If you got an extension to file your return, you need to dig out those statements so you can finish your Form 1040 by the Oct. 17 deadline.
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Those tax-related documents are from employers, banks, stockbrokers and other institutions and agencies that were involved in taxpayers' financial lives last year. Each of these groups has, by law, until Jan. 31 (or the next business day when that date falls on a holiday or a weekend) to get their annual tax statements in the mail to taxpayers.
Many taxpayers now receive these documents electronically. If you didn't download the statements when they first arrived, check your email box for the old message or go to the company's website to get a copy now.
Common Income, Deduction Statements
Most taxpayers depend on the same basic data to file returns. If you work for someone else, the Internal Revenue Service expects you, and the agency, to get a statement detailing that income. The data are slightly different, depending on whether you get paid a salary or do contract work, but there's a form for either case.
W-2 -- This is the key form, and you need one from each employer you worked for during the past year. Your W-2 shows how much money you made, how much income tax was withheld, Social Security and Medicare taxes paid, and any benefit contributions -- retirement plans, medical accounts and child care reimbursement plans.
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1098 -- For most homeowners, mortgage interest is tax-deductible, and this document will tell you how much you paid last year. Your lender is required to send you one of these forms if you paid at least $600 interest. Actually, your mortgage company probably won't send you an official IRS form, but a document of its own design that contains the same data. In addition to the mortgage interest, other information often found on this statement includes amounts paid toward points to get the loan and escrow disbursements for real estate taxes (also deductible) and property insurance (not deductible).
1098-E -- Are you paying back a student loan? The interest on your educational debt is reported on this form; your lender must send you one if the interest tally is at least $600. You may be able to deduct your student loan interest and possibly other loan-related amounts, such as origination fees and capitalized interest. To figure the deductible portion of the interest amount found here, use the work sheet in your Form 1040 or Form 1040A instructions.
1099-INT -- If you earned more than $10 in interest on a bank account or a certificate of deposit, you'll get one of these forms for each account. Don't dismiss this statement if you reinvested the interest. Tax law says you received the income even if you didn't actually have it in your hand, and reinvested earnings are still taxable income. 1099-INT statements also are issued to people who cashed in savings bonds.
1099-DIV -- Earnings from individual stocks and mutual funds are reported on Form 1099-DIV. This will show dividends and capital gains distributed over $10. As with reinvested interest, if you used the dividends or distributions to buy additional shares of the stock or mutual fund, you still have to pay taxes. However, the distributions and certain, qualified dividends are taxed at the lower capital gains rates.
1099-B -- If you sold stocks, bonds or mutual funds, you will receive a 1099-B from your broker or mutual fund company. This will tell you the number of shares sold, when they sold and the amount you got for the sale. You'll need this information, along with the date you bought the shares and the amount you paid for them, to figure your taxes.
1099-G -- Taxpayers who got a refund of state or local taxes last year will get this form. If you used those taxes as a deduction on your previous year's federal income tax return, you'll need to report the 1099-G amount on this year's return. You don't have to worry about reporting this refund as income, however, if you took the standard federal deduction instead of itemizing.
1099-R -- If you received a pension or a distribution from an individual retirement account or retirement plan, the 1099-R provides the details of these transactions. The form is issued by your broker, pension plan manager or mutual fund company. You'll also get a 1099-R if you rolled over money in a retirement plan, usually a 401(k) to an IRA, or if you converted a traditional IRA to a Roth IRA. A rollover usually is not a taxable event, but a pension payout may be.
1099-MISC -- Self-employed individuals who earned $600 or more should get a 1099-MISC from the employer. You should get a separate 1099-MISC for each independent job you had during the previous tax year.
There are a couple of statements you might need for your tax records, but because of the intricacies of the financial arrangements they cover, the documents do not always arrive before the April filing deadline. But if you got an extension to file, you shouldn't have any issues.
Form 5498 -- Any contributions made during the calendar year to any individual retirement accounts are reported on this form. The 5498 shows traditional IRA contributions that might be deductible on your tax return, as well as any rollovers, including a direct rollover to a traditional IRA, made during the last tax year. It also reports amounts recharacterized from one type of IRA to another. It notes any amounts converted from a traditional IRA, simplified employee pension or savings incentive match plan for employees to a Roth IRA.
Because these savings plans allow contributions up until the April tax filing deadline, Form 5498s for these accounts aren't due to taxpayers until May 31. You should, however, get a statement of each account's fair market value in early February. You don't need it to file your return, but keep it for your records. It will be helpful when you begin taking money out of these accounts and need to calculate any taxes.
Form 5498-ESA -- Contributions to Coverdell education savings accounts, formerly known as Education IRAs, previously were reported on Form 5498, but these plans now are tracked on this statement. The youngster named as account beneficiary should get a copy of this document by April 30.
Schedule K-1 -- Finally, if you received money from an estate, trust, partnership or S corporation last year, you should get a Schedule K-1. However, because of the complexity of many of these arrangements, account managers tend to send out K-1s later in the tax season -- sometimes not until after the April filing deadline.
Because you do need to know this amount of K-1 income to file your return, taxpayers who get K-1s tend to file Form 4868, Application for Automatic Extension of Time to File, to get six more months to get all their tax statements in hand. With the extended October deadline now approaching, you should have your K-1 in hand.