Millions of individuals and businesses file Annual Tax Returns to report to the federal government their income, the deductions and claims, the total tax bill, and the underpaid or overpaid amount for the year.
Your Tax Return filing obligations depend on your income, if you are claimed as a dependent, and filing status. There are specific forms with the USA Tax Authority IRS (Internal Revenue Service) for different taxpayers.
You may be muddled about these forms that you need to submit, especially if you’ve never filed taxes before.
Here is a quick guide to get acquainted with Form 1040 and Form 1099:
Form 1040 for U.S. Individual Tax Returns
- Form 1040, another name is the Long-Form. Most U.S. citizens – single, head of the family, married couples filing jointly or separately, surviving spouse, aged less than 65 years, and have no dependents with taxable income of above $100,000 – use the basic IRS tax form to declare their filing status, claim credits, and deductions.
- If your income is non-taxable, but you are eligible for a tax refund, this is the form for you. 1040A and 1040EZ are shorter forms that contain fewer tax deductions and credits than the extremely comprehensive long Form 1040.
- Form 1040-SR for Seniors is the simplified form alternative to Form 1040 with fewer complications, specifically for senior citizens of 65 or more. The form can be easily documented for common sources of income like Social Security, annuities, IRA distributions, etc.
In case of senior citizen filling under Form 1040 or 1040SR is optional.
Form 1099 For Different Incomes
- If you gained more than $10 interest in a financial transaction, you need to submit Form 1099-INT from the bank, brokerage, or other financial institutions as per the case. The form is used for several types of interest income, like interest on Bonds, Treasury, interest from banks, and tax-exempt interest. All amounts listed on the form need to be reported while filing a tax return. If the total taxable interest is above the $1,500 threshold, you need to, additionally, prepare a Schedule B consisting of details of each payer and the interest amount.
- Form 1099-MISC is received for miscellaneous income of $600 or more like rents, royalties, etc. 1099-NEC is for self-employment income.
- Form 1099-G is used to report Certain Payments from the government like unemployment benefits, taxable grants, and payouts provided by the Department of Agriculture, etc.
- Form 1099-K for individuals engaged in transactions with a payment settlement entity (PSE) like drivers working with Uber.
- Form 1099-DIV is received to report dividends and capital gain distributions to the IRS.
These are the majorly used forms by individuals. Using the right one, you can prevent a potentially costly mistake. You can get assistance from BFAG for accounting for multiple types of tax returns. They will take care of everything required for data compilation & preparation of tax returns and you can concentrate on scaling up your operations..
BFAG (Boston Financial Advisory Group) provides the best accounting and financial services. We have a team of experienced professionals who can help you in maintaining your books of accounts.
Contact us in case of any assistance or queries.
email@example.com / firstname.lastname@example.org
USA: +1 6099377291
Bangalore: +91 80 2572 4800
Pune: +91 7420061235