Tax Forms to Watch Out For — Getting Ready for Tax Season

Welcome to the first blog post at MyFirstBusiness.

We’re closing into the end of January, you know what that means..tax season.

We are going to break down what we originally intended as a tax course and give it to you for free! Ya know, the things you need to know to get ready for tax season, forms to look out for, etc.

Today, we’re going to go through the forms you need to look out for as you get ready to file your taxes. Hopefully, you’ve started receiving them by now. You might go through this list and realize you need a few more forms than you were expecting. If you haven’t received any of these…you should probably call someone!

W-2

If you’re employed, guess what? It’s January and you should be receiving a W-2 in the mail from your employer. If you haven’t yet, go get it.

1099-INT

A lot of us are investing nowadays, thanks to online resources like Big Later and trendy fintech startups that make giving them your money…fun? Ya, we’ll go with fun.

When you earn interest from your money sitting in a savings account OR a brokerage account, you will receive this form on the money you have earned from that year.

It may only be 20 bucks but hey, it’s free money.

1099-DIV

Brokerage companies may also be purchasing stocks for you, and these companies may also be paying out dividends. When this happens the brokerage firm will issue you a 1099-DIV for the money paid out by the companies they purchased stock on your behalf.

Another reason you might be receiving this is if you bought stock in a company and they paid out dividends this year.

1099-NEC

It’s 2021, we all know a freelancer or are a freelancer ourselves. When you do consult or freelance work the company you worked for should be sending you this form for the money you earned.

1099-K

Tying together multiple services to start your own business in the last few years has taken off with companies like Stripe or Paypal for payment processing.

When you use a merchant like this, they are REQUIRED to file a 1099-K to report total transactions OVER $20,000. Anything less than $20,000 the merchant will not be issuing you this form but you will still be responsible to report the income.

1099-S

This form will cover if you have sold any stock or if you have sold a house this year. Either the company you sold the stock of or the escrow company will be sending you this form.

For example, if you bought stock in MyFirstBusiness(oh thanks :)) and then you sold some of your shares. We would issue you a 1099-S. Don’t worry, the government is going to make sure they get their cut on the gain if you made money on it.

Another reason you’d get one of these is if you sold me your house through ABC Escrow Company. They would be sending you this form for the sale of your house.

1098-T

So you’re a student?

Your school will report the tuition you paid by sending you this form so that you have the information you need to report on your tax return for the appropriate deduction on your tax form.

1098

If you’re a homeowner and you’re paying a mortgage, the bank or mortgage company will let you know how much interest you paid so that you can report it as a tax deduction on the Schedule A of your 1040 tax return.

1099-R

Taking a distribution out of your 401k or IRA early is naughty…but if you needed to, this form is sent to you to report the income you were distributed.

1099

This last year has been rough for a lot of people and a lot of people remain unemployed. If you collected unemployment last year, this money is taxable and the state will be issuing you a 1099 for the money you were paid.

K-1

If you’re a partner in a partnership or shareholder in an S Corp they will issue a K-1 to report your share of income and loss for the year.

We went through a lot but we believe it’s important to understand what you need to succeed. We hope you found the information valuable and you have a bit more confidence moving into this tax season. Over the next few days, we will be posting another post on claiming dependents on your tax return.

The MyFirstBusiness Team

Originally published at https://www.myfirstbusiness.io.