Even though we have taxes due every year, we always have some questions. The tax code changes frequently, and it’s extremely complex. Here are some of the most common tax and tax season FAQs. How Can I Lower My Tax Bill? Far and away, the biggest tax questions are always some variants of “How can I lower my taxes?” and “What deductions am I eligible for?” Tax deductions and credits are the most common way to reduce your tax obligation, whether you are doing your individual or business taxes. The hard part about this question is that it’s different for everyone. A lot of your tax information comes in the form of Information Returns, the forms like 1099s, 1098s, W-2s, and others that show you what your financial activity looked like throughout the tax year. These Information Returns help you fill out the tax forms you need in order to take advantage of many of these deductions and tax credits. eFile360’s top-tier e-filing services offer you a great solution for filling out and storing these forms. What Are This Year’s Tax Changes? Every year, the IRS makes adjustments to the tax laws, processes, and procedures based on the latest government regulations, technology changes, and overall performance during the last tax season. This tax question is one that people are worried about all the time. American taxes are like a high-level puzzle: you have to put all the pieces together, solve the equations, and hopefully submit the right answers. But if the rules have changed, you may be making inadvertent mistakes. The IRS website, specifically their Newsroom, is a great way to stay up-to-date on any and all changes that are coming up during the next tax season. What’s the Difference: W-2 vs. 1099-NEC? The 1099-NEC is one of the newest Information Return forms to be (re)instated. These forms are used to calculate non-employee compensation, including freelancer and independent contractor work. W-2s are given to employees of a business early on during tax …
FAQs About 1098s
There are lots of different 1098s and we wanted to help you better understand them, so we’ve put together this guide of eFile360 resources and FAQs to help you grow your understanding. 1098s: The Basics 1098s are used when you are preparing your federal income taxes, and they describe the financial transactions you or your business made during a calendar year that could affect the filing of your tax return. There are seven different types of 1098 forms: 1098, 1098-E, 1098-T, 1098-C, 1098-F, 1098-MA, and 1098-Q. The most commonly used include the 1098, 1098-T, and 1098-C. For a complete list of these forms and a description of what each form is for, you can read our eFile360 blog article on that topic. To find out which forms efile360 can help you with, check out our supported forms page! How Do I Fill Out Form 1098? When you are filling out and filing your 1098s, you want to be sure you or the tax preparer you have chosen to assist you follows the IRS instructions, which you can find here. Will I Get Two 1098 Forms if I Refinance? Generally, you should expect to receive a single 1098 form per property per year. However, if you have refinanced any of your properties within the current tax year, you will receive two 1098s to reflect the changes instituted before and after the refinance. Filing Form 1098 allows you to report and deduct mortgage insurance premiums from your taxes every year. What Are Some Reasons I Would or Wouldn’t Receive a 1098-T? The 1098-T is issued by colleges and other educational institutions and is used to report how much a student (or their parents) paid in qualified tuition and expenses during the tax year. If you pay interest on student loans, you should get a 1098-T unless any of the following are true: A course you took did not offer academic credit You are a nonresident alien Your school waived your tuition or expenses, or they were fully covered by scholarships Or an employer or government agency …