Know Your Tax Documents: 1040s, 1099s, & Other Tax Forms

The tax-filing process ranks up there with the root canal as something most of us dread. But a little organization and planning can help make filing those federal tax forms a bit more palatable.

Want to save yourself a bit of grief when the next tax season rolls around? Keep an eye out for those bits of paper—and more often these days, digital documents—and be ready to file what needs to be filed. Asking these questions can help:

• What forms will I receive in the mail or from my employer?
• What state and federal tax forms will I submit?
• What are all those different 1099s I sometimes get?
• What forms and schedules will I need to include in my 1040, 1040A, or 1040-SR?

Tax Forms You May Receive

Around February, you should start receiving the tax forms you need to prepare and complete your federal and state tax returns. These forms should either come in the mail or be sent to you electronically.

What forms might you receive in the mail? If you’re a full-time employee, look for a W-2. Expect a K-1 if you’re involved in a partnership. Own a house and have a mortgage? Watch for the 1098 form, which will list the interest paid.

Expect a 1099 form if you’re an independent contractor, or if you had a refund from a state investment. If you have a brokerage account, you might see a consolidated 1099, which contains all reportable income and transactions for the year. Depending on your account activity, yours may include any or all the items in the table.

If you’re saving for retirement in a 401(k) or 403(b), the amount you saved will typically show up on your W-2 rather than in a separate form. 

Have an individual retirement account (IRA)? Whether it’s atraditional IRA, SEP-IRA, SIMPLE IRA, or Roth IRA, you may receive a Form 5498 each year. However, you don’t need to worry about the tax forms for the first three types—your IRA trustee or issuer is required to file them with the IRS.

Which 1040 Form Should You Fill Out?

There are four types of 1040 forms. You’ll only need to fill out one of them, but which one?

• The 1040-EZ is a one-page form for filers who can’t claim any credits or deductions and have a taxable income under $100,000.
• The 1040-SR is for filers 65 and older. Main features include easier readability and the inclusion of senior-specific standard deduction information. 
• The 1040A is also for taxpayers with taxable income less than $100,000. It doesn’t allow itemizing, but you can claim certain tax credits and deduct student loan interest, IRA contributions, and a few other items.
• The standard 1040 is for everybody else.

1040 Schedules: The ABCs for Taxpayers 

If you’ve ever filled out a 1040, you know about all those schedules, each with a different letter or series of letters (and some with numbers). There’s no cute song to help you remember them, but here’s an overview. 

Schedule A forms are for itemized deductions—property tax, charitable donations, and such. But fewer people choose to itemize these days.

Beginning with the 2018 tax year, the standard deduction doubled to $12,000 for individuals and $24,000 for married couples filing jointly. So, many people who used to itemize deductions have begun taking the standard deduction. The Tax Foundation estimated the percentage of filers itemizing dropped by more than half—from 31% to less than 14%—due to the change.  

Yes, you’ll still need to fill out a 1040 federal tax form, but you’re less likely to need a Schedule A form. 

Remember that consolidated 1099 above? If you have taxable interest and dividends of more than $1,500, you’ll need to fill out a Schedule B. And Schedule D is where you’ll list capital gains and losses from trading stocks, bonds, or other securities. Remember, if you lost up to $3,000, you may be able to deduct that from your taxes.

And we haven’t forgotten about Schedule C. Small businesses and gig-economy people use it to list their profits, losses, and all expenses related to their business.

Need a little more time to file? Then you’ll want to use Form 4868, which gets you an extension until October. But file it by the tax-filing deadline so you’re not hit with fees for filing late. It’s also important to note that using Form 4868 may automatically file an extension with your state authorities—but not in all states, so check to be sure.

And remember: An extension doesn’t buy you extra time to pay up if you owe money to the IRS. You still need to estimate what you owe and send it.

You might never prefer tax filing over a trip to the dentist, but with a little planning and preparation, it might not leave such a bad taste in your mouth. Need a hand keeping it all straight? Download our 2022 Tax Checklist. Or see figure 1 for a handy summary of this article.

TD Ameritrade does not provide tax advice. We suggest you consult with a tax-planning professional with regard to your personal circumstances.