The Complete Guide to Tax Forms: Which Ones Do You Actually Need?

Taxes are confusing enough and the alphabet soup of forms with different names, numbers and acronyms don’t help.  Whether you work for someone as an employee, are a freelancer or have multiple streams of income, knowing what forms you’ll need and where to get them will make preparing your taxes less stressful and more productive.  To get started we’ll organize them by how they’ll come up on your 1040 form and in the tax preparation software.

💰 Wages and salaries

After your personal and family information, most of the first page of the 1040 form is about gathering information on your income. For many of us that means the W-2.

W-2 Form: The W-2 is the main form for taxpayers that received wages from an employer. These could be from working for an organization or an individual. It includes information about your total taxable compensation, withholding for federal, state & local taxes, and payroll taxes (Social Security & Medicare) that you paid, as well as additional information on benefits and other compensation.

📅 When to expect: Employers must send out the W-2 form by January 31st.

📍Where to get: Either mailed to the you or available online (normally in your benefits or payroll account).

📝 1099 forms

Freelance and contract work

If you performed freelance work, you should also receive any of the following forms. These forms are usually required when the contractor or freelancer receives $600 or more, although there are exceptions (example: $10 in royalty payments).

1099-NEC: The form 1099-NEC (Non-Employee Compensation) reports compensation received for freelance, consultant and independent contractor work in the gig economy. Unlike W-2 employees, taxes aren’t automatically withheld, so you may need to make estimated tax payments.

1099-MISC: This is for other miscellaneous income including self-employment income and services related to any rental properties you own. You may also get a 1099-MISC for miscellaneous payments like prize money, awards, and lawsuit settlements.

1099-K: Form 1099-K is used by the IRS to track payments that you received from credit cards, debit cards, or electronic payment services (Square, PayPal, ePay, etc.).

📅 When to expect: These forms are generally due to the recipient by January 31st, although there are a couple of exceptions.

📍Where to get: In the case of NEC & MISC, these will be provided by the company or individual who hired you. 1099-K forms are provided by the payment processor.

Let’s put this into practice:

Let’s say you are a writer and illustrator.

• You write some articles for a website as a contractor, this may be reported on form 1099-NEC.

• At the same time, you had published a kids book. The royalties that the book generates would be reported to you by the publisher on the 1099-MISC.

• Finally, you have an Etsy store where you sell some of your illustrations directly to the public and you use Stripe to get paid, these payments would be reported by Stripe on the 1099-K.

🏦 Banks, brokerages and retirement plans

Depending on your financial situation, you may have savings and investments in a variety of places and depending on the type of earnings you receive, you may get different types of 1099 forms.

• 1099 INT - This reports interest income from checking or savings accounts. Only required if you receive $10 or more in income from that institution.

• 1099 DIV - These report dividends and other distributions paid to you. It is only required if you receive $10 or more in dividends.

• 1099-B – This form is used by brokerage firms and mutual funds to report investment income from selling a variety of investments like stocks, bonds, mutual funds, and cryptocurrency.

• 1099-R – This reports any distributions from retirement plan accounts like IRA, 401k, pension, or annuity.

📅 When to expect: All of these forms are due by January 31st except for the 1099-B which is due by February 15th.

📍Where to get: Provided by the financial institution, either by mail to the account holder or available online.

On a separate note, if you made contribution or rollover into a retirement plan, you would also receive a form 5498 from the financial institution, but these would not be received until May 31st, since you can contribute to your IRA accounts through April 15th and still get credit for prior year contributions.

💵 Income from the government

If you are the recipient of income from the federal or state government, you might receive:

• 1099-G – This form is usually provided to those that receive unemployment income during the year or to report refunds from state & local income taxes. In addition, you may get a 1099-g if you got taxable grants and agriculture payments.

• SSA-1099 – Reports when receive payments from the Social Security Administration for retirement, disability, or survivors' benefits. If you are a railroad employee, the equivalent form would be the RRB-1099 from the Railroad Retirement Board.

🏠 Other less common income

W-2G – Used to report lottery and gambling winnings. The reporting requirements depend on the game you played and how much you won.

📅 When to expect: Due either at the time of the winning earnings or by January 31st.

📍Where to get: Issued by the institution or gambling facility.

1099-S - Proceeds from a real estate transaction. If you sold your primary residence, you may need to report the sale on your return. Profits of up to $250,000 ($500,000 on a joint return) generally do not need to be reported to the IRS.

📅 When to expect: Due either at the time of the winning earnings or by January 31st.

📍Where to get: Issued by the closing agent. This could be the escrow agent, settlement agent or title company responsible for the transaction.

✍️ Finalizing the income section

Now that you've collected all your potential income forms, you should be ready to start filling out your 1040. Having all necessary forms at the ready and easy to access will make this task go much smoother even when using a tax prep software. Once you've inputted all your income, you should be ready for credits and deductions.

This guide is for informational purposes only. Tax rules are complicated and change regularly. Consult a qualified tax or financial adviser for your personal situation.