Feeling overwhelmed by tax forms? You’re not alone! At JCT Tax Solutions, we’re here to help you navigate tax season with confidence. Tax season doesn’t have to be stressful—with the right guidance, you can understand which forms apply to your situation and how to complete them correctly. Let’s break down these forms into simple, manageable pieces so you can approach filing with peace of mind, ensure compliance, and claim every dollar you deserve on your refund.
Note: This article is being posted in June of 2025 – the 2025 version of the 1040 has not yet been released, so we’re going over the 2024 version (which you used to file your tax return that was due April 15, 2025). There is always the possibility of changes from one year to another, so be sure to read through the instructions and double-check any information before relying on it in your tax return. Always remember, information provided in this blog is general in nature and has not been customized for your tax situation – if you’re in need of assistance, you can schedule a consultation here.
Form 1040: The Foundation of Your Tax Return
Think of Form 1040 as the hub of your tax return—almost everyone needs to file this form. It’s where all your tax information comes together. There are plenty of other supporting forms you may need to file to get the values to put on Form 1040, but this is where the core of the tax return operates from.
Who Needs to File Form 1040?
You’ll need to submit Form 1040 if you:
- Are a U.S. citizen or resident with income above certain thresholds
- Need to report income, claim credits, or pay taxes
- Want to receive refunds for taxes you’ve already paid
Really, it’s easier to talk about who doesn’t have to file a 1040 – and that’s covered in more detail in this blog.
Your Filing Status and Personal Information
The very first section is for your name, address, social security number (or ITIN), and other identifying information. There is also a box to check if you and/or your spouse (if filing jointly) wish for $3 to go to the Presidential Election Campaign Fund. These funds are distributed to individuals who are campaigning for the Presidential office – but don’t worry, this money won’t increase the tax you owe or reduce the amount of refund you get!
The next section is filing status – and this is an important choice. You’ll choose one of these:
- Single
- Married filing jointly (MFJ)
- Married filing separately (MFS)
- Head of household (HOH)
- Qualifying Surviving Spouse (QSS)
In general, your status on the last day of the tax year (December 31st) is the status that determines your filing status. If you’re unmarried and have no dependents, you’ll likely file as single. If you are married, the vast majority of the time Married Filing Jointly will provide better benefits than Married Filing Separately, but this can vary depending on your situation – and you may choose to file separately for non-tax related reasons as well (such as student loan repayment under income-based repayment plans).
Remember: If either spouse wishes to file separately, both must file separately – Married Filing Jointly is only available if both spouses agree. Head of Household is for an unmarried individual with dependents – it provides a higher standard deduction and different limits than single to account for having a dependent. Qualifying Surviving Spouse is for people who have dependents and recently lost a spouse.
There’s a lot more detail to each of these statuses. The good news is the IRS provides a tool that you can use to answer some questions and find the status that applies best to your situation: What is my filing status?
The next question is on digital assets – if you received any digital assets as a reward or payment, or sold digital assets through the year, you will need to mark this as a Yes. Digital assets include things like Cryptocurrency and NFTs. Long story short: Just because it isn’t cash doesn’t mean it isn’t taxable! If you received rewards from cryptocurrency staking, learning rewards from cryptocurrency platforms, or sold that monkey NFT you had gotten – you’ll need to recognize that income in the appropriate sections.
The Standard Deduction section is less about whether or not you’ll take the standard deduction, but more about how much of one you’ll be entitled to. If you and/or your spouse could be claimed as a dependent on someone else’s tax return, you’ll need to mark the appropriate boxes. If you are married filing separately, and your spouse is itemizing their deductions – you’ll need to itemize yours too. Also in this section are boxes to check if you and/or your spouse are 65 or older or are blind, as you’ll qualify for additions to the standard deduction for those.
The Dependents section comes next – you’ll provide information about them in this section. Keep in mind, dependents do not always need to be your children, and they don’t always need to live with you. If they get more than half of their financial support from you, and have less than $5,050 in gross income, you may be able to claim them.
In general, dependents can only be claimed by one person, and there are tiebreaker rules in place for situations where there may be disagreement (such as situations where parents have divorced and the children spend 50% of their time with each parent). Make sure you have good documentation, and if you are divorced, make sure your custody arrangements are documented in the divorce decree.
