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Tax statements you need to file your 2020 return

1099 W2 paper forms_cropped

We got our first tax statement yesterday. It's our mortgage lender's Form 1098 with details on potentially tax-deductible amounts like loan interest and property taxes.

This is just one of the documents that millions of taxpayers are awaiting so they can file their returns. In addition to tax-related home transactions, the various documents that are or soon will be on their way include documents detailing income, be it from wages, contract work or retirement accounts; investments; winnings and/or gambling proceeds; and in some cases, health care information.

A handful of these documents must be submitted with Form 1040. Most, however, are information only. These so-called third-party documents are informational only. The key here, however, is that the information goes to you and the Internal Revenue Service.

That means that if you report the wrong amount, the IRS will discover the difference and you'll get a notice. That could lead to added tax due, as well as penalties and interest charges.

So be patient and make sure you have this material before you file. Most of these documents are due to you by Jan. 31, which this year falls on a Sunday. So the delivery date is pushed to Monday, Feb. 1.

Yes, it's frustrating to wait, especially if you're expecting a refund or need to file for a Recovery Rebate Credit because you didn't get all or any of your COVID-19 economic impact payments last year (or earlier this month). 

But waiting for the documents is the wisest, albeit often frustrating, move.

And remember, your hurry isn't going to help that much this year. The IRS won't start processing any 2020 tax year returns until Feb. 12 anyway.

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 coming days and weeks. The bold-type titles are, in most cases, links to the official IRS documents. Most should be the 2020 tax year versions, but a few might still be being updated by the IRS (hence the late Feb. 12 filing season start), so check back later for official current filing year forms.

Also, most of them are due to taxpayers by Jan. 31 (Feb. 1 this year) unless otherwise noted in the brief discussions of the forms.

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, hence the appended G. 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.

The Republican tax reform bill, the Tax Cuts and Jobs Act (TCJA), eliminated the individual mandate penalty at the start of the 2019 tax year. That penalty was 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 2020 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 (like every bank that's given us a mortgage) 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 this year that's on the federal Presidents Day (technically Washington's birthday) Monday holiday, brokers have until Feb. 16 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. And millions of people will get a 1099-G this filing season for the unemployment benefits they received in the wake of the COVID-19 economic crisis.

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 — If you are used to getting this form for gig or contract work, this year you'll be looking to instead get Form 1099-NEC; it's next in this list. For most taxpayers, 1099-MISC now is used to report rent or royalty payments or prizes and awards, such as winnings from television or radio show contest. It also will go to some other more esoteric payments, such as fish purchases paid in cash for resales; payments to crew members by owners or operators of fishing boats including payments of proceeds from sale of catch; and crop insurance proceeds. One thing stays the same, though. When a 1099-MISC is required, it will be issued when the payment amount is $600 or more.

1099-NEC — It isn't "Welcome" to this form as much as "Welcome back." The IRS this year revived Form 1099-NEC, which was last used in 1982. This old-now-new-again form will be used for the most part to report what I call freelance work performed by self-employed individuals. The IRS' official name for these earnings is non-employee compensation, which explains the NEC designation.

1099-NEC tax year 2020

You should get one if you earned $600 or more from a job. And you should get a separate 1099-MISC from each client that paid you that much. 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.

Notice 1444 — Remember when you got your COVID-19 relief money? Regardless of whether it was delivered on a government debit card, as a paper Treasury check or directly deposited to your bank account, you also should have received a letter with details on the amount. That correspondence was more than what looked like some presidential politicking. It also was an official IRS document known as  Notice 1444, Your Economic Impact Payment. You don't have to send it in when you file, but you do need the info. If you tossed it, track down the amount through other records, such as a bank statement.

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.

Determine the delivery methods: Finally, make sure you're looking for your tax statements in the right places.

If some of them are sent by the U.S. Postal Service, they could (probably will) arrive in your curbside snail mail box after Feb. 1. Give your carrier a few days before you panic.

Nowadays, however, most places have gone digital. Instead of sending paper forms by mail, businesses, employers, financial institutions and the various other third-party tax statement issuers deliver them electronically.

This usually means you get an email notice that your tax documents are ready for you to download from the issuer's website. That's how we got our Form 1098.

So check your email or the appropriated website for your tax-related accounts periodically during the next few weeks.

Tax Forms Fiesta! A quick in-the-weeds blog housekeeping note that I hope all my great readers also will find useful.

Tax Form Tuesday, the feature created last year to spotlight tax documents, has changed. It's been archived (but is still accessible).

That means in 2021, I'm no longer limiting discussion of tax documents to one day. Whenever a tax form or document is relevant or catches my fancy, I'll blog about it, Monday through Sunday.

But I still will aggregate all those form posts on a special page. This year it's called Tax Forms Fiesta! The new name is partly because I like alliteration and partly because we Texans love the fiestas (note the exclamation point in the name) we acquired from our Mexican heritage.

This post, which just happens to have gone up on a Tuesday, is now added to the 2021 Tax Forms Fiesta page. It's also got a couple of other forms I blogged about earlier before I got around to creating the tax form party spot. Check it out and, of course, have fun!

You also might find these items of interest:

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