As tax season rolls around, you may be shopping around to find the best tax expert for you. Ultimately, there are two broad categories of taxes: personal and business. Within these, there are sub-categories that may be confusing the first time around. Today, we break down the basics of the different types of tax forms.
Form 1040 has been simplified since 2018 and now encompasses many of the different previous versions of Form 1040. This is your individual tax form for personal taxes. Within the 1040 form there are a number of different schedules you may need to additionally fill out.
Schedule 1 applies if you have additional income or deductions you’d like to claim. According to the IRS.gov website, additional income includes “unemployment compensation, prize or award money, gambling winnings”, and deductions include “student loan interest deduction, self-employment tax, educator expenses”.
Schedule 2 is for any other types of taxes you’d like to claim such as household taxes, self-employment tax, IRA taxes, or more.
Schedule 3 is for anything else you’d like to claim including “foreign tax credit, educational credits, and business credits”.
If you have any questions about what you can claim, book an appointment with us at Practical Accounting Solutions.
For more information on Form 1040: https://www.irs.gov/forms-pubs/about-form-1040
Form 990 is for organizations that are 501(c) tax-exempt organizations, nonexempt charitable trusts, or Section 527 political organizations. Similarly to the other tax forms, there may be additional forms to fill out dependent on the situation. Some of these situations depend on gross receipts, support organizations, and donor-advised funds. With so many moving parts, it may be beneficial to contact an accountant to help ensure you save the most money possible and take maximum advantage of deductions you qualify for.
For more information about Form 990: https://www.irs.gov/forms-pubs/about-form-990
Form 1065 is for partnerships. In partnerships, the partners themselves do not pay tax on the income, but profits and losses flow through the partnership to the partners. If you’re a farmer or agricultural employer, be on the lookout for special revisions. You can find those here. If you are a domestic or foreign partnership, this is the form you will submit. There are a few special schedules in this form to note, too, so ensure you have all the information necessary before you send in your return!
For More Information about Form 1065: https://www.irs.gov/pub/irs-pdf/i1065.pdf
Form 1120-S is your tax return for S-corporations. There are a few special schedules in this form to note, too, so ensure you have all the information necessary before you send in your return!
For More Information Form 1120-S: https://www.irs.gov/pub/irs-pdf/i1120s.pdf
Form 1120 is for corporations. The IRS provides additional guides for navigating corporations with travel, gifting, and entertainment expenses.
For more information about Form 1120: https://www.irs.gov/forms-pubs/about-form-1120
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