Did you know there are hundreds of IRS tax forms? Luckily, you’ll only need to know a handful of them if your tax situation is simple. However, because your tax situation can change year to year, it’s a good idea to learn about other common IRS tax forms you may not have used before. Here is a list of 50+ IRS tax forms you might need to file your taxes.
Form 1040 and Schedules
Form 1040, U.S. Individual Income Tax Return: used by U.S. taxpayers to file an annual income tax return
Form 1040-SR, U.S. Tax Return for Seniors: an optional alternative to using Form 1040 for taxpayers who are age 65 or older
Form 1040-X, Amended U.S. Individual Income Tax Return: used to amend or fix a submitted tax return
Form 1040-ES, Estimated Tax for Individuals: used to figure and pay your estimated tax
Schedule A, Itemized Deductions: used to figure your itemized deductions
Schedule B, Interest and Ordinary Dividends: used in some scenarios when you’ve earned taxable interest or dividends
Schedule C, Profit or Loss from Business (Sole Proprietorship): used to report income or losses from a business you operated as a sole proprietor
Schedule D, Capital Gains and Losses: used to report capital gains and losses for the year
Schedule E, Supplemental Income and Loss: used to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in real estate mortgage investment conduits (REMICs)
Schedule EIC, Earned Income Credit: used to give the IRS information about your qualifying child(ren)
Schedule F, Profit or Loss From Farming: used to report farm income and expenses
Schedule H, Household Employment Taxes: used to report household employment taxes. Applies if you paid cash wages to a household employee and the wages were subject to social security, Medicare, or FUTA taxes, or if you withheld federal income tax
Schedule J, Income Averaging for Farmers and Fishermen: used to figure your income tax by averaging, over the previous 3 years, all or some of your taxable income from your farming or fishing business
Schedule R, Credit for the Elderly or the Disabled: used to figure the credit for the elderly or the disabled
Schedule SE, Self-Employment Tax: used to figure the tax due on net earnings from self-employment
Schedule 8812, Credits for Qualifying Children and Other Dependents: used to figure your child tax credits
Application Forms
Form SS-4, Application for Employer Identification Number: used to apply for an Employer Identification Number (EIN). An EIN is a nine-digit number assigned to sole proprietors, corporations, partnerships, estates, trusts and other entities for tax filing and reporting purposes
Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return: used to request an automatic extension of time to file a U.S. individual income tax return
Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns: used to request an automatic 6-month extension of time to file certain business income tax, information, and other returns.
Form W-7, Application for IRS Individual Taxpayer Identification Number: used to apply for an IRS individual taxpayer identification number (ITIN)
Income and Payment Reporting Forms
Form W-2, Wage and Tax Statement: used to report wages paid to employees and the taxes withheld from them
Form 1098, Mortgage Interest Statement: used to report mortgage interest of $600 or more received by you during the year
Form 1098-T, Tuition Statement: used to report tuition payments received and payments due from the paying student
Form 1098-E, Student Loan Interest Statement: used to report the amount of interest you paid on student loans in a calendar year
Form 1099-B, Proceeds from Broker and Barter Exchange Transactions: used to report any gains and losses from stock and bond transactions made throughout the tax year
Form 1099-C, Cancellation of Debt: used to report canceled debt, which is generally considered taxable income
Form 1099-DIV, Dividends and Distributions: used to report dividends and other distributions to taxpayers and to the IRS
Form 1099-G, Certain Government Payments: used to report payments received from federal, state, or local governments. Examples include unemployment benefits, tax refunds, grants, etc.
Form 1099-INT, Interest Income: used to report interest income you received, any taxes withheld, and if any of the interest is tax-exempt
Form 1099-K, Payment Card and Third Party Network Transactions: used to report payments and transactions from online platforms, apps or payment card processors. Examples include Venmo, PayPal, eBay, Etsy, etc.
Form 1099-MISC, Miscellaneous Income: used to report miscellaneous compensation such as rents, prizes, medical payments, and others
Form 1099-NEC, Nonemployee Compensation: used to report self-employment or contract work, such as freelance work or rideshare driving
Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.: used to report distributions from annuities, profit-sharing plans, retirement plans, IRAs, insurance contracts, or pensions
Form 1099-S, Proceeds from Real Estate Transactions: used to report the sale or exchange of real estate
Business Forms
Form 1120, U.S. Corporation Income Tax Return: used to report income, gains, losses, deductions, credits of domestic corporations.