If needed, the custodial parent can use Form 8332 to allow the non-custodial parent to claim the child as a dependent – otherwise in general, the custodial parent (or the parent with whom the child has stayed for more than 1/2 of the year) will get to claim the dependent. There are lots of detailed rules here – if you find yourself in this sort of situation, it’s worth getting a tax professional involved.
Also, just because they are your dependent doesn’t mean they will qualify for all of the tax breaks (i.e., a Qualifying Relative may be able to be listed as a dependent, but you likely won’t be able to claim a Child Tax Credit for them).
Your Income (Lines 1-15)
This is the big section where you get to list all of the money you earned for the year. If you had a job, it’s pretty clear – that’s income. If you owned collectibles and sold them for a profit, only the amount of profit will count as income – not all of the money you received. Make sure you have good records if you’re in that sort of situation. If you lent someone $100 and they paid you back the $100 – that’s not income. If you lent someone $100 and they paid you back $125, you had $25 of income from that transaction. Let’s get into it:
Wages & Salaries (Line 1): This is the income from your W-2 forms—what you earned from employers. The total amount from all of your jobs ends up on line 1a. If you worked as a household employee (think chef, nanny, housekeeper, etc.), you can report that income on line 1b. There are special rules for household employees, so you may need to dig deeper into this if it applies to you. If you had a job where you earn tips and those tips were not reported to your employer, those should be reported on line 1c. Yes, cash tips are reportable – even if there isn’t a paper trail to prove it.
Once we get past 1c, we get to some less common items:
- 1d – Medicare waiver payments not reported on form W-2
- 1e – Taxable dependent care benefits (you’ll calculate this on Form 2441)
- 1f – Employer provided adoption benefits (you’ll calculate this on Form 8839)
- 1g – If you had a job where your employer classified you as an independent contractor rather than an employee (meaning they sent you a 1099 or no forms instead of a W-2), and you believe that classification was incorrect, you would complete Form 8919 to determine how much Social Security and Medicare tax wasn’t collected – but then the wages you’re reporting would flow through to line 1g here.
- 1h – Other earned income – you earned income but there wasn’t a form for it, or it doesn’t belong anywhere else
- 1i – Nontaxable combat pay election
Then line 1z is where you add up 1a-1h.
Interest Income (Line 2): Money earned from bank accounts, CDs, or bonds, typically reported on 1099-INT. If it’s tax exempt, it goes in 2a (things like municipal bonds or treasury bonds) – if it’s taxable, it goes in 2b. If you had over $1500 of taxable interest, you’ll need to do Schedule B – and the total will flow through here.
Dividends (Line 3): Income from your investments in stocks and mutual funds, typically reported on form 1099-DIV. Again, if it’s tax exempt (such as an ETF that holds municipal bonds or treasury bonds) it goes to 3a – otherwise 3b for the taxable portion. If you had over $1500 of ordinary dividends, you’ll need to do Schedule B – and the total will flow through here.
IRA & Pension Distributions (Lines 4-5): Money withdrawn from retirement accounts, which may be fully or partially taxable. If you’re rolling money over from one retirement account to another, and the accounts are the same type (traditional to traditional, Roth to Roth, etc.) – there’s nothing to report.
If you’re converting dollars from a Traditional IRA to a Roth IRA, you’ll pay tax (which may be strategic, depending on your tax situation – if you had a year with particularly low income, you may be in a lower tax bracket, making the tax owed lower than it may be in the future – again, see a tax advisor to see if this is a good idea for your situation). If you’re collecting on your Pension or doing normal retirement distributions from your Traditional IRA – that’s usually taxable.
Social Security Benefits (Line 6): Again, spots here for the taxable and non-taxable portions. Yes, your social security may be taxable if you made over a certain amount of money. States have different rules as well, but we’re just calculating the federal taxable portion here. There’s a worksheet in the instructions for this.
Capital Gains or Losses (Line 7): Profits or losses from selling investments, property, or other assets. Depending on your situation, Schedule D may be required in order to properly calculate this. Don’t forget about things like cryptocurrency or collectibles – those can often be classified as Capital Assets that need to get reported here.
