The big guide to necessary tax forms
Even if you have an idea about the forms are needed, it’s still easy to miss something important and failing to submit a form could result in a smaller refund. Luckily, tax software can give a helping hand in gathering everything necessary by explaining exactly which forms are needed, listing the required documents in the summary of each tax topic or simply providing a handy checklist.
Remember, however, that despite being capable of importing entire returns with a single click, these programs still require manual data entry more often than not. So, once all the personal information has been collected, it’s time to check whether the following documents are also by your side:
Sources of income
Granted, there are many forms that cover different types of income, but three in particular stand out as being the most widespread. Firstly, there is the well-known W-2, which is one of the very few documents that can be imported into tax programs via scanning or directly importing it into the solution. Then there are two that are strongly related to the self-employed: the 1099-MISC that reports on an independent contractor’s income so long as they earned more than $600, and the 1040ES where sole proprietors can estimate their taxes.
In most cases these forms are perfectly enough, but there may be special forms of income that have to be reported, too, such as unemployment benefits, investments, rental properties, alimony, Social Security benefits and, of course, business income.
Deductions and credits
It’s worth noting that when it comes to forms related to deductions and credits the bare minimum is more than enough. It saves you time, and the software will find the best deductions and credits anyway, even if it recommends standard deductions. However, if itemizing deductions would result in a greater amount of refund, then the following documents should be included in the return:
- Expenses related to education (Form 1098-T).
- Mortgage interests (Form 1098).
- Investment interests.
- Medical and dental expenses not covered by the health insurance.
- Qualified business expenses.
- Childcare costs.
- Charitable donations with acknowledgements of receipts should their amounts be over $250.
Paid taxes
Although including taxes already paid isn’t obligatory – especially if your W-2 already contains them – it’s still an effective method to avoid overpayment. As such, if they are important and haven’t been added to the return already, look for documents that confirm payment of the following:
- State and local income taxes.
- Real estate taxes.
- Personal property taxes.
- Vehicle license fee based on value.
What to do if a form is missing or needs correction
Gathering the necessary documents and then filing an accurate return is always the taxpayer’s responsibility. However, there are cases when the documents either don’t arrive in time or contain errors since the IRS requires forms to first be delivered to, for instance, employers who must first fill out any necessary information before forwarding it on to the taxpayer by no later than mid-February. If that happens, don’t hesitate to contact the issuers of those forms – such as employers, clients, or the state – and ask them to send the documents as soon as possible or to issue a new form with correct information.
But if that doesn’t happen and there are still some forms missing before the April 15 filing deadline, there is the option to request a tax extension that allows individuals to postpone the filing of their returns by October 15 of the same year. Note, however, that this extension is for emergency purposes only as it doesn’t provide an excuse to not pay any owed taxes after April 15, and it also comes with a late payment penalty of 0.5% per month at an interest of 3% per year.
Zoltán G.
Adam B.