Form 1120-S, U.S. Income Tax Return for an S Corporation: used to report the income, gains, losses, deductions, credits, etc., of a domestic corporation or other entity for any tax year covered by an election to be an S corporation
Form 2106, Employee Business Expenses: used to deduct ordinary and necessary expenses for your job
Form 4562, Depreciation and Amortization (Including Information on Listed Property): used to record the depreciation and amortization of property you’ve purchased for your business
Form 8829, Expenses for Business Use of Your Home: used to figure the allowable expenses for business use of your home on Schedule C
Form 941, Employer’s Quarterly Federal Tax Return: used to report income taxes, Social Security tax, or Medicare tax withheld from employee’s paychecks
Tax Resolution Forms
Form 1127, Application for Extension of Time for Payment of Tax Due to Undue Hardship: used to request an extension of time under Internal Revenue Code section 6161 for payment of tax due
Form 11277, Application for Withdrawal of Filed Form 668(Y), Notice of Federal Tax Lien: used to request a tax lien removal.
Form 12153, Request for a Collection Due Process or Equivalent Hearing: used to request a Collection Due Process (CDP) or Equivalent Hearing (EH) with the IRS Independent Office of Appeals
Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals: used to obtain current financial information necessary for determining how a wage earner or self-employed individual can satisfy an outstanding tax liability
Form 433-B, Collection Information Statement for Businesses: used to obtain current financial information necessary for determining how a business can satisfy an outstanding tax liability
Form 656, Offer in Compromise: used to apply for an Offer in Compromise (OIC)
Form 843, Claim for Refund and Request for Abatement: used to claim a refund or request an abatement of certain taxes, interest, penalties, fees, and additions to tax
Form 8857, Request for Innocent Spouse Relief: used to request relief from tax liability, plus related penalties and interest, when you believe only your spouse or former spouse should be held responsible for all or part of the tax
Form 911, Request for Taxpayer Advocate Service Assistance: used to request taxpayer assistance if you have been unable to resolve your tax issues through normal channels
Form 9423, Collection Appeal Request: used to request an appeal of a notice of federal tax lien, levy, seizure, or termination of an installment agreement.
Form 9465, Installment Agreement Request: used to request a monthly installment plan if you cannot pay the full amount you owe shown on your tax return
Tax forms can be difficult to understand on your own. If you need tax help, the experts at Optima Tax Relief can assist. With over a decade of experience helping taxpayers, Optima is equipped to take on the most complicated tax situations.
Did you know that foreign income is still taxed by the United States? Millions of Americans who earn money abroad or plan to earn money abroad should be aware of their tax obligations. The United States is currently one of the only countries in the world that taxes based on citizenship, and not residency. However, there are some exclusions and foreign tax credits that can reduce your tax liability. Overall, reporting foreign income can be tricky. Here’s an overview of how to report foreign income at tax time.
What is Foreign Income?
First, let’s clearly define foreign income. Foreign income is any income you receive overseas. This can include the following:
Foreign wages: Foreign wages are wages paid to you for services rendered or goods sold. This can mean being employed by a foreign company or being self-employed but working abroad.
Foreign interest and dividends: Foreign interest is money earned through foreign bank accounts. Foreign dividends are payouts from foreign-earned stocks.
Foreign real estate: Foreign rental income is income earned on a property you rent out located in a foreign country. Alternatively, if you sell a property that is located outside the United States, you’ll need to report the gains or losses on the sale during tax season.
How Do I Report Foreign Income on My U.S. Tax Return?
If you earned foreign income, you would need to report it on Form 1040 when filing your tax return. You may also need to file other tax forms depending on what type of income you earned. For example, if you earned foreign interest and dividends, you’d report these on Schedule B of Form 1040. Foreign business income is reported on Schedule C. Most capital gains are reported on Schedule D. Rental property income is reported on page 1 of Schedule E. However, in more complicated tax situations, there could be additional forms to file, like Form 8938, Statement of Specified Foreign Financial Assets or Form 114, Report of Bank and Financial Accounts. In any case, you should speak to a qualified tax preparer about which forms your specific tax situation requires.
What is the Foreign Tax Credit?
Some taxpayers might worry about paying taxes twice on the same income. The Foreign Tax Credit (FTC) is one of two safeguards that help American taxpayers avoid this issue. This credit allows American expats, or U.S. citizens who live abroad, to offset foreign taxes paid abroad dollar-for-dollar. For example, if you’re an American expat who paid income taxes to the foreign country where you reside, the FTC gives you a tax credit to use on your U.S. income tax return.
Requirements
To claim this credit, you must be the following requirements:
The tax must be imposed on you. This basically means that if your resident country does not require income taxes to be paid, you do not qualify for the FTC.
