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10 Tax Forms You Need to Know Before You File

From A to C-EZ, here are 10 tax forms everyone should know.
Feb. 21, 2019
Income Taxes, Personal Taxes, Taxes
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Ask the IRS’s website for a list of all federal tax forms and you’ll get over 900 results. That’s a ton of forms.

Happily, you probably don’t need to care about most of them. But here are 10 major IRS tax forms you should know about before you file.

Three of them — the W-2, 1098 and 1099 — are forms that may be sent to you with information you’ll need in order to file. The others are forms that you might need to fill out as part of your tax return.

The granddaddy of tax forms: the 1040

IRS Form 1040 is the standard federal income tax form people use to report their income, claim tax deductions and credits, and calculate the amount of their tax refund or tax bill for the year. There are six new schedules that you may or may not have to tack onto that, depending on your tax situation and whether you want to claim certain deductions and credits. Some people may not have to file any of these schedules.

There used to be three varieties, the 1040EZ, the 1040A and the 1040, that covered simple to complex tax situations. For the 2018 tax year — the tax return you’ll file in 2019 — there’s just the 1040.

For itemizers: Schedule A

Schedule A is for itemizing your deductions — property taxes, charitable contributions, mortgage interest, state taxes, medical expenses or one of myriad other options. Its tax-bill-reducing powers make it one of the single most valuable pieces of tax paper in the stack.

For those with investment income: Schedule B

This form tallies all the taxable interest and dividends over $1,500 that you received during the year. Note the word “taxable.” The lower the total, the lower your tax bill, which is one reason tax-advantaged accounts such as IRAs and 401(k)s can be so valuable — they don’t raise your taxable income.

For freelancers and small business owners: Schedule C

Schedule C (or the simpler Schedule C-EZ) is what you use to report the profits and losses from freelancing, side gigs or contractor work. It’s also where you can deduct expenses related to the growth and development of your business, such as advertising, home office expenses or office supplies. You might be able to get away with using the shorter C-EZ if your expenses are below $5,000, and you have no employees, no inventory and no depreciation or deductions for the cost of your home.

For investors: Schedule D

If you trade stocks, bonds or other instruments, Schedule D is for you, because it’s where you tally your capital gains and losses for the year. If you’re like most investors, some of your investments probably did well, and some probably didn’t. Report both types: Up to $3,000 of your net losses could be deductible ($1,500 for those married and filing separately), and Schedule D is where that mathematical magic happens. You’ll likely need information from your 1099s (see below) to get it done.

For regular employees: the W-2

The W-2 is a form your employer sends back to you in January or February. The W-2 shows, among other things, how much your employer paid you during the year, what you contributed to your company’s retirement plan and the amount of taxes withheld on your behalf. A copy goes to the IRS, so be sure you report this information accurately. (Side note: If you got a huge refund last year, fill out a new W-4 to reduce your withholding — otherwise, you may be needlessly living on less of your paycheck all year.)

For homeowners and students: Form 1098

If you have a mortgage, you’ll get one of these tax forms in the mail. It shows the interest (over $600) you paid on your home loan during the year, and that mortgage interest is generally deductible. Students might get a 1098-T, which reports tuition payments they’ve made, or a 1098-E, which reports the interest they’ve paid on their student loans. Student loan interest and tuition payments may also be deductible.

For multitaskers: Form 1099

The 1099 tax form comes in several flavors, but the big four are the 1099-DIV, 1099-INT, 1099-OID and 1099-MISC. They’re all records of income you’ve received from a source other than your employer, and whoever sent you one also sent the IRS a copy, so don’t forget to report it on your return. In a nutshell, the 1099-DIV reports dividends and distributions from investments; the 1099-INT reports interest you earned on investments; the 1099-OID comes when you buy a bond or note for less than face value; and the 1099-MISC is for most everything else not derived from investments, such as money a client paid you for freelance work.

For people who made a mistake: Form 1040X

If you filed your return and then realized you made an error, the 1040X will save your bacon. You may need to include copies of your other tax forms when you file it (go here to learn more about amending your return). Note that you’ll have to file this form on paper and mail it the old-fashioned way, so be sure to keep a copy of all supporting documents, and consider sending it certified mail. If you find out you owe more due to your mistake, you can still pay online.

For people who need more time: Form 4868

File this form with the IRS by the April deadline — you can even do it online — and you’ll buy yourself a tax extension until October. Beware: You have to make a good estimate of what you owe the IRS and send in some or all of that amount along with your extension request. If the estimated payment you send in April ends up being less than what you actually owe, you’ll need to pay interest on the difference. And don’t miss your extended deadline: The IRS can sock you with a late-filing penalty of 5% of the amount due for every month or partial month your return is late.