Question

Khalid and Miriam have made a lot of money from investments this past year, but they aren’t sure how much they have already paid in taxes on these investments. They are wondering if the government has kept records for them in any way. What information would you share to help them be more informed?

Group of answer choices

They will receive a 1040EZ form to tell them what they have earned (and paid) on investments.

They will receive a 1040 form to tell them what they have earned (and paid) on investments.

They will receive a W-2 form to tell them what they have earned (and paid) on investments.

They will receive a 1099 form to tell them what they have earned (and paid) on investments.

Answer 1

Khalid and Miriam will receive a 1099 form to report their investment income, not a W-2 or 1040EZ form. The 1099 form details how much they have earned from their investments and helps them fill out their 1040 tax form for annual income reporting.

Step-by-step explanation:

Khalid and Miriam will receive a 1099 form to tell them what they have earned on investments. The 1099 form includes information about various types of income, such as interest, dividends, and proceeds from broker transactions. It's different from a W-2 form, which reports income earned from employment, and a 1040 form, which is used to file an individual's annual income tax return. Taxpayers use the information on the 1099 form to help fill out the 1040 form and report their investment income and calculate how much tax they owe or what refund they may be entitled to.

It is worth noting that the 1040EZ form is no longer used as it was discontinued by the IRS starting with the 2018 tax year. Now, Form 1040 has been redesigned and is used by all taxpayers. Individuals are responsible for tracking how much they have paid in taxes throughout the year, although their brokerage or financial institution will report this information to both them and the IRS via the 1099 form.

Answer 2

They will receive a 1099 form to tell them what they have earned (and paid) on investments.

Step-by-step explanation: