Don't Mess With Taxes

If past years are any indication, when the 2020 tax filing season officially opens on Monday, Jan. 27, millions of taxpayers will hit the send button to electronically deliver their annual returns to the Internal Revenue Service.

But millions more of us have to wait to file.

We're still waiting on at least one tax statement that has information we need to finish filling out our Form 1040.

Form deadline is Jan. 31: Technically, most of these tax documents aren't even required to be on their way to us until Jan. 31.

Employers and other businesses that issue wage and/or independent contractor earnings statements don't have to get the statement en route to workers until Jan. 31.

That's next Friday, a full work week after the start of filing season.

Thankfully, our digital lives mean that we don't have to wait for the added potential snail mail slowdown.

Instead of sending these forms out via the U.S. Postal Service, most companies, employers, banks and other financial institutions now send the notices, tax and otherwise, via e-mail or ready to download at their websites.

So if you're still waiting for a tax document, check your inbox or the online source.

Myriad forms to find: OK, you know when and how you can get the statements necessary to file your 1040. Now for the what.

Here's a listing, mostly in numerical order, of some of the more popular tax information documents that will be online or filling both curbside and computer mail receptacles in the next few days. The bold-type titles are, in most cases, links to IRS' tax year 2019 form.

Also note that a few of these statements don't have to be sent until later and those alternate deadlines are indicated in the descriptions of the statements.

W-2 — This is the tax form that most folks anxiously await. It's the wage statement from your employer (or employers, if you hold more than one job) that details how much money you made, how much income tax was withheld, the amounts taken out for Social Security and Medicare, and contributions to workplace benefit programs, such as 401(k) and similar retirement plans, medical accounts and child care reimbursement plans.

W-2G — If you're lucky, you'll get this earnings statement. It's specially designed to reported gambling winnings. It's sent to winners who get:

• $1,200 or more from bingo or slot machines,
• $1,500 or more in winnings (reduced by the wager) from keno,
• More than $5,000 in winnings (reduced by the wager or buy-in) from a poker tournament,
• $600 or more in gambling winnings (except winnings previously noted) and the payout is at least 300 times the amount of the wager, and
• Any other gambling winnings subject to federal income tax withholding.

1095 form series — These forms were created to report Affordable Care Act data. However, political battles over the health care coverage popularly known as Obamacare have changed some things.

Starting in 2019, the Tax Cuts and Jobs Act (TCJA) eliminated the individual mandate penalty. That's the amount that previously was added to your taxes if you didn't have what was deemed adequate insurance coverage. However, the TCJA did not do away with the associated Obamacare reporting requirements. By law, the forms still must be issued.

That mean you might get at least one of the 1095 series insurance coverage tax statements listed below even though you don't need it/them for federal filing purposes to document your 2019 tax year (and beyond…for now) medical coverage and avoid the now-gone federal penalty.

Note, however, that while the federal enrollment mandate and penalty is gone, some states still require their residents to get medical coverage or pay a price.

Due to the TCJA changes, the IRS has extended some of the deadlines for issuing these forms. State deadlines, however, could be different.

So basically, just keep your eyes open for these forms. You'll need the A version to reconcile or claim any ACA premium tax credit (PTC) you got in advance or are eligible to file for on your return. The B and C versions are informational and you can simply store them with your other tax records for the year.

• Form 1095-A, the Health Insurance Marketplace Statement, debuted for the 2015 tax year. Per its name, it is sent by the exchanges where individuals purchased their medical coverage. As noted, use its data in connection with PTC claims.
• Form 1095-B is issued by health care insurance issuers or some smaller companies that provide coverage for employees. It confirms that you had workplace-provided healthcare that met the ACA's acceptable minimal health insurance coverage standard. It also shows how long you were covered and which family members also were on your policy.
• Form 1095-C is the same as B, but is issued by large employers.

1098 — This form lists how much mortgage interest a homeowner paid on the loan. In most cases, this amount is fully deductible. The IRS has an official 1098 form (that's what the 1098 link will show you), but most lenders tend to use a substitute document that contains the same data.

This form also includes another key itemized tax deduction, the amount of real estate taxes on the property that the mortgage lender paid on your behalf the previous tax year. By now, homeowners know that the TCJA has limited the deductible amount of property and other state and local taxes (SALT) to $10,000.

1098-E — The interest paid on your student loan is reported on this form and is sent by your lender it the interest tally is at least $600. You may be able to deduct this interest and possibly other loan-related amounts, such as origination fees and capitalized interest.

