The tax forms that many taxpayers need to use to report their financial and tax information to the IRS are 1040, 1040EZ, W-2, and 1099. It’s a good idea to review which type of form is correct for you. The major factors to be considered are your sources of income and your filing status. However, each tax form is unique:
Form 1040 is one of the most commonly used tax forms. All taxpayers can use Form 1040, but taxpayers with simpler finances should consider using a 1040EZ or 1040A. If you use 1040, you can itemize your deductions, and claim certain tax credits. Other factors to consider are:
- You have certain types of income such as unreported tips; dividends on insurance policies that exceed the total of all net premiums you paid for the contract; self-employment earnings; or income received as a partner, a shareholder in an S corporation, or a beneficiary of an estate or trust
- You claim adjustments to income, or
- You owe household employment taxes.
This form is used to file an individual federal income tax return if you are filing single or married filing jointly. Form 1040EZ is a simple form to complete. You should use this form only if your taxable income is less than $100,000 and you claim no dependents. If you use 1040 EZ, you cannot itemize your deductions or claim adjustments to income. You can use 1040EZ if:
- You and your spouse if filing a joint return, were under age 65 on January 1, 2015, and not blind at the end of 2014
- You have only wages, salaries, tips, taxable scholarship and fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends, and your taxable interest was not over $1,500
- Your earned tips, if any, are included in boxes 5 and 7 of your Form W-2
- You do not owe any household employment taxes on wages you paid to a household employee
- You do not claim any credits other than the earned income credit
- Advance payments of the premium tax credit were not made for you, your spouse, or any individual you enrolled in coverage for whom no one else is claiming the personal exemption.
Every employer that pays remuneration to the employees, including noncash payments of $600 or more in a year, must file Form W-2 for each employee. The employer is required to withhold taxes from the paycheck of each employee for tax filing purposes. Only employees are required to receive a W-2. Independent contractors or the self-employed will typically report their earnings on Form 1099, and not W-2.
If you are an independent contactor such as a freelance writer or artist that provides services to clients, then you must file form 1099-MISC if you receive at least $600 from each client during a tax year. Income from every client must be reported on this tax form. There are a series of tax forms related to 1099 used for various kinds of reporting to the IRS.