It’s tax time!You’ll be receiving lots of mail that you need to set aside to prepare your tax returns.
First let’s talk about the W-2s and 1099s. Both are forms that report your income to the IRS and you receive a copy of the form. The amounts on these forms are expected to show up on page 1 of your 1040.
By January 31, you should receive W-2s from all employers for whom you and your spouse worked during the year.If you don’t, contact the employer.
If you were lucky and received gambling or lottery winnings of more than $600, you may receive W-2G. The payer must send you a W-2G if:
1. $600 or more in gambling winnings and the payout is at least 300 times the amount of the wager (except winnings from bingo, keno, and slot machines)
2. $1,200 or more in gambling winnings from bingo or slot machines
3. $1,500 or more in proceeds (the amount of winnings less the amount of the wager) from keno or
4. Any gambling winnings subject to federal income tax withholding.
For any interest income of $10 or more that you received in 2006, you’ll get a Form 1099-INT. If the interest is from your bank, the interest income for the year may also be on your December and/or January bank statement. If your interest income is from your stock broker, the form 1099-INT information is probably on your yearly broker’s statement.
For dividend income of $10 or more received in 2006, look in the mail for a 1099-DIV. Again, if your dividends are through a broker, check the broker’s year-end statement.
If your yearly income is from a pension or annuity, it’s a 1099-R that will have the necessary information for your tax return. You’ll also receive a 1099-R if you withdrew money from a retirement account like a 401(k) or an IRA.
Did you have a refund on your 2005 state tax return? If so, look for a 1099-G. That state refund amount may be taxable on your 2006 tax return.
If you sold stock, keep an eye out for a form 1099-B that will show your gross proceeds received. If you sold the stock through your broker, watch for the 1099-B information on the year-end broker’s statement.
There are quite a few different ways that you might receive a 1099-MISC.The “misc” refers to the miscellaneous types of taxable income that aren’t reported on any other Form 1099.
The form will have separate boxes for these types of income: rental and royalty income, non employee compensation, medical and health care payments, fishing boat & crop insurance proceeds, excess golden parachute payments, proceeds paid to an attorney, and other income.
The “other income” box can include prizes, awards, and Indian gaming profits.
A1099-MISC will also report any federal or state income withheld from the income paid to you.
You’ll receive a Form SSA-1099 if you receive social security benefits. If you receive “equivalent railroad retirement benefits,” you’ll receive a Form RRB-1099. For information on the taxability of these benefits, see IRS Tax Topic 423.
If you have not received an expected Form 1099 by a few days after January 31, contact the payer. If you still do not receive the form by February 15th, call the IRS for assistance at 1-800-829-1040. See IRS Tax Tip Missing a Form 1099?
Now let’s talk about Form 1098. A form 1098 reports the amounts to the IRS (and you receive a copy of the form) that you may be able to deduct on your tax return.
1098 Mortgage Interest Statement
If you have a mortgage loan, you’ll get a Form 1098 from the loan company showing the interest expense that you paid in 2006. It may also show the real estate taxes paid if the loan company pays those taxes for you. If it’s a new loan for this year, it may show the points that you paid.
If you paid tuition to post-secondary educational institute for academic credit courses in 2006, you should receive a 1099-T showing the tuition and related fees. For more information, see the IRS website on Form 1099-T.
If you paid interest of $600 or more on your student loan for 2006, you’ll receive a 1099-E, showing that interest paid.
For more details on getting your information ready to prepare your return, read Tax Preparation Checklist.