Other Income (Line 8): Additional sources like unemployment compensation, gambling winnings, or cancelled debt. Basically if you still have income left after trying to fill in all of the above categories, it goes here. Use Schedule 1 to help add up some of the less common items for this (it’s actually a fun list to look at – Gambling winnings, Jury duty pay, even the Olympic and Paralympic medal and prize money amounts!)
Total Income (Line 9): Add up all of the taxable income from above, and you have Total Income.
Adjustments to Income (Line 10): If you looked at Schedule 1 when we touched on Line 8, that was for the income side – the second page is for things that can directly reduce your income before we start calculating deductions and tax. This includes things like educator expenses, after-tax HSA contributions, student loan interest, and other items.
Adjusted Gross Income (Line 11): Subtract Line 10 from Line 9. Now you have Adjusted Gross Income, or AGI. This is a number that gets asked for in a lot of places, so it’s good to remember where it’s hiding.
Standard or Itemized Deductions (Line 12): Depending on your filing status and any Age 65+ or Blind checkboxes you marked, you can take a standard deduction for that. This essentially is the government saying “these are the amounts that we expect most people could deduct on their taxes, so we’ll just let you take this – no questions asked”.
If that value isn’t enough for your situation, you can work out the details on Schedule A to itemize your deductions – and then take the amount here. We’ll do a deep dive on itemized deductions in a future article – but if you had significant medical expenses, or you paid a lot in state and local taxes (including property tax), it’s worth a look.
Qualified Business Income (QBI) Deduction (Line 13): If you are an owner of a business that is a pass-through entity (meaning the taxes end up being paid on your return rather than from the business directly), there is a deduction that allows you to get a benefit based on the income of the company. Those would be presented to you on form 8995 or 8995-A.
Taxable Income (Line 15): Line 14 is just adding lines 12 and 13 together, then line 15 is to subtract line 14 from line 11. Basically reduce your adjusted gross income by the deductions we just calculated. This is now Taxable Income. Now we know how much you are being taxed on, so we can calculate the tax.
Tax Calculation Section
Tax (Line 16): Follow the instructions to calculate how much tax you’ll need to have accounted for, based on your Taxable Income. Still some opportunities to improve this, we’re not paying quite yet.
Additions to Tax (Line 17): There are a few items in section 1 of Schedule 2 that you may owe back as taxes – things like repayments of clean vehicle credits, and excess advance premium tax credit repayments. These aren’t common, but are very important if they are relevant to your situation.
Child Tax Credit and Credit for Other Dependents (Line 19): If you are eligible for the Child Tax Credit or Credit for Other Dependents, that’ll flow through here from form 8812. These credits will directly reduce the amount of tax you owe (meaning these will be subtracted from the Tax on line 16) – so these can bring down the tax bill quickly!
Additional Credits and Payments (Line 20): There are some nonrefundable credits that are handled through Schedule 3 that flow through on this line. These include foreign tax credit, education credits, and energy efficiency credits. Again, these directly reduce the Tax that is due – but these are non-refundable, so if you have more credits than you have tax, you won’t get the difference back as a refund.
Other Taxes (Line 23): Basically we’ve got one more opportunity to increase your taxes after you’ve calculated all of the above. This will include self-employment tax from Schedule 2.
Total Tax (Line 24): I skipped some of the math lines above, so we’ll catch them all up here. Line 18 is Line 16 + Line 17. Line 21 is Line 19 + Line 20. Subtract Line 21 from Line 18, but it can’t go below zero. Then we add in the Other Taxes from Line 23, and we have our total tax bill.
Payments (Lines 25-33)
This is where we account for what you’ve already paid in tax throughout the year. The US tax system is a pay-as-you-go system, so this is where the money that was withheld from your paychecks, retirement distributions, unemployment compensation, and other ways all comes back to help. You also add in any estimated payments you made throughout the year.
There are a few credits in this section as well – like the Earned Income Credit, and the Additional Child Tax Credit – these act like payments you already made, so they can actually generate refunds for you. The total payments end up on Line 33.
Refund or Amount Due (Lines 34-37)
If Line 33 is more than Line 24, you get a refund. If Line 33 is less than Line 24, you owe. Simple as that!
If you get too large of refunds back every year, you may consider reducing your withholdings. If you owe too much at this point, you may be subject to a penalty (to keep you honest with the pay-as-you-go system).
