There are as many types of taxes as there are countries. At the request of U.S. investment immigration applicants, WorldWay immigration experts provide an introduction to U.S. tax forms for individuals and families to help new immigrants prepare their tax planning in the United States.
U.S. Tax Forms -
What are 1040EZ, 1040A, 1099, and W-2?
Can you distinguish between 1040EZ, 1040A, 1099, and W-2 forms? U.S. tax laws are not only complex, but the various tax forms can also be confusing. Filling out the correct form is not only an obligation but can also help you receive your tax refund smoothly. If you are truly unsure about which tax form to choose, the Internal Revenue Service (IRS) has published several tax booklets, among which "U.S. Tax Guide for Aliens" (Publication 519) and "U.S. Tax Treaties" (Publication 901) can quickly help you understand the basics of tax filing.
Regardless of whether you are a citizen or a foreign national holding various types of visas, as long as you have income in the United States, you must file a tax return. Before the end of January each year, taxpayers will receive wage and income statements from their workplaces. Full-time employees receive Form W-2, which records the total income as well as the amount of personal income tax and social security tax withheld.
In addition, for those who work from home or part-time, if you are single with no children, you only need to use Form 1040EZ; those with children use 1040A; and those who own a home and pay a monthly mortgage must fill out the most complex Form 1040. These 1040 forms are only the main forms, and there are many other supplementary Forms and Schedules.
Simply put, everyone must fill out the basic tax return Form 1040 (or 1040EZ or 1040A), in addition to other accompanying forms.
1. Form 1040
Form 1040 is the U.S. Individual Income Tax Return. This is the basic form that taxpayers use every year. If your tax situation is not complex, you can use Form 1040A or 1040EZ. Form 1040A is a simplified version of Form 1040, the U.S. Individual Income Tax Return.
1040EZ: This type of tax return is for those who are single or married filing jointly and have no dependents. 1040EZ is also the most simplified tax form for reporting personal income. Taxpayers can choose this form if they have no tax deductions, do not need to adjust their gross income, have only pure wage income, interest, or unemployment compensation, and have no dependents.
If you choose to file your taxes using the traditional paper-based method, the IRS recommends that you use the simplest tax form. 1040A: Includes several items not found on the 1040EZ form. If you use itemized deductions or report multiple complex investment incomes and other income, you must use the standard 1040 tax form. If your taxable income is less than $50,000 and you do not claim tax deductions, you can use this tax form.
In addition, the list of schedules used with Form 1040 includes:
Schedule A: Itemized deductions.
Schedule B: Report taxable interest or dividends in excess of $400.
Schedule C or C-EZ: Report profit or loss from a business.
Schedule D: Report capital gains and losses.
Schedule E: Report supplemental income and losses.
Schedule EIC: Claim earned income tax credit.
2. Form W-2
Usually, the W-2 format is a statement of wages and income tax that you receive from your employer. Taxpayers should receive a W-2 from each employer at the beginning of each year, listing the income earned in the previous year. If you have not received a W-2 form by February 1st, you should proactively contact your employer.
W-2: Reports wages, tips, advance earned income credit, dependent care benefits, employer-provided medical savings accounts (MSA), and Health Savings Accounts (HSA).
W2-G: If you are lucky and win a large sum of money at a casino, you will receive a W-2G form for gambling winnings. Many people forget to report their income from casinos and lotteries. Do not forget that this money is subject to tax. However, gambling losses can also be used to offset income on your tax return.
3. Form 1099
Form 1099 is a large family. If you have investments, you will receive other forms numbered 1099. For example, if you have fixed deposits in a bank, you will receive a 1099-INT form sent by the bank. If the stocks you purchased pay dividends, you will receive a 1099-DIV form. If you sell stocks and other securities for a profit, you will receive a 1099-B form.
