Category: Tax Forms | Blog

oday-28IRS tax forms are confusing to understand. We’ll let you know which ones are necessary for your specific tax situation. Each tax form applies to a different tax circumstance. The most common tax form is the 1040.

Questions about IRS tax forms? Be sure to leave a comment on our blog posts. Our tax team will provide you with the answers you need!

Archive for the ‘Tax Forms | Blog’ Category

How to File Taxes without an IRS W-2 Form

Posted by Michelle O'Brien on November 4, 2016
Last modified: December 19, 2016

You’re all prepared to start your tax return and then realize you’re missing a W-2. Now what?

There is little that is more vexing as you prepare to file your taxes than to realize that your W-2 or 1099 form has gone missing. Sure, it could have just been shuffled about with other papers. If you think this is the case, then stop reading now and go tackle that stack of paperwork on your desk.

On the other hand, if you never received it in the first place, even Spring cleaning can’t help you. Previous and even current employers often fail to observe due diligence when it comes to providing an employee with necessary tax documents. The task of obtaining them can be quite frustrating as a result.

The situation is usually made worse if you are filing a prior year tax return, at which point a company you worked for years ago may simply have ceased to exist.

Let’s take a look at the steps you can take to obtain your income statement. We’ll even let you know how to file without one altogether. (more…)

How to Fill Out a W-4 Correctly

Posted by Michelle O'Brien on October 27, 2016
Last modified: October 28, 2016

Filling out a W-4 is less mind-boggling than you think.

One of the first things you have to do when you get a new job is fill out a Form W-4 [Employee’s Withholding Allowance Certificate]. It is essential to complete a W-4 correctly because it determines how much tax will be withheld from your pay and how large your tax refund will be.

The first half of the form is pretty easy. You just have to fill in your name, address, and marital status.

Then you have to figure out how many allowances to claim. This number will determine the amount of your withholding.

Number of allowances to claim

Generally the number of allowances you should claim will correspond to the number of personal and dependency exemptions you can claim on your tax return, but this is not always the case. Claiming zero allowances will result in the maximum amount of tax withheld. Every additional allowance you claim on top of that means that a little less tax is withheld. (more…)

Do I Claim Zero, One, Two W-4 Allowances?

Posted by Emma Lawrence on October 23, 2016
Last modified: December 16, 2016

The last thing you want to do is frantically run up to your boss asking “How many allowances do I claim on my W-4?”.

Being aware of the number of allowances you are claiming on a Form W-4 [Employee’s Withholding Allowance Certificate]  is important for a variety of reasons. Most importantly, the number of allowances you claim on a W-4 determines the following;

  1. how much tax will be taken from your income (aka the withholding amount)
  2. the size of your tax refund

Steps to filling out a W-4

You’ll need to following four simple steps when filling out your W-4 Form:

  1. Fill out your personal information (Name, Date of Birth, Address, Marital Status)
  2. Know the number of personal and dependency exemptions you are claiming on your tax return.
  3. Based on the number from step 2, use that number to help determine your number of allowances.
  4. Don’t forget to sign the W-4 and turn it into your employer!

The allowances you claim while filling out a W-4 if you are single will differ from the allowances you claim if you are married or have kids.  (more…)

What to do with a 1095-A, 1095-B and 1095-C

Posted by Michelle O'Brien on March 22, 2016
Last modified: March 22, 2016

An apple a day keeps the doctor away…just not from your paychecks.

There are new tax forms that you should keep your eyes peeled for this year. These are the 1095-A, 1095-B and 1095-C. No need to panic. These forms are mainly for your reference and can be stowed away with the rest of your tax documents until you’re ready to file a tax return for the year. So why are they making a debut in a mailbox near you? Let’s take a look at what they are and how to handle them.

What is each form?

A 1095-A is your Health Insurance Marketplace statement. This provides you with the annual information about your health coverage if you or someone in your family was enrolled in coverage through the Health Insurance Marketplace.

A 1095-B is your Health Coverage statement. This shows you the yearly information about your health care coverage if you, your spouse or your dependents were enrolled in coverage through an insurance provider or self-insured employer.

A 1095-C is your Employer-Provided Health Insurance Offer & Coverage statement. This form will provide you with the yearly coverage offered to you through your employer.

Which form will I get?

You’ll receive a 1095-A if you, your spouse or your dependent(s) were enrolled in health coverage for the year through the Marketplace.

A 1095-B will be coming your way if you and/or your family members received insurance through a health insurance provider. Health insurance providers consist of insurance companies, certain self-insured employers and government agencies that run Medicaid, Medicare or the Children’s Health Insurance Program (CHIP). (more…)

The 5 Ws of a 1099-K

Posted by Michelle O'Brien on March 1, 2016
Last modified: October 6, 2016

Don’t let your 1099-K stand in the way of business.

If you’re an Uber driver, run an Etsy shop, or rent out your home to AirBNB frequenters, then you might notice a new tax form that has found it’s way into your mailbox in recent years.

It’s nothing to stress over. This is generally a straightforward form to review, and easy to report on your tax return.

What is a 1099-K?

Form 1099-K, otherwise known as Payment Card and Third Party Network Transactions, is one of the more recently introduced tax forms. It was created by the IRS in order to report income received from online electronic payments (e.g. credit cards, PayPal, debit cards, etc.) through third party processors. Prior to this form, many independent contractors who used online payment methods were left confused on how to report those sales on their tax returns.

Who gets a 1099-K?

