Whether it’s multiple jobs, a side hustle, or rental income, the more places you make money from, the more complex your tax situation may become. Here are some common forms for filing taxable income and how you can make sure the proper taxes are paid.
WHAT IS TAXABLE?
The first thing you will need to do is figure out what income of yours is taxable. This list can include, but isn’t limited to:
- Salary, wages, & tips from employer
- Rental income
- Investment interest or dividend
- Freelancing income
SALARY FROM EMPLOYER
For every employer you had during a calendar year, you will receive a W-2 Form. This form includes your annual wages and what was withheld for taxes and social security. All of this information will be needed to fill out your tax return.
Rental income is defined by the IRS as ‘any payment you receive for the use or occupation of property’. If a tenant pays rent in advance, this must be included in the calendar year it was received and not the time period it’s covering. For security deposits, you do not need to include it if you plan on giving it back to your tenant. If you end up keeping the security deposit because of a lease violation, this money will then need to be reported. You can use Form 20140, Schedule E, Part I to report this income.
INVESTMENT INTEREST OR DIVIDEND
The interest you earn on your investments is considered taxable income. You can report this by using Form 1099-DIV.
Self-employment is when you are a sole proprietor, independent contractor, or business for yourself. On top of your income, you usually must also pay a self-employment tax. For your annual return, you will need to complete a Schedule C to ‘report your income or loss from your business’. You will also need to file a Form 1040 (1040-SR) to report your Social Security and Medicare taxes.
Disclaimer: This article is intended for educational purposes and not as legal tax advice. As every situation is different, please speak to a financial professional if you have specific questions when filing your taxes.