Paying income tax can seem overwhelming for American taxpayers, as there are dozens of forms, and each consists of several sections. Most people use tax filing software or work with tax accountants to simplify the filing part. But, before we get there, you need to understand various IRS tax forms that taxpayers with a certain income or specific sources of income are liable to submit. Let’s check out the 2022 tax forms.
Form 1040 and Form 1040-EZ
The standard two-page long tax return form consists of the details about your filing status, income, and dependents. You don’t necessarily need a job to be liable to fill out Form 1040. Even those without a source of income can file this form if they are eligible for tax credits and refunds.
This is a complicated version of Form 1040-EZ (for senior citizens), but it allows you greater flexibility and many deductions. You can itemize deductions and save more on your taxes. Form 1040-EZ is for 65+ year American citizens or residents who report less than $100,000 and no dependents.
Form 1099-INT
If you are paid interest on deposits by banks or financial institutions, you need to fill out Form 1099-INT to report your earnings from interest. If interest earnings exceed $1,500, you need to file Schedule B to list everything and transfer the total taxable amount to the annual returns.
Schedule A
Not everyone follows the traditional approach when filing their income tax returns. While the standard deduction can save you significantly, it may not be enough. If your deductions exceed the amount you can save in a standard deduction, you should consider itemizing them. This can be done by attaching Schedule A to Form 1040. The form consists of seven types of expenses. No need to fill each category. You only need to fill out the sections relevant to your expenses. Once you have calculated the total deductible amount, transfer it to Form 1040.
Form 1099-MISC
If you are a freelancer or an independent contractor working multiple jobs as side gigs, you will get form 1099-MISC from your clients. A self-employed individual reporting an income of $400+ for the year has to pay self-employed tax, in addition to the annual income tax. This is basically a replacement for the W-2 form that you receive from your employer. Since your tax isn’t withheld automatically, you need to fill out Form 1099 to report your earnings from different sources.
Form W-2 and Form W4
You get Form W-2 from your employer at the end of the year. If you report wages or salary, your income will be automatically withheld from your salary and paid to the IRS every quarter. This form is issued by the employer showing the total amount they have withheld from your paycheck for the year. Form W4 is issued by the employee who wants changes in the taxable income. It shows your employer how much income you’d like to be withheld.