If you’re getting a refund, you can enter in your bank account information for direct deposit. If you owe money, you can go to https://irs.gov/Payments for more information – you can have it directly debited from your account, but I think it’s better to send it in right away – that way if your form gets rejected or lost, the payment still gets there – which keeps you out of more penalties for late payment.
Don’t forget to sign and date your return – both you and your spouse (if filing jointly). If you have an Identity Protection PIN, you enter it here as well. To learn more about the Identity Protection Pin, check out this article: IRS encourages all taxpayers to sign up for an IP PIN for 2025 Tax Season
And if you use a paid preparer, make sure they are signing at the very bottom and putting in their PTIN. Paid preparers are required to have a PTIN, and must use it on every return they file. The details may be redacted on your copy (as PTIN theft is a very real thing), but if they are legit, it’ll be on the filed copy. Ask if you aren’t sure, and if they tell you it’s not necessary, find a new preparer.
Special Form 1040 Versions for Unique Situations
1040-SR: The only difference with the 1040-SR is that the font is larger. That’s it! The lines all match up, and it’s not simplified in any way.
1040-NR: If you are a nonresident alien who earned income in the US, you owe taxes to the US on it, and you can use this form to file your return. We’ll do a whole blog on international tax details soon!
Supporting Schedules: The Details Matter
In the above, I’ve mentioned several schedules that become part of the 1040. Let’s take a quick trip through the most common ones.
Schedule A: Itemized Deductions
If your deductible expenses exceed the standard deduction, itemizing could save you money! Schedule A lets you claim:
- Medical expenses that exceed 7.5% of your adjusted gross income
- State and local taxes up to $10,000 (including income and property taxes)
- Mortgage interest on qualifying home loans
- Charitable contributions to qualified organizations
- Casualty and theft losses from federally declared disasters
Not sure whether to take the standard deduction or itemize? We can help you calculate which option puts more money back in your pocket!
Schedule B: Interest and Ordinary Dividends
If you received more than $1,500 in taxable interest or ordinary dividends, you’ll need Schedule B to list these income sources. It also includes important questions about foreign accounts and trusts that you must answer accurately.
Schedule C: Profit or Loss From Business
Are you self-employed or have a side business? Schedule C is where you’ll report your business income and expenses. Keeping good records of your business expenses is crucial—this schedule often receives extra attention during IRS reviews.
Schedule D: Capital Gains and Losses
When you sell investments, property, or other capital assets, use Schedule D to report your gains or losses. The length of time you held the asset matters—long-term gains (assets held more than a year) typically receive better tax treatment.
Schedule E: Supplemental Income and Loss
Schedule E covers income from several sources:
- Rental real estate
- Royalties
- Partnerships
- S corporations
- Estates and trusts
For rental property owners, this schedule allows you to deduct expenses including mortgage interest, property taxes, insurance, maintenance, and depreciation—maximizing your rental property’s tax efficiency!
Schedule SE: Self-Employment Tax
If you’re self-employed, you’ll use Schedule SE to calculate your Social Security and Medicare taxes. Yes, these taxes are an additional responsibility when you’re your own boss, but remember that half of this amount can be deducted as an adjustment to income on your Form 1040!
Depending on your unique financial situation, you might need additional schedules for various types of income, taxes, and credits.
Income Reporting Forms: What Others Tell the IRS About Your Money
The fact of the matter is the IRS knows your situation more than you may realize. For example, employers are required to submit W-2 forms by the end of January to both you and the IRS. Most of the tax forms you receive are also sent to the IRS – so if you ignore them, it’ll likely catch up to you.
The IRS systems take a while to process them, so it may be months before you receive a letter. If you receive a letter from the IRS, be sure to take care of things promptly (and safely!). The IRS will not text you to ask for more money. The IRS always starts with a letter, and you can always call them (at numbers published on their website) to confirm anything you receive.
Let’s talk through some of the most common forms you’ll receive from employers, brokers, educators, and other providers during tax season.
Form W-2: Wage and Tax Statement
Your employer provides this form summarizing your earnings and tax withholdings for the year. Key information includes:
- Total wages earned
- Federal, state, and local income taxes withheld
- Social Security and Medicare contributions
- Retirement plan contributions
- Other benefits and deductions
Employers must provide W-2 forms by January 31st. You’ll need this information to complete your Form 1040 accurately.
