The IRS has officially kicked off tax season, and taxpayers’ physical and digital mailboxes will soon begin, if they haven’t already, filling out tax forms from their employers, banks and financial institutions, and d ‘somewhere else. Consider the IRS Warning that it will be another turbulent fiscal season plagued with potential delays, the Illinois CPA Society (ICPAS) has compiled a list to help taxpayers and urges them not to delay compiling and filing their tax returns.
Browsing through the various forms with seemingly identical titles can be confusing, so here’s a breakdown of the forms most taxpayers are likely to receive this year:
- W-2: One of the most common forms, Form W-2, is provided annually by employers to report a taxpayer’s total compensation, taxes paid, and contributions to retirement accounts, among other payroll details.
- 1098: Buying a new property or continuing to pay a mortgage? Form 1098 is the mortgage interest statement provided by each lender for each mortgage on which a taxpayer is named, showing the amount paid in interest and insurance premiums, along with other financial details.
- 1098-E: Taxpayers with federal student loans may or may not receive this form for 2021, as interest on these loans has been waived due to COVID-19 hardship. Generally, Form 1098-E reports interest on federal student loans paid by borrowers equal to or greater than $600.
- 1098-T: Taxpayers who received payments for eligible tuition and expenses, certain adjustments, scholarships, or grants will receive Form 1098-T from their educational institution for reporting purposes.
- 1099-B: Investors receiving proceeds from brokerage or barter transactions, such as the sale of stocks or options, or the exchange of property, will receive a Form 1098-B from each applicable financial institution to report any capital gain or loss. .
- 1099-DIV: Each bank or financial institution where a taxpayer receives dividends or other distributions from their investments during the calendar year will receive Form 1099-DIV to report the income.
- 1099-INT: Interest earned above $10 will be reported on Form 1099-INT from each applicable bank or financial institution.
- 1099-MISCELLANEOUS: Income from various sources, such as royalties, rent, prizes, or awards, will be reported on Form 1099-MISC.
- 1099-R: If a taxpayer received a distribution of $10 or more from a pension, annuity, retirement account, profit-sharing plan, or insurance contract, Form 1099- R will be received from each applicable financial institution to report this income.
- SSA-1099 or SSA-1042S: For taxpayers receiving Social Security benefits, Form SSA-1099 or Form SSA-1042S will be provided by the Social Security Administration to report the total amount of benefits received.
- Letter 6419: This letter from the IRS shows the total amount of money parents received in 2021 through Child Tax Credit Advance Payments, which were made from July through December 2021. If a letter is not received before filing, taxpayers can check the IRS website to see if they’ve received payments or are eligible for credit.
Most tax forms will be delivered from January to February, and it is always a good idea to check each form for any errors or inconsistencies before completing them.
The deadline for filing personal income tax returns is Monday, April 18, 2022, three days later than the normal deadline of April 15 due to an emancipation holiday in the District of Columbia. April 18 is also the deadline to request a filing extension, which gives taxpayers until October 17, 2022 to file their 2021 tax return. Remember, however, that an extension only provides additional time. to file your return and that all advance payments are still due on April 18. The IRS is urging taxpayers to file their taxes electronically and choose direct deposit and refunds due to faster processing. .
Filing federal and state tax returns can be a hectic process. ICPAS reminds taxpayers that Certified Public Accountants (CPAs) have their backs. CPAs are strategically positioned to help taxpayers file their tax returns while determining the best ways to maximize tax deductions and tax refunds. ICPAS’ free “Find a CPA” directory can help taxpayers find the right trusted strategic advisor based on location, types of services required and languages spoken. Find a CPA on www.icpas.org/findacpa.
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