1098-T — Universities issue this tuition statement to students. It shows the amount of qualified education expenses the college kid paid. The info is needed to help in the claiming of education-related tax benefits, such as the American Opportunity or Lifetime Learning tax credits.

1099-INT — You'll get one of these forms for each savings, CD or other investment account in which you earned more than $10 in interest. Even if you reinvested the interest instead of receiving it as a cash payment, it still counts as taxable income.

1099-DIV — Earnings from stocks and mutual funds are reported here, including dividends and capital gains distributed that are more than $10. As with reinvested interest, if you used the dividends or distributions to buy more shares, 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. It will detail the number of shares sold, when sold and the amount of the sale. Since 2011, brokers also have been providing information on the basis (the cost of an asset plus some adjustments) of sold stock. This information, along with the date you bought the shares and the amount you paid for them, will help you figure your taxes on your profit. 1099-B forms are due to investors by Feb. 15. Since that day this year is a Saturday and the following Monday is the federal Presidents Day (technically Washington's birthday) holiday, brokers have until Feb. 18 to deliver this form.

1099-G — When you get a refund of state or local taxes, you'll get this form. If you claimed those taxes as an itemized deduction on your previous year's federal tax return, you must report the 1099-G amount as income in the year received.

1099-K — Payments you got via credit or debit cards or from third-party payment processors, such as Uber, Lyft, PayPal, Amazon and eBay, will be reported on this form. There are triggers for amounts ($20,000) and number of transactions (200), so not every person who receives such payments will get a 1099-K. This income, however, is taxable and should be reported even without issuance of a 1099-K.

1099-MISC — Self-employed individuals, aka independent contractors, should a separate 1099-MISC from each client from which they earned $600 or more. This roughly is the self-employed version of a W-2 without, of course, any taxes paid via withholding. These should have been paid via estimated taxes.

1099-R — If you received a pension or a distribution from an individual retirement account or workplace retirement plan, you'll get a Form 1099-R with those details. The form is issued by your broker, pension plan manager or mutual fund company. Even if you rolled the retirement money into another employer-provided 401(k) plan or an IRA, you'll still get a 1099-R. The form has several boxes that differentiate any taxable amount from the gross (total) distribution amount. You'll also get a 1099-R if you converted a traditional IRA to a Roth IRA. Again, a rollover usually is not a taxable event, but a pension payout may be.

The 1099 forms discussed above are the most commonly issued versions of this tax statement. However, there are many other 1099s with other appended letters. You can more about the various 1099s, what triggers their issuance and when each form is supposed to be supplied to you in my earlier post on the many versions of IRS Form 1099.

5498 — Any contributions you make during the tax year to any individual retirement account 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 that were recharacterized from one type of IRA to another. 5498 forms or statements showing an account's fair market value or required minimum distribution (RMD) data are due by Jan. 31. However, 5498s with information on your contributions to such accounts aren't due to you by until May 31. Since that's a Sunday this year, this form is due to you by June 1. The IRS also says, however, that the issuer should make the retirement account's fair market value (FMV) and, if applicable, required minimum distribution (RMD) information available by Jan. 31.

5498-ESA — This account reporting form has details on contributions to Coverdell Education Savings Accounts, formerly known as Education IRAs. The youngster named as beneficiary of the Coverdell should get a copy of this document by April 30.

Schedule K-1 — If you got 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 financial arrangements, account managers tend to send out K-1s later in the tax season, often not until well after the April tax return filing deadline.

That's why filers who get K-1 forms usually file another popular piece of tax paperwork, Form 4868, Application for Automatic Extension of Time to File. This gets you six more months to get your K-1 and any other tax statements you need to fill out your Form 1040.

Substitute forms acceptable: The tax docs reviewed and linked (for the most part) in this post are the official IRS versions. You, however, probably will get a slightly different looking document.

That's OK. The IRS gives companies leeway to use statements that fit their software and system.

Just look for the notation on the reporting document of the form number you're expecting, as well as its identification as a "substitute" tax statement.

Double check data: Regardless of what format your statements take, be sure to double check them as soon as they show up in your snail mail or email box.

If you find a discrepancy against your own records, call the payor and get an explanation. By catching any mistake early, you'll be able to get the correct information in plenty of time to accurately file your tax return by the April deadline.

You also might find these items of interest:

• 6 reasons to file your taxes early or wait to file
• 10 reasons to file a tax return even if you don't have to
• 2019 tax return filing checklist, including the documents itemizers need to fill out Schedule A

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