Get familiar with common tax forms.

There are many different IRS forms related to taxes, including those for withholding taxes, reporting income and filing taxes.

Withholding Taxes

Form W-4
When you start a job, you will fill out a W-4 Links to an external site. to tell you employer how much of your paycheck should be sent to the government (your withholding). Withholding taxes from your pay is a balancing act. You don’t want to pay too much or too little. Big refunds are nice, but think about what you could do with the money if you kept it in your paycheck throughout the year. When you withhold too much and get a refund at tax time, you are giving the government a free loan. If you withhold too little, you might be scraping together funds to pay taxes. There also could be penalties for not paying enough.

Update your W-4 whenever there is a significant change in your financial or personal situation (e.g., marriage, birth or adoption). Keep a current copy of your W-4 for your records.

  • Items 1 through 4: Enter your personal information (use your full legal name).
  • Item 5: Refer to the instructions in the Personal Allowances Worksheet to match your withholding closely to your actual tax liability (what you will pay in federal income taxes). Withholding allowances reduce the taxes withheld from your paycheck. Claiming more allowances puts more money in your pocket; claiming fewer sends more to the government. Use the Personal Allowances Worksheet on the W-4 to calculate your allowances. Transfer your total allowances from line H of the Personal Allowances Worksheet to Item 5 on the W-4.
  • Item 6: Usually you will enter zero here, but you can have more taxes withheld from each paycheck if you think you will owe money in April.
  • Item 7: Enter “Exempt” only if you meet the conditions specified. Otherwise, leave it blank.
  • Sign and date your form with your full legal name.
  • Items 8 thorough 10: Your employer will complete these, so leave them blank.

The IRS offers a withholding calculator Links to an external site. to help you with the W-4.

Reporting Income

Form W-2
Your employer reports your income to you and the IRS with this form. You receive a W-2 if you have earned $600 or more during the year, or if you have had taxes withheld on any amount you earned. It shows the federal, state and local taxes you have paid, Social Security and Medicare taxes, along with your contributions to retirement plans, health/medical savings or flexible spending accounts.

Form 1099
If you work as an independent contractor, Form 1099 reports earnings to the IRS and you. It does not reflect withholdings.

Filing Taxes

Form 1098-E
If you have a student loan, this form lists interest you paid during the year.

Form 1098-T
This form lists qualified tuition and related expenses you paid for college tuition. You might be able to adjust your taxable income for this amount.

Form 1040
This form commonly is used to file taxes if your taxable income is greater than $100,000 or if you need to itemize deductions. (Use Form 1040A if you have adjustments to your income.)

Form 1040EZ
This is the simplest form to use if you are filing single or married filing jointly, have no dependents, have no adjustments (deductions) to your income and have a taxable income less than $100,000.

 

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