When your employer sends your W-2 forms, there are usually multiple copies to deal with. It can be confusing to figure out which copies to send to whom. How do I know if I have to send Copy 1 to the State tax department?
<h2>Basic Tax Copy Distribution</h2>
Usually, the following is the distribution for your 1040 financial records: Copy 1 to Federal, Copy 2 to State, Copy 3 to Local and Copy 4 to You. Many states will require you to fill out your Federal tax form first and use those figures to estimate your State taxes.
Each State has its own special tax regulations governing deductions, exemptions and qualifications. There might have been a natural disaster or economic problem effecting only that State. These special circumstances may require you to send Copy 1 to your State.
<h3>Self-Reporting Information on 1099 Forms</h3>
The government has a lot of tax forms. When you are an employee, your company is required to accumulate all of the requisite forms for your individual tax returns. When you are an independent contractor or receive taxable dividend income, you might use one of the following 1099 forms:
These 1099 forms might require you to submit Copy 1 to the State tax department.
If you have a cancellation of your debt, you might need to file Copy 1 of your 1099-C with your State tax department. This cancelled debt might be taxable income.
The 1099-G is used by governmental agencies to report their State income tax refunds and unemployment compensation. You might be required to file this form if you claimed a deduction.
The 1099-INT is used to report investment taxable income and interest. You might receive a 1099-DIV from a corporation which paid you dividends. As you fill out your 1040 income tax form, you will be asked to total all your financial investments using the 1099 form as a scratch sheet. You may be required to submit all of these documents including the Copy 1 to the State tax department.
If you are an artist or carpenter, you might make money from odd jobs, qualifying you as an independent contractor. Independent contractors may be required to send Copy 1 of the 1099-MISC to the State tax department.
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Author: Jay White
I started Dumb Little Man so great authors, writers and bloggers could share their life "hacks" and tips for success with everyone. I hope you find something you like!