Key Tax Forms You Should Know For The 2023 Tax Season

2023 Tax Season
Table of Contents

The 2023 tax season is well underway, so it’s important to ensure that you’re ready to file. The IRS has provided several tax inflation adjustments this year, but there are also several forms you should know about.

Before you file your tax return, make sure that you’re familiar with all of the key tax documents and forms before you submit your return.

Here are some important tax forms you should know about for the 2023 tax season to ensure that filing goes as smoothly as possible.

Form 6251: Alternative Minimum Tax

Each year, the IRS imposes the Alternative Minimum Tax, or AMT, on some taxpayers if they earn a significant amount of income. The AMT applies to those who are able to eliminate most or all of their income from taxation using specific deductions and credits.

Using Form 6251 for the 2023 tax season may help reduce your total taxable income, which could decrease the amount you owe the IRS. The AMT is utilized to ensure that all taxpayers are paying their fair share.

if you want to know whether or not you’re subject to the Alternative Minimum Tax, you’ll need to complete this form. This form is different from the taxable income calculated on Form 1040. If applicable, using Form 6251 may reduce your overall tax bill.

2023 Tax Season: Form 1042-S

If you’re a foreign national and are exempt from U.S. taxation under a tax treaty, then you’ll need to include Form 1042-S in your tax documents. This form is also used to report non-wage payments to foreign nationals if they are also nonresident aliens. All wages subject to taxation must be reported on a W-2 form and not Form 1042-S.

Most people who receive a scholarship, grant, or fellowship in excess of tuition charges will receive a 1042-S form as well. You can click here to get an idea of how this form might apply to you.

Form 8962: Premium Tax Credit

If you receive an advanced premium tax credit through the Marketplace this year, then you must file Form 8962. This refers to anyone who applies for a premium tax credit during Open Enrollment.

The credit amount is determined in advance and is based on your estimated income for the coming year. When you go to submit your income tax returns, you will have a much more accurate total of your income for the year.

Those who underestimate their income during Open Enrollment could potentially receive too much premium tax credit during the year. In this case, you’ll likely need to pay the difference when you file your taxes. However, if you overestimated your income during Open Enrollment, you could receive an additional tax credit.

If you do get an additional tax credit, you can receive it as part of your refund when you file your income taxes. Make sure that you use Form 8962 to reconcile the estimated and actual income for the year. It’s important to note that even if your estimated income matches your actual income exactly, you’re still required to submit this form with your tax returns. 

Form 1120-S for S Corporations

If your business is registered as an S corporation, you’ll need to include Form 1120-S with your tax return. This form is only for S corporations, a type of corporation that avoids double taxation at both the corporate and personal levels.

An S corp must use this form to report any profits, losses, and deductions for the fiscal year. Since S corps are “pass-through” tax entities, the income passes through the business to the owner. This means that your business income is also reported on your personal income tax returns, and you won’t have to pay corporate taxes.

All business income for S corporations is taxed at the personal income tax rate. Form 1120-S informs the IRS what percentage of the company is owned by individual shareholders and what type of payments or refunds are required on the shareholder’s personal tax returns. 

Form 940: Federal Unemployment Tax

Form 940 applies to businesses and shows the IRS that the business is submitting all wages subject to federal unemployment tax. This form is designed to ensure that small businesses and the IRS are on the same page regarding any federal unemployment tax owed.

Employers must report all of the wages they paid to both full and part-time workers throughout the calendar year. The IRS uses this total to calculate the correct amount of wages that are subject to the federal unemployment tax. 

Form 944: Employer Tax Return

Small businesses with employees must report all income and payroll taxes withheld from their employees’ paychecks. In most cases, this information is reported on Form 941, but smaller businesses with less tax liability may be eligible to submit Form 944 instead.

Form 941 must be submitted by businesses on a quarterly basis. However, some businesses may be able to file IRS Form 944 on an annual basis instead, especially if your employment tax liability is projected to be $1,000 or less for the year. If this applies to you, you will be notified in writing by the IRS to alert you of your eligibility. 

Form 1065: Partnership Tax Return

Business partnerships must use Form 1065 to report their financial information to the IRS, although all profits and losses are passed directly to the owners. The partnership must report total net income and any relevant financial information for the partnership using this form.

Next, a Schedule K-1 is prepared for each partner to identify the allocated profits and losses for the reporting period. Each Schedule K-1 is sent to the partner and used to prepare their personal income tax returns. 

Get Ready for Your Taxes This Year

Whether you’re filing as an individual or a business, don’t forget these crucial forms for the 2023 tax season. Submitting the correct forms will ensure a smoother process and a faster refund if it applies to you.

If you want to get more from your taxes, fill out an application to find out if you’re eligible for the Employee Retention Credit today.

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