4-4 Preparing Tax Forms Business U

Adjusted Gross Income (AGI) is:

• the total income before any deductions or exemptions.

• the income after deductions and exemptions are applied.

• the income after taxes are deducted.

• the income before taxes but after deductions and exemptions.

A Dependent is considered as:

• A person who relies on another for financial support

• A person who is financially independent

• A person who provides financial support to others

• A person who is employed full-time

Filing Status defines:

• the type of tax return form an individual will use

• the amount of tax an individual owes

• the number of dependents an individual can claim

• the eligibility for tax deductions

Form 1040 is used for:

• Filing individual income tax returns in the United States

• Applying for a passport

• Registering a business

• Claiming unemployment benefits

The purpose of Form 1099-DIV is to:

• Report dividend income and distributions.

• Calculate tax deductions.

• File for unemployment benefits.

• Apply for a mortgage loan.

Form 1099-INT reports:

• Interest income earned

• Dividend income received

• Capital gains

• Rental income

Form 1099-NEC is used for:

• Reporting nonemployee compensation

• Filing personal income tax

• Claiming tax deductions

• Reporting capital gains

Form 1099-R reports:

• Income from self-employment

• Distributions from pensions, annuities, retirement or profit-sharing plans, IRAs, insurance contracts, etc.

• Interest income

• Dividend income

The purpose of Form W-2 is to:

• report an employee's annual wages and the amount of taxes withheld from their paycheck.

• apply for a new job.

• file a complaint against an employer.

• register for health insurance.

Income is:

• The total amount of money earned before any deductions.

• The money received, especially on a regular basis, for work or through investments.

• The amount of money left after all expenses are paid.

• The money spent on goods and services.