Posted On January 31, 2013

Keep up with IRS documents to prepare for Nevada tax time

Tax time is coming up for Nevada residents, and this year could be more confusing than most. There are certain documents everyone needs to begin the process of filing, so it is important to remember to keep checking both your mailbox and email to ensure they are received. Doing so could make for a smoother filing process and ensure no IRS penalties are levied.

One of the most common forms is the W-2. This form outlines one’s annual employment income for each job, taxes paid throughout the year and any contributions concerning retirement or other reimbursement plans. Self-employed individuals get a 1099-MISC form from each income source instead. Homeowners should receive a form 1098, a document detailing the amount of interest paid on each mortgage. Anyone who paid $600 or more in interest will receive this form.

Those who are still paying back a student loan will receive a 1098-E if the interest paid on this must also be at least $600, and that interest is typically deductible on IRS tax returns. Others may receive a variety of forms depending upon their bank account interest or ownership of stocks or mutual funds. One of the more unknown forms concerns any payments received from places such as eBay, Amazon or Papal. Residents who have used these services and received money should be aware the income may be taxable and is required to be reported even if they don’t receive a 1099-K, the form that outlines those third-party payments.

There are numerous other forms Nevada taxpayers may receive, so it may be a good idea to diligently keep up with anything related to the upcoming tax year. When a resident fails to include these forms in their tax returns, and are required to do so, it may result in IRS fines. Taxpayers who find themselves subjected to these fines may benefit from seeking help with their cases. Tax law can be confusing and difficult to decipher. Many times a positive resolution can be achieved once taxpayers fully understand their rights and open a dialogue with the IRS.

Source: Yahoo! Finance, “Tax Statements You Need to File,” Kay Bell, Jan. 18, 2013