Tax Prep Checklist: Everything You Need to File Your Taxes
Paying taxes may be an expected annual obligation, but tax season always finds a way to sneak up on us. Luckily, we’ve curated a checklist of information and documents that most taxpayers will need for the job.
Personal Information
This should be the easiest information to pull up, but it’s not uncommon for taxpayers to realize they’ve lost an elderly parent’s social security number come tax time.
- Previous year’s tax return — Your past federal and state returns aren’t required to complete your present return, but having your tax history handy will help.
- Social Security Numbers — If you have any dependents, including elderly parents, make sure to have their social security numbers ready.
Income
For self-employed taxpayers and business owners, income tax forms will be more complicated, but here are the forms most individuals require.
- 1099 forms — The type of payment you receive will determine the suffix of the 1099 form you need. 1099-INT is for interest-generated income, 1099-DIV is for dividend payments, 1099-NEC is for contract work, 1099-K is for third party payments like PayPal, and 1099-B is for broker-handled transactions.
- W-2 forms — Unless you are self-employed, you should receive a W-2 from your employer before Jan. 31.
Deductions
Deductions are just about the only fun part of doing your taxes. It’s a good idea to understand and plan for deductions early. Once you’ve done your taxes this year, keep these deductions in mind for the following year.
- Medical Bills — If your medical costs exceed 7.5% of your adjusted gross income, you may be eligible for a deduction.
- Property Taxes/Mortgage Interest — Form 1098 is for mortgage payments that include an amount escrowed for property taxes.
- Charitable Donations — It’s important to keep receipts from any donations you make to charity and have them ready for tax season.
- State/Local Taxes — Some state and local taxes, like sales tax, and up to $10,000 in property taxes, can typically be deducted.
- Retirement Account Contributions — If you have a traditional IRA or self-employment retirement account, you can deduct your contributions.
- Educational Expenses — Tuition, fees, and student loan interest can be deducted using forms 1098-T and 1098-E.
Credit
Tax credits are like deductions, but unlike deductions they provide dollar-for-dollar tax cuts.
- Child Tax Credit — In 2021, the standard child tax credit is up to $3,600 for each child.
- Saver’s Credit — 401(k) contributions or an IRA may make you eligible for a tax credit claim.
Payments
Self-employed taxpayers may have made estimated federal tax payments throughout the year. If this is the case for you, be sure to have the information ready.
Debt
Tax credits are great news for those with debt, but for those that owe a significant amount of money to their creditors, tax season only adds to their financial anxieties. You may come to find that you owe tax on the portion of a debt that was forgiven, or that you owe taxes that you simply can’t pay.
If you’re struggling with debt during tax season, you can get in touch with a consumer credit and debt relief solution company like Americor. Check out our tax prep checklist.
Read our article on mid year tax check up and 5 steps you can take now.
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*This is for general, informational purposes only, and it is not intended to provide and should not be relied on for tax advice. Please consult your tax advisors before engaging in any transaction.
