File Your Taxes Like a Pro: Must-Know Tips About Tax Forms. In this video and in the article below, Philip Herzberg, CFP®, CDFA®, CTFA, AEP®, lead financial advisor at Team Hewins provides tips on important tax forms to know about before filing your 2023 taxes, including:

Form W-2: Reports your income, taxes withheld, and benefit contributions from employers. Ensure the information is accurate.

Form W-4: Determines income tax withholding amounts. Review withholdings when life changes occur or side income is earned.

Forms 1099-INT and 1099-DIV: Report investment income like interest and dividends. This income must also be reported on your tax return.

Form 1099-NEC: Reports non-employee compensation of $600 or more. Replaces part of old 1099-MISC form.

Form 1099-K: Reports income from third-party networks like Venmo. Threshold remains at $20,000 for 2023 after postponed $600 threshold.

Form 1099-R: Reports retirement account distributions. Details taxable amounts and taxes paid.

Form 5498: IRA contribution information for your records. Generated after April 15 deadline.

Form 1098: Reports mortgage interest if payments above $600. Needed for itemized deductions.

Form 1098-T: Reports tuition paid of $600 or more. Helps claim education credits.

Form 1095: Provides health insurance details from marketplace or employers.

File Your Taxes Like a Pro

Article: Must-Know Tips About Tax Forms Before Filing

Tax time means many things to many people, but one thing most of us have in common is the need to gather forms. Here are some of the most important forms you might receive and tips for reviewing them.

By Philip Herzberg

The 2023 tax reporting season is upon us! Before filing your taxes, it’s time to gather all the information you need to prepare your return. Here are essential planning insights for some important IRS tax forms you need to know about this year.

Form W-2 Wage and Tax Statement

This form shows you, as a salaried employee, how much income you made for the year. You should receive the W-2 form by early February from every employer who has withheld income, Medicare tax, and Social Security taxes throughout the year. Also, this form reports how much state and federal income taxes were withheld, along with retirement plan contributions, and the value of some workplace benefits. Be sure to report this information accurately as a copy of the W-2 goes to the IRS.

Form W-4 Wage and Tax Statement

The W-2 has a family member called the W-4 form, which you fill out for your employer so that an accurate amount of federal and state income tax is withheld from your pay. The beginning of the year, particularly when filing your taxes, presents a perfect opportunity to review your current year’s federal income tax withholdings. Adjust tax withholdings when you experience significant life and family changes, such as marriage, divorce, or having children. Starting a side business or second job may lead to higher taxes owed. Consider increasing the withholding at your primary workplace to cover the projected shortfall in taxes. The IRS recently made the W-4 completion process less cumbersome by simplifying it into five steps.

Forms 1099-INT Interest Income and 1099-DIV Dividends and Distributions

Form 1099 reports income, dividends, and gains and losses into separate categories. These IRS forms are all records of income you have received from a source other than your employer. Do not forget to report this income on your tax return, as the IRS receives copies of these forms from the providers. Be on the lookout for Form 1099-INT from your bank, brokerage, or other financial institution if you earned more than $10 in interest for the year. This form will report different types of interest, such as interest on U.S. Savings Bonds and Treasury obligations, interest income from financial institutions, and tax-exempt interest. Dividends, which are an additional stream of income for investors, need to be reported to the IRS. Form 1099-DIV will disclose your qualified versus ordinary dividends, as well as information about capital gain distributions and Section 199A dividends. You can expect to receive your initial Form 1099 around mid-February. Late or corrected 1099s frequently occur when companies and funds reclassify income. It is not convenient but often unavoidable. As companies close their books after 2023 year-end, income and gains can get shifted from one category or quarter to another, altering your Form 1099 totals. If you own securities that tend to generate corrected 1099s, you should seek the guidance of your qualified tax professional about whether you should hold off on your final return until closer to the filing deadline.

Form 1099-Non-Employee Compensation (NEC) and Form 1099-MISC

Form 1099-NEC is used for reporting compensation paid to someone who is not an employee. If you are an independent contractor or freelancer who is paid at least $600 by one client, you should receive a 1099-NEC from that business. Before 2020, businesses used Form 1099-MISC to report non-employee compensation. This form is still around but is no longer used to report non-employee pay. Rather, Form 1099-MISC is used as a catch-all for other types of miscellaneous income, such as rents, awards, and medical payments.