You must be the one who paid or accrued the tax. This means if you have not paid the tax or accrued it, you do not qualify for the FTC.
The tax must be the legal and actual foreign tax liability. This means that if the tax is not legal, and you are not required to pay it, you do not qualify for the FTC.
The tax must be an income tax. This means that if the tax is another type of tax besides income tax, you do not qualify for the FTC. The IRS has specific rules on what they deem to be a foreign income tax. Be sure to check with your tax preparer for clarification.
How to Calculate the Foreign Tax Credit
Calculating your maximum FTC can be tricky, but essentially you can divide your foreign taxable income by your total taxable income (including U.S. income). Then take this quotient and multiply it by your U.S. tax liability. For example, if you earned $50,000 in Spain and another $10,000 in U.S. income, you’d have a total taxable income of $60,000. Let’s also assume you had a U.S. tax liability of $12,000. You would take your foreign income of $50,000 and divide it by your total taxable income of $60,000 to get 0.83. You would then multiply 0.83 by your U.S. tax liability of $12,000 to get your maximum FTC of $10,000.
Additionally, the FTC can carry over to the next tax year or carry back to a previous tax year. Unused FTC amounts can be carried over for up to 10 years. Taxpayers can claim the FTC by filing Form 1116.
What is the Foreign Earned Income Exclusion?
The other safeguard that helps American taxpayers avoid paying taxes twice on the same income is the Foreign Earned Income Exclusion (FEIE). The FEIE allows you to exclude all or some of your foreign earned income on your U.S. tax return, including salaries, wages, bonuses, commissions, and self-employment income. It does not include passive or investment income. The FEIE is available to U.S. expats who meet one of the following requirements:
Work outside the United States as an employee
Work outside the United States in a self-employed or partnership structure
Pass the Bona Fide Residency Test. This requires being overseas for work for longer than one year and having a permanent place of work in the foreign country.
Pass the Physical Presence Test. This requires living outside the United States for 330 full days out of the year.
U.S. taxpayers must use Form 2555 to claim the FEIE and can exclude up to $120,000 of foreign income for the 2023 tax year. The amount is due to increase to $126,500 for tax year 2024. Married couples filing jointly can exclude up to $240,000 as long as both spouses meet either the bona fide residency test or the physical presence test.
Help Reporting Foreign Income
Reporting foreign income can get complicated very fast. While this article covers several topics related to foreign income, it really is just the tip of the iceberg and applies to most simple tax situations. American taxpayers who live in the country, as well as expats, who earn foreign income should seek best practices regarding foreign income from reliable and knowledgeable tax professionals. If you need tax help, Optima can assist.
These days it is very common for individuals to have regular income, as well as supplemental income. While regular income earned through an employer typically has taxes withheld, some supplemental income does not. If you earn supplemental income, it’s important to learn how it is taxed and when. Here is a brief overview of supplemental income tax.
What Is Supplemental Income?
Supplemental income refers to additional earnings received beyond one’s primary source of income. It typically includes money earned from part-time jobs, freelance work, investments, rental properties, or other side ventures. The purpose of supplemental income is to supplement or add to the individual’s main source of income, providing extra financial support or flexibility. Even if you only work a regular 9 to 5 job, you may still earn supplemental income through any of the following sources:
Some taxpayers do not have regular income through an employer. Instead, they may earn supplemental income through contract work or through a business. Some examples of supplemental income for these groups are:
Schedule E income
Ridesharing service
Sales made through an online shop
Direct sales
How Is Supplemental Income Taxed?
How supplemental income is taxed depends on how the income is classified. For example, income reported on Schedule E will usually consist of estates, trust, real estate rental income, royalties, partnership and S corporation income, and residual interests in real estate mortgage investment conduits (REMICs).
Estates and Trusts
Beneficiaries pay tax on the income of the estate or trust they inherit at their regular income tax rates and at capital gains rates for any capital gains they receive. In addition, if the estate or trust does not distribute all the income to the beneficiaries it will pay tax on any undistributed income.
Royalties
If you are paid royalties for the use of any of your intangible assets, you will receive a Form 1099-MISC that tells you the amount of royalties to report on Schedule E. Royalties are taxed at your regular income tax rate.
Business Income from Partnerships and S-Corps
Taxes for S-Corps pass through to shareholders. Additionally, taxes for partnerships pass through to the partner’s personal income. The tax rate will depend on personal income rates.
Real Estate Rental Income
The tax rate for rental real estate varies from 10% to 37%, depending on your filing status and taxable income.
