The Need-to-Know on Income Taxes: Filing Status, Standard Deduction, and Key Forms

February is “get organized” season for taxes – W-2s and 1099s are arriving, and Tax Day is right around the corner. You don’t need to be a CPA to file confidently. Here’s a clear, jargon-light guide to the big decisions and documents that matter most: picking the right filing status, understanding the standard deduction, and sorting the forms (1040, W-2, 1099s) that drive your return.

Choose the correct filing status (it matters more than you think)

Your filing status affects your tax brackets, standard deduction amount, and eligibility for certain credits. Pick the one that describes your situation on December 31 of the tax year.

Single. You’re unmarried and don’t qualify for another status.
Married Filing Jointly (MFJ). You’re married and file one return together. Often the lowest overall tax, plus broader credit eligibility.
Married Filing Separately (MFS). You’re married but file your own return. Sometimes chosen for liability, loan, or personal reasons, but you may lose access to certain credits/deductions.
Head of Household (HOH). You’re unmarried (or considered unmarried), paid more than half the cost of keeping up a home, and have a qualifying dependent who lived with you over half the year. HOH can offer lower tax than Single.
Qualifying Surviving Spouse. If your spouse died in one of the prior two tax years and you have a dependent child, you may qualify for favorable rates similar to MFJ.

Quick tip: If you might qualify for Head of Household, read those tests closely; choosing HOH instead of Single can meaningfully reduce taxes.

Standard deduction vs. itemizing – what’s the difference?

Every return claims either the standard deduction or itemized deductions (not both). Most people use the standard deduction because it’s simple and – thanks to higher thresholds in recent years – often larger than itemizing.

Standard deduction: A flat amount that reduces your taxable income. The IRS updates it annually. (Check current figures when you file.)
Itemized deductions: You list eligible expenses such as:
- Mortgage interest (see Form 1098)
- State and local taxes (SALT) up to the current cap
- Charitable contributions (with receipts)
- Qualified medical expenses over a certain percentage of your income

When to consider itemizing: Your deductible expenses (mortgage interest + SALT + charitable + big medical) exceed your standard deduction. Otherwise, take the standard deduction and keep it simple.

Meet the forms you’ll actually use

You’ll file your return on Form 1040. Everything else (W-2s, 1099s, 1098s) feeds into it.

The return

Form 1040. The main individual income tax return. You’ll attach schedules if needed (e.g., for itemized deductions, credits, or investment sales).

Income documents

W-2 (Wage and Tax Statement). From your employer. Shows wages, federal/state tax withheld, retirement contributions, and more.
1099-NEC. For nonemployee compensation (contract/1099 work). No tax is withheld by default – plan for self-employment tax and quarterly estimates if needed.
1099-MISC. Miscellaneous income (e.g., certain prizes, rents).
1099-INT / 1099-DIV. Interest and dividends from banks or brokerages.
1099-B. Proceeds from sale of investments; pairs with brokerage statements to report gains/losses.
1099-K. Payment processors may send this for third-party payments (thresholds have shifted – check your form if you sell items or run a side hustle).
1099-G. State tax refunds or unemployment compensation.
1099-R. Distributions from retirement accounts (401(k), IRA), pensions, annuities.

Deduction/credit helpers

1098 (Mortgage Interest). Shows mortgage interest paid – key for itemizing.
1098-T (Tuition). For education credits if you paid qualified tuition.
1098-E (Student Loan Interest). Potential above-the-line deduction (check current limits).
Childcare/Dependent Care records. Needed to claim the Child and Dependent Care Credit.
HSA/Marketplace forms (1095 series). For health savings account contributions/distributions or Marketplace insurance reconciliation.

Pro move: Create a simple checklist and folder (digital or paper). Drop forms in as they arrive so nothing gets missed.

Know the difference between credits and deductions

Deductions reduce the income you’re taxed on (standard deduction or itemized).
Credits reduce your tax bill dollar-for-dollar (often more valuable). Common examples:
- Child Tax Credit (if eligible and based on current rules)
- Earned Income Tax Credit (EITC) for qualifying workers with low to moderate income
- Education credits (American Opportunity or Lifetime Learning)
- Saver’s Credit for eligible retirement contributions

If your situation is close to qualifying for a valuable credit, review the rules; the paperwork is worth the savings.

Timing, extensions, and payments

Tax Day: Typically in mid-April. If you need more time to file, submit Form 4868 for an extension to file – but remember, it’s not an extension to pay.
Balance due: If you owe, paying by Tax Day avoids additional penalties/interest.
Refunds: E-file + direct deposit usually speeds things up.
State taxes: Most states have their own returns and deadlines – check yours.

Withholding and W-4 checkup (avoid “big surprise” season)

If you got a large refund last year – or owed more than you expected – do a quick W-4 checkup with your employer to adjust withholding. The goal isn’t the biggest refund; it’s the fewest surprises.

Security + organization essentials

Use reputable e-file software or a trusted tax pro.
Watch for scams. The IRS doesn’t initiate contact via text/social DMs. Be cautious with links.
Consider an IRS Identity Protection PIN (IP PIN) if identity theft is a concern.
Keep records (returns, W-2/1099s, receipts) for at least three years – longer for certain items like basis in investments.

A quick February checklist

1. Gather W-2s, 1099s, 1098s, and any childcare/education docs
2. Pick your filing status (confirm if you might qualify for Head of Household)
3. Decide standard deduction vs. itemizing (skim mortgage interest, SALT, charity, medical)
4. List potential credits (Child Tax Credit, EITC, education, Saver’s Credit)
5. E-file and choose direct deposit for any refund
6. Set a W-4 reminder to fine-tune 2026 withholding once you file

Remember

Taxes don’t have to be intimidating. Choose the right filing status, use the standard deduction unless itemizing clearly wins, and organize your W-2s/1099s so your Form 1040 is accurate the first time. A calm, organized February sets you up to file on time, keep more of what you earn, and move into spring with one big to-do off your list.

While we strive to provide accurate information, FinFit does not provide tax advice and you should consult with tax professionals if you have any questions about your specific situation.