understanding common colorado tax formsThe year is halfway through, and if you haven’t got to grips with your Denver Taxes, what are you waiting for? A Denver Accountant can help you manage your finances, and year-end tax preparation, but nothing helps an individual or business succeed more than understanding common tax forms and how they should be filled out. Here is a brief rundown of these forms.

W-2

This is the most common of all forms. Anyone who draws a paycheck from a regular employer can expect to see one of these. The W-2 is an information return used by your employer to report wages or compensation paid to you during the year. The form reports your employer's basic information (name, address and tax identification number) as well as your own information (similarly, name, address and tax identification number). The form contains several boxes where different information is collected (wages, local, state, and federal income taxes withheld, amount of income subject to Social Security and Medicare, and so forth. Keep in mind that you'll receive multiple copies of your W-2. Copy B gets filed with your federal income tax returns, and Copy 2 with your state or local tax returns. You should always keep Copy C for your own records.

W-2G

Your denver auditor will tell you you’re lucky – or not! – if you receive one of these, as it will report if you have had more than $600 in gambling winnings during the year. The amounts are higher for keno, slots, and bingo. Any amounts of your winnings that are withheld for taxes would also be reported on this form. W-2G also serves another purpose: Determining your net for the year -- if you lost money gambling, you'll only be able to claim that when you file your taxes.

Form 1099

Any denver cpa will tell you this isn’t one form, but many, each one designed to report different types of income:

  • 1099-B: Proceeds from Broker and Barter Exchange Transactions.

  • 1099-C: Cancellation of Debt.

  • 1099-DIV: Dividends and Distributions.

  • 1099-G: Government Payments.

  • 1099-INT: Interest Income. If you collected money through an interest bearing checking or savings account, it’ll be reported here.

  • 1099-MISC: Miscellaneous Income. So you decided to sell that family heirloom online after all? Yep, you’ll report it here.

  • 1099-Q: Payment from Qualified Education Programs.

  • 1099-R: Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

  • 1099-SA: Distributions From an HSA, Archer MSA, or Medicare Advantage MSA.

  • SSA-1099: Social Security Benefit Statement.

  • RRB-1099: Payments by the Railroad Retirement Board.

  • RRB-1099R: Pension and Annuity Income by the Railroad Retirement Board.

Form 1098

A denver accounting firm also will explain to you the difference between 1098 and 1099. While the 1099 series is for income you need to report on your federal income tax return, 1098s represents expenses you paid or incurred that may result in you filing for tax deductions or Denver Taxes credits.

  • 1098: Mortgage Interest Statement. Anyone with a mortgage sees one of these.

  • 1098-C: Contributions of Motor Vehicles, Boats and Airplanes.

  • 1098-E: Student Loan Interest Statement.

  • 1098-T: Tuition Statement.

Your Denver, CO Accountant can help make sure these stacks of paper don’t overwhelm you. Sound advice to consider is this: Keep all your income-related forms (forms W-2 and 1099, for instance) separate from expense-related forms such as the 1098. Whether you use a Denver Colorado Accountant or handle the returns yourself using software, having an understanding of the various forms you're dealing with can help you stay efficient at tax time.