For most individuals and businesses, tax return preparation involves reviewing and utilizing multiple types of forms. Some of these documents are received for work paid, while others are completed as part of the return. Here’s a closer look at some of the most familiar options and how they’re used. 

3 Most Common Tax Forms to Know

1. Form 1040

Virtually every person will come across this form during their working life. Form 1040 is the primary document required for individual income tax returns. It covers multiple areas of information, including filing status, taxes paid throughout the year, and income with sources. Dependents and potential deductions or credits are also listed. 

There are a few different variations of the main tax form. Most people will utilize the standard 1040 every year. However, once you reach the age of 65 years, the form is swapped for the 1040-SR. There’s also a 1040-ES, but it’s usually utilized by self-employed individuals throughout the year to cover estimated quarterly taxes. 

2. W-2

Most traditional workers also handle a W-2 form during tax return preparation. This document is sent at the beginning of the year from employers to their staff. It outlines all the wages earned from the previous year—both gross and net earnings taken home—and the taxes paid from their checks. This information is utilized by the accountant when preparing Form 1040. 

3. 1099-NEC

Individuals that work in nontraditional employer-employee roles, like freelancers and contractors, don’t get a W-2 unless the business pulls out taxes for them. Instead, they receive 1099-NEC form from each company that paid $600 or more to them. The details are utilized on Form 1044 to determine taxes owed. Previously, a 1099-MISC form was sent, which is still utilized for royalties and monetary awards or prizes. 

Enter into tax season with peace of mind that only a team of professionals can provide by reaching out to Gillette & Associates. The local accountants provide dependable, convenient, and accurate bookkeeping and tax return preparation services across La Cross County, WI. Find out how the team can assist you online and by calling (608) 784-8355 for a personalized consultation.