Understanding Investment Income and IRS Forms

Which IRS form do employers use to report the wages and salaries you earned from a job each year?

• W-4 form
• 1099 form
• Paystub
• W-2 form

Which IRS form reports the interest you earn from sources such as bank accounts, bonds, or loans?

• Form 1099-INT
• Form 1099-DIV
• Form W-2
• Form 1040

Which IRS form reports dividends you receive from investments like stocks, bonds, or mutual funds?

• Form 1099-INT
• Form 1099-DIV
• Form W-2
• Form 1040

The profit made from selling assets such as stocks, funds, or houses is called _______

• dividends
• capital gains
• interest income
• rental income

Independent contracting or freelance income is typically reported on which IRS form?

• Form W-2
• Form 1040
• Form 1099-MISC
• Form 1099-NEC

By what date each year must you file a 1040 form to report your previous year’s income to the IRS?

• March 15th
• May 15th
• April 30th
• April 15th

What is the purpose of the 1040 form in the U.S. tax system?

• Reconciles what you paid in taxes with what you actually owe

• To claim unemployment benefits in the U.S.
• To report foreign bank accounts and assets.
• To apply for a business license in the U.S.

True or False: Some taxpayers receive a refund if they overpaid during the year, while others must pay the IRS if they underpaid

• False
• True

The total amount you earn before any taxes or deductions are taken out is called your _______

• disposable income
• gross income
• taxable income
• net income

What does “FICA” refer to on your paycheck deductions?

• FICA is a fee for unemployment insurance.
• FICA refers to payroll taxes for Social Security and Medicare.
• FICA is a state tax for local services.
• FICA refers to income tax for federal employees.