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The Most Common Tax Forms & Their Meaning
The most commonly used tax forms can often be confusing - W4, 1040, W9, W2, 1099 - with a slew of letters and numbers, we are often asked as Denver tax preparers how one is ever supposed to fully understand the difference between these forms, when to use them, and what they mean.
We thought no better opportunity than a post to our website about these forms and how to differentiate between them.
W4: The form you fill out upon starting a new employment venture/job - it tells your employer how much to withhold from your paycheck for taxes. You can always fill out a new W4 at anytime if you want to change/adjust your withholding amount.
W9: If you are self-employed and/or a freelancer and contractor, this form is one that clients or companies you work for may ask you to fill out - it contains your basic contact information and social security number.
W2: This form is recevied at the end of the year from your current employer by Mid-February. It shows how much you earned and paid in both fedral and state income taxes and Social Security. It will also detail your 401K amounts you paid, if applicable.
1099: Yet another form that will be sent to you at the end of the year from companies or clients who hired you as a contractor. It summarizes the amount of money the company or client paid you, which you then have to pay taxes on.
1040: The most basic tax form everyone fills out in order to give the IRS the whole gist of your tax situation. There are 3 different kinds of 1040 forms, tailored to your tax situation. Consult a Denver tax expert and professional, such as us here at Bloch, Rothman & Associates, LTD. for more clarification on which 1040 form you should be using.