Wondering if you’re one of the lucky ones who will get a 1099-K this year? The qualifications are somewhat more specific compared to other forms such as the W-2. With a 1099-K, it is based on sales volume.

Retailers who accept online credit card payments will receive a 1099-K from any business that processed their payments. However, the 1099-K is only mandatory if online processing meets the following stipulations:

  1. Sales volume is over $600 per year via credit card companies.
  2. Sales volume is over $20,000 and more than 200 individual transactions were made via third party processors.

(more…)

When Can I Claim Exempt on My W-4?

Posted by Michelle O'Brien on December 3, 2015
Last modified: October 6, 2016

Tread carefully before claiming exempt on your W-4 form.

Your W-4 is filed with your employer. Based on the amount of allowances and exemptions you claim, your employer will withhold a certain amount of your income from each paycheck to cover taxes owed to the IRS. If you claim EXEMPT on your W-4, it means that no taxes will be taken out of your paycheck throughout the year to cover what you may owe to the IRS. Claiming exempt does not apply to everyone. Let’s find out why.

Am I eligible to claim exempt on my W-4?

If you want to claim exempt on your W-4, both of the following need to be true:

  1. For the prior year, you had a right to a refund of all federal income tax withheld because you had no tax liability.
  2. For the current year, you expect a refund of all federal income tax withheld because you expect to have no tax liability.

If one or both of these are false, then you will not be eligible to claim exempt on your W-4.

Are there any exceptions?

In some cases, claiming exempt is just not an option. Below are some reasons why it may not be for you:

  • If your income is $950 or more and at least $300 of that is from un-work-related income (ie: interest or dividend income), then you cannot claim exempt from taxes.
  • If you plan to claim dependents on your tax return, then you cannot claim exempt from taxes.
  • If you will be itemizing your deductions on your tax return for the year, then you cannot claim exempt from taxes.
  • If you are Age 65+ or blind, you must use IRS Worksheet 1-3 or 1-4 to determine if you can claim exempt.

I’m EXEMPT for tax purposes. How do I report that?

After doing some research and realizing that you are, in fact, eligible to claim EXEMPT on your W-4, you’ll need to report that. On your W-4, leave box 5 blank. If you have an amount in Box 5, that takes precedence over Box 7. (more…)

W-2 or W-4 Form: How Do They Affect My Taxes?

Posted by Michelle O'Brien on May 5, 2015
Last modified: October 6, 2016

Are you confused on what a W-4 form is? How about a W-2?

You’re not alone.

The truth is, most of us don’t look at these complicated IRS forms on a daily basis, so when we do, we’re pretty lost!  However, it’s important to know the difference between a W-4  and W-2 as both impact  how much tax is taken from your paycheck and how big your refund may be when you file your taxes.

When do I need to look at these IRS forms?

W-4: You’ll receive a blank W-4 when you start a new job. As a new employee, you’ll be required to fill out this form.

W-2: Each year, at the end of January, you’ll receive a W-2 from each of your employers. You’ll refer to this form when preparing your tax return. (more…)

Life Changed but your W-4 Didn’t: Why You Need to Update Your W-4 Withholding

Posted by Michelle O'Brien on June 13, 2014
Last modified: October 6, 2016

If you paid a large tax liability bill after filing your taxes, you might want to update your W-4 Form.

Are your friends on a summer vacation (thanks to their tax refund checks) while you’re stuck at home because you were forced to write a check for your tax due?

If you ended up writing a large check to the IRS for the total of your tax liability, it’s good to know that you’re (somewhat) in control of  what that total will be next year. Surprisingly, it isn’t some randomly generated number, nor is it based on luck. In fact, it’s linked to the number of allowances listed on your W-4 form. That means, you’ll want to take a look at the number reported on your W-4 Form.

What a W-4 Form Is & How it Affects your Tax Refund

For those of you unsure of what a W-4 form is- it’s one of the forms you were handed upon your first days of employment at your job. To be more precise, a W-4 form is used by your employer to determine the amount of taxes to be withheld from your pay. The number of exemptions claimed on it directly affects your tax refund or tax due.

(more…)

Help Filling Out a W-4

Posted by Michelle O'Brien on August 14, 2013
Last modified: October 6, 2016

Your W-4 is an important thing to get right because it ultimately decides how big your tax refund is – or if you owe the IRS money

If you are an employee, you pay income tax through withholding – tax money your employer takes out of your paycheck each pay period.

You can determine how much gets taken out by filling out Form W-4 [Employee’s Withholding Allowance Certificate]. If too much gets taken out, you will receive a refund when you file taxes. If not enough is taken out, you will have to pay the IRS.

You will be asked to fill out a W-4 when you start a new job. But you can also fill out a new W-4 any time if you wish to adjust your withholding. You should especially be sure to do so after major life events such as getting married or the birth of a new child.

How to Fill Out the Form

The first part of the form should be easy enough. It’s just your personal information: name, address, social security number, etc. (more…)

Release of Dependency Exemption – Form 8332

Posted by Michelle O'Brien on March 25, 2013
Last modified: March 28, 2016

This form can release a child’s dependency exemption to the noncustodial parent

Children can be a great boon to your tax situation, because they often mean a larger refund. But in cases of divorce or separation, children can also make tax returns much more complicated than they would be otherwise.

In these cases, certain decrees or settlements may necessitate the custodial parent signing over the child’s dependency exemption to the noncustodial parent.

In order to do this, you must file Form 8332 [Release/Revocation of Release of Claim to Exemption for Child by Custodial Parent].

Use this form if you are the custodial parent and you want to (more…)