Americans know to lookout for their W-2s every January — and freelancers are well-acquainted with the good old 1099-MISC form. But there's often other paperwork coming in the mail that's necessary for filing a complete tax return. Here are 10 forms people often don't realize need to go to the Internal Revenue Service by April 15.
1. Form 1095 to prove you had health insurance
The federal tax penalty for foregoing health insurance is in effect for one more year. That means, you'll have to file a 1095-A (for marketplace shoppers), 1095-B (for small business employers) and/or a 1095-C (for Americans with employer-provided coverage) to demonstrate you had a health care plan for each month of tax year 2018. If you went longer than three months without health insurance, you could face a fee.
2. Form 1099-C for cancellation of any debts
Unfortunately, the IRS treats most cancelled debts over $600 as taxable income. If you negotiated and settled with a creditor, had property repossessed or got some mortgage debt forgiven through restructuring, expect a 1099-C in the mail. If the cancellation is accurate, the IRS requires you to report it as income. Learn more about America's most dreaded tax form.
3. Form 8889 for HSA holders
Health savings accounts, which help people with high-deductible health care plans cover out-of-pocket medical expenses, have several tax advantages. However, you'll need to file Form 8889 if you're using one. That paperwork allows you to deduct your HSA contributions, report distributions and calculate any tax you must pay on withdrawals for non-qualified medical expenses.
4. Form 5329 for retirement account withdrawals
If you're under age 59-and-a-half and you take money from a 401(k), IRA or other qualified retirement plan, you need to file a Form 5329. Those contributions count as taxable income. Plus, you'll pay a 10% penalty on early withdrawals with a few notable exceptions. You need to file the form, even if your withdrawal is tax-exempt.
5. Form 8880 to get the Saver's Credit
Low-to-moderate-income taxpayers are eligible for the Saver's Credit, a tax break meant to encourage contributions to an IRA or employer-sponsored retirement plan. But very few Americans apply for the break — mostly because they don't know it exists. Only 36% of workers are aware of the credit, according to a 2018 survey from Transamerica Retirement. To get the Saver's Credit, you need file Form 8880. It'll help you determine eligibility based off your Adjusted Gross Income (AGI).
6. Form 1040-ES for full-time freelancers
All new full-time freelancers: You're generally expected to pay quarterly estimated taxes if:
- You expect to owe at least $1,000 in tax for 2018, minus your withholding and refundable credits.
- You expect your 2018 withholding and refundable credits to be less than the smaller of: 90% of the tax you owe or 100% of the tax you owed in 2017.
You can do so via form 1040-ES.
7. Form 4868 for a tax extension
If you're having trouble getting your tax returns done by the April deadline, you can ask Uncle Sam for an extension. Use Form 4868 to apply for an extension up to six months. Big caveat, though: A tax extension only gives you extra time to file your paperwork. You still owe by April 15 and will face late fees and penalties if you don't get an estimated payment in on-time.
8. Form 433-D if you can't pay your tax bill
If you wind up with a tax bill you can't afford, you can enter into an installment payment agreement with the IRS. You'll need to file Form 433-D to finalize the agreement.
9. Form 1040X for mistake makers
If you need to correct your filing status, number of dependents, total income, or claim a missed deduction or credit, the 1040X is your go-to form. Here's a full explainer on how — and when — amend your tax return.
10. A new W-4
If you owe big in 2018 or, conversely, wind up with a huge refund, it's time to rethink how much money is coming out of your paycheck through the year. Sure, large tax refunds are nice, but they essentially mean you gave Uncle Sam an interest-free loan all year round. Use the IRS' calculator to identify how much of each paycheck you should set aside for taxes, then file out a W-4 to direct your employer accordingly.
By the way, if you do receive a big tax refund, here are 8 adult ways to put that money to work.