Which Tax Forms Do You Need?
Nothing is ever simple when it comes to earning money. When it comes to taxes, it gets even more complicated. Below, we’ll share a few tips to help you understand which tax forms will be best for you.
W-4 | Employee’s Withholding Allowance Certificate
Article: https://www.igrad.com/articles/understanding-basic-employment-and-tax-forms
Every legit business will more than likely require you to fill out a W-4 form. This will let your employer know much in taxes they should withhold from your paychecks. This withholding allowance is based on many things: tax status, number of exemptions, etc. This form can also be updated at any time. Filing this form out correctly is very important, as it can make the difference between receiving a tax return, and owe taxes to the IRS.
W-2
The W-2 Form is an IRS document to report job income. This form states how much money you should expect to make within the year, along with the amount of taxes withheld. You can also expect any other tax-related benefits you have received to appear on this form (e.g. 401(k) contributions). W-2’s are very important when it comes to filing taxes, and employers are required by law to provide yours to you by January 31st for the previous year.
W-9
The W-9 is perhaps one of the only forms that is not submitted to the IRS. W-9’s are forms for contractors who are not full-time employees at a company. These also allow employers to produce 1099’s at the end of the year for each respective contractor.
Form 1099
Form 1099 is not a form itself, but a set of tax forms that are used to report different kinds of incomes. Below are two important 1099’s to know.
1099-MISC
1099-MISC are for independent contractors who worked for a client(s). These are very important to report, as clients will not be responsible for withholding any taxes from your pay. You should expect to pay taxes at the end of the year. A client will be required to send you a 1099-MISC by January 31st and if have made more than $600 with the client.
1099-K
If you are a contractor, receive debit/credit payment, and make more than $20,000 in gross payments/more than 200 transactions, you should expect to fill this form out. It is important to note that in 2022, the $20,000 minimum threshold will be reduced to $600.
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