Form 1099-K Merchant Card and Third-Party Network Payments

A 1099-K is an IRS reporting form that shows how much money you have received during the year through third-party payment processors, such as Venmo and PayPal. The forms also come from apps and other online marketplace platforms that process payment transactions, such as eBay and Etsy. When do you receive Form 1099-K? For transactions that occurred during 2023, a $600 1099-K threshold had been scheduled to be implemented. Recently, the IRS notified taxpayers that third-party payment platforms and online marketplaces will not be required to report 2023 transactions on a Form 1099-K to the IRS or online sellers for the $600 tax reporting threshold amount. Rather, the previous 1099-K reporting threshold of $20,000 in payments for goods and services from over 200 business transactions will remain in effect for the 2023 tax year. Be sure the 1099-K reporting matches the information in your records if you receive the form. Contact the third-party payment network that issued the 1099-K if there are discrepancies with the form. Be mindful that a delay of the 1099-K reporting rule does not change the fact that the IRS has always required taxpayers to report all taxable income, regardless of whether you receive a 1099-K form.

Form 1099-R Distributions from Pensions, Annuities, Retirement Plans, and IRAs

If you received a distribution of $10 or more from your retirement, pension, or annuity accounts in 2023, the custodian or provider will issue a Form 1099-R. This form includes the type of distribution you received, the taxable amount of the withdrawal, and how much you have paid in taxes on the distribution. Notably, you do not have to pay taxes on rollovers and loans. Qualified Charitable Distributions (QCDs) from a non-inherited IRA to a qualified charity will also be included on Form 1099-R as a normal taxable distribution. Even though QCDs are reported on your tax return, they will be excluded from taxable income. Notify your qualified tax preparer of the details of any QCDs from your account.

Form 5498 IRA Contribution Information

You should expect to receive Form 5498, which is an informational return sent by your IRA account custodian to the IRS, only if you made contributions or rolled funds into a Traditional, Roth, SEP, or SIMPLE IRA in the preceding tax year. Although Form 5498 contains important information that you should review carefully for accuracy, you do not need to file the form with your taxes or do anything. Be mindful that this form cannot be generated until after April 15th, since you have until the upcoming April 15th tax filing deadline to finalize new contributions to your Traditional or Roth IRA. Similarly, if you did a Roth conversion in 2023 and moved funds from your Traditional to your Roth IRA, you will be receiving a separate Form 5498 after April 15th reporting this transaction. Note that Form 5498 reports total contributions to your SIMPLE IRA account, whether funded with employee or employer contributions.

Form 1098 Mortgage Interest Statement and Form 1098-T Tuition Statement

If you itemize deductions to lower taxable income, do not forget to claim your deduction for your mortgage interest. You should get Form 1098 if you paid $600 or more in mortgage interest. Similarly, if you received at least $600 in mortgage interest during the year as an individual or business, you will need to file a 1098 form. You are accountable for tracking mortgage interest that is less than $600 since your lender is not required to send you a form. With a 1098-T, your college or university reports how much qualified tuition and expenses you or your parents paid during the 2023 tax year. This 1098-T form is important as it may help you claim valuable deductions or education credits come tax time.

Form 1095s Qualifying Health Insurance Coverage

If you received health insurance from the marketplace, you will receive Form 1095-A in the mail or online at HealthCare.gov account. This 1095-A form is needed before you file your tax return. The form includes premium tax credits used and premiums paid. Form 1095-B is issued by employers and others who provide minimum essential coverage. Small employers who offer, but are not required to, will use this form. Employers who have at least 50 full-time employees must send out Form 1095-C to each worker and the IRS. Form 1095-C provides details on who has been offered employer-sponsored healthcare coverage, whether workers have taken advantage of coverage, and if so, the months you were or were not covered by the workplace plan.

Enjoy this video, File Your Taxes Like a Pro: Must-Know Tips About Tax Forms. To see more videos on finStream featuring Philip Herzberg, please click this link: https://www.finstream.tv/featured/philip-herzberg/

About the author: Philip Herzberg

Philip Herzberg, CFP®, CDFA®, CTFA, AEP®, is a Lead Financial Advisor at Team Hewins, LLC, a wealth management firm with offices in South Florida and the San Francisco Bay Area.

Team Hewins, LLC (“Team Hewins”) is an SEC-registered investment adviser; however, such registration does not imply a certain level of skill or training, and no inference to the contrary should be made. We provide this information with the understanding that we are not engaged in rendering legal, accounting, or tax services. We recommend that all investors seek out the services of competent professionals in any of the aforementioned areas. Certain information provided herein is based on third-party sources, which information, although believed to be accurate, has not been independently verified by Team Hewins. Team Hewins assumes no liability for errors and omissions in the information contained herein. Certain information contained herein constitutes forward-looking statements. Team Hewins does not guarantee the achievement of long-term goals in the portfolio review process. Past performance is no guarantee of future results, and a diversified portfolio does not guarantee a positive outcome. Nothing contained herein may be relied upon as a guarantee, promise, assurance, or representation as to the future.