable donations, medical and dental expenses, and job expenses.
- Schedule B is for reporting interest and dividends over a certain threshold ($1,500 of taxable interest and dividends for most taxpayers). Forms 1099-INT and 1099-DIV are used to complete Schedule B. If you have any foreign bank accounts, financial accounts, or trusts, you'll need to disclose those on Schedule B.
- Schedule C is used to report income and expenses for those who are self-employed. So you'll report your business's profits or losses there.
- Schedule D is used to report any profits or losses from selling investments over the last year. The IRS calls those profits "capital gains" and, yes, those can be subject to taxes. Form 1099-B is used to complete Schedule D. Form 8949 may also be required.