taxes

3 Tax Forms That Can Accidentally Raise Your Tax Bill

Protect yourself from accidentally increasing your 2017 taxes by being misled by a member of the 1099 family.

Starting your taxes? There's probably a pile of 1099 forms for you to go through. Here's how to avoid increasing your 2017 taxes by being misled by these.

First of all, don't lose any, of course: The IRS gets a copy of each, so if your return is missing one or more, that's going to be a headache.

Number two: They may show a lot of money that looks like income. But often, it's totally tax-free. Make sure you categorize it right. Here are three you might see:

The 1099-G

1099-Gs are for government payments. Most of you – those who claimed the standard deduction last year, or if you took the state sales-tax deduction – can totally ignore ones that are for state income tax deductions. Even if you itemize, part of the refund may be tax-free.

The 1099-Q

1099-Qs are for payouts from education accounts like a 529 college plan. Since education is pricey, these numbers could be big. But so long as you used that money for tuition or other qualifying expenses, it's tax free.

The SSA-1099

For sure, some of your Social Security benefits are tax free. For lower-income taxpayers, all of it is. Check out IRS publication 915 to get the details on the SSA-1099, or let your tax-prep software figure out the calculations.

There are other kinds of 1099s. See 7 Tax Forms That Can Accidentally Increase Your Tax Bill for more on how to handle them.

Most Popular

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer
Coronavirus and Your Money

Where's My Stimulus Check? Use the IRS's "Get My Payment" Portal to Get an Answer

The IRS updated its popular online tool so that you can track the status of your second stimulus check.
January 9, 2021
How a Third Stimulus Check Could Differ From Your First and Second Payments
Coronavirus and Your Money

How a Third Stimulus Check Could Differ From Your First and Second Payments

There's going to be a big push for a third round of stimulus payments. But the amount and eligibility rules for your third stimulus check could be dif…
January 12, 2021
Biden Calls for $1,400 Payments as Part of $1.9 Trillion Relief Package
Coronavirus and Your Money

Biden Calls for $1,400 Payments as Part of $1.9 Trillion Relief Package

Under Biden's plan for a third stimulus check, the $600 second-round stimulus checks would be increased to $2,000.
January 14, 2021

Recommended

How to Handle an IRS Audit of Your Tax Return
tax returns

How to Handle an IRS Audit of Your Tax Return

Don't panic! Keys to success include being well prepared, establishing credibility right from the start, and keeping your wits about you.
January 15, 2021
When Can You File Your Taxes This Year?
tax filing

When Can You File Your Taxes This Year?

If you're an early bird when it comes to filing your tax return, you'll have to wait a little longer this year before the IRS will accept your return.
January 15, 2021
12 IRS Audit Red Flags for Retirees
retirement

12 IRS Audit Red Flags for Retirees

Seniors Beware: Your actions can increase the chances of the IRS giving your tax return a closer look.
January 14, 2021
20 Most-Overlooked Tax Breaks and Deductions
Tax Breaks

20 Most-Overlooked Tax Breaks and Deductions

Don't miss these frequently overlooked tax deductions, credits and exemptions. Otherwise, you're just pouring money down the drain.
January 14, 2021