IRS increases 401(k) contribution limits for 2026
The IRS will increase 401(k) and catch-up contribution limits for 2026, allowing workers to save up to $32,500 for retirement.
Tax day is fast approaching and it will soon be time to start collecting your documents. If you haven’t seen it yet, you might be easily overwhelmed by the numbers and letters like W-2, W-9, and 1099.
Some forms are pre-filled and designed to be submitted to the IRS. They may be sent to your mailbox or to the “Tax Documents” portal on the website. In theory, you might not need to do anything other than file it with your tax representative if you have one, or document the appropriate amount on your tax return. Other formats require action on your part.
Here’s an overview.
What is the W-9 used for?
W-9s are typically used by businesses to collect personally identifying information such as name, address, social security number, and tax identification number for income purposes.
Common reasons for filling out a W-9 are because you are an independent contractor, freelancer, or gig worker. You may also be asked to fill out a W-9 when opening an interest-bearing bank account or another financial account that provides extra income.
This form will not be sent to the IRS. However, the information you provide on your W-9 will be used to prepare and fill out other forms. Read more.
Is a W-9 the same as a 1099?
The main difference between a W-9 and a 1099 is that the W-9 is filled out by you, whereas the company or entity making the payment fills out the 1099. In most cases, you should receive your 1099 form by the end of January.
The 1099 form is used to report income that is not earned directly through an employer. There are several types of 1099 forms because there are many ways to make money outside of traditional jobs.
Common 1099s displayed: 1099-G, 1099-K, 1099-R, 1099-Div
Some of the most common 1099s you may receive are:
◾ 1099-G: Details of unemployment compensation and state or local tax refunds that are considered income.
◾ 1099-K: Summarize the income you earn from third-party payment networks such as Etsy, eBay, and Venmo.
◾ 1099-R: Report distributions of $10 or more from various types of retirement plans, pensions, annuities, insurance contracts, and similar accounts.
◾ 1099-Division: Used by banks and other financial institutions to report dividends and other distributions to taxpayers and the IRS.
What is a W-4? What is it for?
The W-4 is a form you must complete when you work directly for an employer.
This tells your employer how much federal income tax should be withheld from your paycheck based on factors such as whether you are married and filing a joint return, whether you have dependents to declare, and whether you work multiple jobs.
You will usually be asked to fill it out when you start your job. It’s a good idea to check your forms regularly, especially if you notice that the amount withheld from your paycheck is significantly different from the taxes you ultimately owe at the end of the year.
You should also revisit this if your marital status changes, if you have or adopt a child, or if your employment status changes.
The IRS has a withholding estimator tool that can help you determine how to adjust your W-4 entries.
What can I learn from my W-2 form?
A W-2 is a form that your employer must send by the end of January to document how much you earned working for your employer in the previous year and how much tax was withheld from your paycheck. This form also shows how much you earned from tips and the benefits you received during the year.
If you had more than one job last year, expect to receive a separate W-2 from each employer.
You must include each W-2 form on your tax return.
What is a 1040 tax return?
The 1040 is a comprehensive form used to fill out an individual’s income tax return. The two-page document records the different types of income you earned last year, indicates whether you take the standard deduction or itemized deductions, and reports which tax credits you’re eligible for.
Follow the instructions on the form and crunch the numbers to find out how much tax you owe or how much of a refund you need.
Who fills out Form 5695?
Form 5695 is used to declare eligible residential energy credits. Importantly, this form does not apply to businesses.
Daniel de Visse covers personal finance for USA TODAY.
