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What are the 1099, W-4, W-2, W-9, and 1040 forms used for when filing your taxes?

Tax season is quickly approaching, which means that tax forms will begin to pile up. And all those numbers and letters — W-2, W-9, 1099 — can quickly become confusing.

Some forms will be sent directly to you, with no further action required other than documenting it in your overall tax return in some cases. While there are other tax forms that you must complete on your own.

Many of the forms you must fill out will be determined by your employment status (whether you are self-employed or not), but there are many other factors to consider.

What is the purpose of a W-9?

A W-9 form is used to provide identifying information such as your Social Security number or tax identification number.

If you are an independent contractor, freelancer, or gig worker who is likely to earn more than $600, you should fill out a W-9. When you open an interest-bearing bank account or other types of financial accounts that provide extra income, you may be asked to fill out a W-9.

This form is not forwarded to the Internal Revenue Service. However, the information you provide on a W-9 will be used to create other forms, specifically 1099s.

Is a W-9 equivalent to a 1099?

The main distinction between a W-9 and a 1099 is that you fill out the W-9, whereas the business or entity from which you earn income fills out the 1099. In most cases, the form should arrive by January 31.

A 1099 form is used to report income that is not earned directly from an employer. There are several types of 1099 forms because there are so many different ways to make money outside of a traditional job.

For example, if you received a state or local tax refund last year, you should expect to receive a 1099-G form. Alternatively, if you made $20,000 from more than 200 transactions on sites such as Etsy, Airbnb, and Venmo, you’ll get a 1099-K.

What is a W-4 and what does it do?

When you work directly for an employer, you must complete a W-4 form.

It instructs your employer on how much federal income tax should be withheld from your paycheck based on factors such as whether you are married and filing a joint return, whether you have dependents to claim, and whether you work multiple jobs.

When you start a new job, you’ll usually be asked to fill one out. However, if the amount withheld from your paycheck during the year differs significantly from what you end up owing in taxes, you should reconsider. This could increase the size of your paycheck rather than having to wait for a refund.

You should also go over it again if your marital status changes, if you have or adopt a child, or if your employment situation changes.

The IRS has a tax withholding estimator tool that can help you determine what, if any, adjustments are necessary.

What does a W-2 form reveal?

A W-2 form is the document that your employer is required to send to you by the end of January detailing how much money you earned working for them the previous year and how much tax was withheld from your paychecks. The form will also show how much money you made from tips and any benefits you received during the year.

If you worked more than one job last year, you should expect to receive W-2 forms from each employer.

Each W-2 form you receive must be included in your tax return. The form is crucial because it verifies how much you earned.

What exactly is a 1040 tax form?

The 1040 is the general form used to file your individual income tax return. You’ll record the various types of income you earned last year, state whether you’ll take the standard deduction or itemise, and report any tax credits you qualify for in the two-page document.

You’ll know how much you owe in taxes or how much of a refund you’re due after crunching the numbers according to the instructions on the form.

Who completes Form 5695?

Form 5695 is used to declare any residential energy credits for which you may be eligible. If, for example, you installed solar energy-producing roof tiles in 2022, you can use the form to claim the Residential Clean Energy Credit.

Notably, the form does not apply to businesses.

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