Form 1099 Series
These forms report income from sources other than employment:
- 1099-NEC: For freelancers and independent contractors (stands for “non-employee compensation”)
- 1099-MISC: Reports miscellaneous income like rents, prizes, and awards
- 1099-INT: Shows interest income from your banks and investments
- 1099-DIV: Reports dividend income from your investments
- 1099-R: Covers distributions from retirement accounts, pensions, and annuities
- 1099-G: Reports government payments such as unemployment benefits or state tax refunds
- 1099-K: Reports payment card and third-party network transactions, especially important if you have an online business
Form 1098 Series
These forms document expenses you might be able to deduct:
- 1098: Shows mortgage interest you paid
- 1098-E: Reports student loan interest you paid
- 1098-T: Documents qualified tuition and educational expenses
Tax Credits and Specialized Forms: Opportunities to Save!
Form 8863: Education Credits
Use this to claim valuable education credits:
- American Opportunity Credit (up to $2,500 per eligible student)
- Lifetime Learning Credit (up to $2,000 per tax return)
These credits can significantly reduce your tax bill while supporting your educational goals!
Form 8962: Premium Tax Credit
If you purchased health insurance through the Health Insurance Marketplace and received advance payments of the premium tax credit, you’ll need this form to reconcile those payments.
Form 8949: Sales and Other Dispositions of Capital Assets
This form provides detailed information about your capital asset transactions that get summarized on Schedule D.
Form 8959: Additional Medicare Tax
For higher-income taxpayers who are subject to the Additional Medicare Tax.
Form 8960: Net Investment Income Tax
Required for certain high-income individuals with significant investment income.
Smart Tax Document Management: Stay Organized, Stay Confident
Keeping your tax documents organized isn’t just about reducing stress—it’s about ensuring accuracy and protecting yourself in case of questions. Try these practical strategies:
- Create a dedicated tax folder, either physical or digital, to collect and organize forms as they arrive.
- Make a simple checklist based on last year’s return to track expected forms and make sure nothing falls through the cracks. When you open new brokerage accounts, add it to your list. When you change jobs, remember to put your old job and your new job on your list. Don’t file your return until you’ve checked off the whole list!
- Look at your prior year return to identify any recurring forms or schedules you should expect.
- Consider electronic filing options, which typically offer faster processing, fewer errors, and quicker refunds.
- Keep good records. Save tax returns and supporting documentation for at least three years from the filing date (though some situations may require longer).
- Don’t hesitate to ask for help! When facing complex tax situations or big life changes, professional guidance can be invaluable.
Answers to Your Top Tax Form Questions
“When should I expect to receive my tax forms?”
Most information returns, including W-2s and 1099s, should arrive by January 31st. Some investment-related forms might come in mid-February (or even March!) due to their complexity.
“What should I do if a form is missing?”
Contact the organization that should have sent it. If you can’t get the form, you may need to use your own records to recreate the information. For missing W-2s, you can contact the IRS for assistance after February 15th.
Also remember – just because you didn’t get a form doesn’t mean you don’t owe tax.
“How long should I keep my tax documents?”
The IRS generally has three years from the filing date to audit your return, so keep records for at least that long. However, some situations require longer retention:
- Keep property records until at least three years after selling the asset
- Hold onto documentation for worthless securities or bad debt deductions for seven years
- In cases where unreported income exceeds 25% of your gross income, the IRS has a six-year review window
“What if I find errors on my tax forms?”
Contact the issuer right away to request a corrected form. If you’ve already filed your return with incorrect information, you may need to file an amended return using Form 1040-X once you receive the corrected document.
You’ve Got This—And We’re Here to Help!
Understanding your tax forms is a big step toward confident and accurate tax filing. While we’ve covered the most common forms here, your specific situation might involve additional documentation.
Staying organized throughout the year can make tax season so much easier. And remember, when you face complex tax situations or just want peace of mind, our JCT Tax Solutions professionals are ready to help!
Ready to take control of your taxes? Contact our friendly tax experts today for personalized assistance. We’ll help ensure you receive every deduction and credit you deserve!
Call us at (952) 960-9142 or use the Contact page to schedule your consultation.