Tax Rates
Supplemental income for employees is based on personal income tax rates. However, the amount withheld will vary depending on whether your employer pays it out with your regular wages or separately. If it’s combined with your wages, the amount withheld will typically be withheld like wages. If they are paid out separately, employers can withhold at the IRS’s flat rate of 22%. Finally, taxpayers who earn $1 million in supplemental income, it will be taxed at 37%.
You should report supplemental income earned through gig, contract, or freelance work on your individual tax return using Schedule C. In addition, if you receive any 1099 Forms, you should use these to calculate your total income through independent work.
Tax Help for Supplemental Income Earners
Tax policy can change every now and then. If you earn any type of supplemental income, you should stay up to date on all the most recent changes in taxation rules. For example, in 2024 the rules for reporting income earned through Form 1099 are changing drastically. Being unprepared for a change in policy could lead to all sorts of issues. Examples include a large tax bill to an IRS audit. When in doubt, your best bet is to speak to a trusted tax professional to avoid a stressful tax issue. Regardless, if you need tax help, Optima and our team of experts are here.
Being your own boss can feel freeing and powerful. However, with great power comes great responsibility, especially when it comes to taxes. Taking care of all business aspects on your own means you should be prepared to handle all the financial work that comes with the new adventure. Here’s a brief tax guide for the self-employed.
Get Financially Organized
There’s nothing worse than scrambling for income and expenses during tax time. Staying organized throughout the year can save you time and money. You’ll want to maintain accurate records including:
Income statements with invoices, receipts, Forms 1099, etc.
Purchase invoices
Receipts for travel, transportation, entertainment, and gifts that are business-related
A breakdown of your assets, including purchase price, cost of improvements, depreciation deductions, etc.
Employment tax records
Know Your Responsibilities
You are already responsible for the success of your business. However, you also need to know your financial responsibilities to maintain your business. This includes paying self-employment taxes and quarterly estimated tax payments. If you earned $400 or more in 2022, you need to pay self-employment taxes. The current rate for self-employment tax is 15.3% of your net earnings, which consists of social security and Medicare tax. The good news is that since in a typical job, the employer is responsible for paying half of this tax, you’ll be able to deduct 50% of your self-employment tax during tax time.
Unfortunately, you won’t have an employer to withhold tax from your self-employed income. That said, you’ll need to make estimated tax payments by each quarterly deadline:
April 18, 2023
June 15, 2023
September 15, 2023
January 16, 2024
You should make estimated tax payments if you expect to owe more than $1,000 in federal taxes for the year. If you do not make these payments, you could face underpayment penalties.
Take Advantage of Tax Deductions
As a business owner, you have the benefit of writing off expenses that most employees cannot, as long as they are ordinary and necessary for business operations. You can write off advertising costs, supplies, legal fees, repairs, vehicle expenses, business travel and entertainment, and even more if you operate your business from home. If you aren’t eligible to participate in your spouse’s workplace health plan, you can typically pay for your own health insurance and deduct your premiums.
Those who have a business loan or business insurance can also deduct the loan interest and insurance premiums. If you only take advantage of one deduction as a business owner, you should consider the one for self-employed retirement plan contributions to an SEP-IRA, SIMPLE IRA, or 401(k). These accounts can reduce your tax bill at tax time and help you accrue tax-deferred investments gains in the future. Be sure to look into all tax deductions available so your taxable income is reduced.
Tax Help for the Self-Employed
Running a business, whether small or large, has immense opportunities for financial success. However, all of that hard work and prosperity can be taken away if you do not file your taxes correctly. In the worst-case scenario, owing the IRS taxes and not being able to pay can result in a tax lien, which can shut down your business. If this is your first year as a business owner, start off right by knowing your tax responsibilities. If you’ve had your business a while but need tax help now, we can help. Optima Tax Relief is the nation’s leading tax resolution firm with over a decade of experience helping taxpayers with tough tax situations.
Real estate investments can be very complex, especially when it comes to tax reporting. However, there are general tax implications for common scenarios. Here, we will discuss some of these benefits:
Who is responsible for payroll taxes? CEO David King and Lead Tax Attorney Philip Hwang discuss everything you need to know regarding payroll taxes, including tips on what to do if you find yourself in trouble with the IRS.
The desire or need for extra income has become increasingly prevalent. Side gigs have been a popular method of supplementing earnings but with this comes more reporting during tax time. When is a side business treated as a business in the tax world, and when is it treated as a hobby?
Real estate has long been considered one of the greatest long-term investments. Further, with the trend of minimalist living, many are turning their primary residences into rental properties. While turning your home to a rental property comes with passive income and tax benefits, it’s important to note the tax implications as well.
