Tax returns record income earned in a given year. Filing your own yearly tax returns is an arduous process. Not only do you have to itemize assets and write off expenses, but you need to know where to find accurate information. Fortunately, several documents will allow you to quickly and easily access the information you need to file an income tax return.
Form W-2 is an employee income statement that shows how much money you earned working for a company in the past year. Form W-2 includes key information such as employer name, employer tax identification number, employee identification number and total income. Form W-2 includes taxes withheld, such as state tax, Social Security and Medicaid. In addition to your employer, you may receive W-2 forms from other sources, such as colleges (for grants or other financial aid) or gambling proceeds, according to Bank Rate. Write down the information from your W-2s on your income tax form and attach copies of the forms to your tax return.
Although form 1099 is very similar to form W-2, a key difference exists. Form W-2 is for employees of a company--those who work under the control of a company; while form 1099 is for independent contractors--those who do work on a contract or freelance basis. Form 1099 shows the amount of money that you earned working with a company in the past year. Companies do not withhold taxes from independent contractors, so form 1099 does not list taxes withheld. You will also receive 1099 forms for cash prizes or prize winnings showing the value of what you won, according to Bank Rate.
If you plan to deduct items from your tax return, receipts are crucial to recording accurate information. Gather receipts or bill records for all items that you plan to write off, such as mortgage interest payments or charitable donations. Write down the deduction amounts on your tax return, and keep copies of the receipts in case any issues arise.
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