Because taxes can be a little intimidating and confusing at times we’re going to walk you through the W-2 and 1099 forms to let you know why they’re important so you can get on your way to tackling your taxes like a pro.
All About Your W-2
A W-2 is basically the form used by the IRS to collect wage and salary information on employees. It reports the amount of federal, state, and other taxes withheld from paychecks throughout the year. They can’t be transferred between different companies, which is why you receive a W-2 from every place you earned a paycheck during the previous year.
What you may not know is that you actually pay the IRS all year long with your tax withholdings. Your employer completes this process for you in the background and this system was put in place so that people could slowly pay their taxes over time because the majority of people can’t pay the full amount they owe by April 15th.
Your W-2 will allow you to see the amount of withholdings from your check that went to the IRS and you need to subtract that amount from the amount of taxes you owe while filing your federal and state tax returns. Doing so allows you to see if you’ll owe more money, or if you’ll get a return.
Please Note: Only employees receive W-2s, Independent contractors and those who are self-employed receive a form 1099, otherwise known as an earning report.
And Your 1099
The purpose of the form 1099 is to report various different types of income, it isn’t limited to those who are self-employed or independent contractors. There are many different types of form 1099s that cover everything from Acquisition of Abandonment or Secured Property to Social Security Benefit Statements.
Now your employers have to give you your W-2s, but the person who paid you is required to give you your 1099. If you don’t think you’ll receive your form 1099 in time contact the IRS, because the form 1099 lists what is considered to be taxable income. It needs to be filed with your federal and state returns to figure out the amount of money you owe the IRS, or the find out the amount you’ll receive as a tax return.
If You Need More Time
If you’ve found yourself in a quite the pickle and can’t file your W-2S or 1099s right now you can file an extension for them.
Simply file a form 8809. However, keep in mind that form 8809 isn’t an automatic extension. You’ll have to provide a valid reason to the IRS for needed an extension that the IRS may or may not approve.
If your extension is approved you’ll won’t hear anything from the IRS and you’ll have 30 extra days to file your W-2s and 1099s. However, this isn’t an extension on paying your taxes, just for filing them, so be sure to pay a tentative tax, or expected amount of money you owe to the IRS before the January 31st deadline.
E-file with ExpressExtensions
ExpressExtensions provides a convenient location for your to file form 8809 and others online. We have step by step instructions you can follow to correctly file your extensions and will send you an email if the IRS rejects your extension with notes on how to correct your form. Plus, you can contact our dedicated support team with any questions that you may have.