This website is all about taking confusing, boring topics and presenting them as clearly as possible. And a few topics are more confusing and boring than taxes.
So whether taxes simply fail to excite you or flat out freak you out, we’re going to try to make this tax season a bit more bearable.
Tax season is almost upon us, so it is time to gather all of your necessary information and to get it in one place and organized.
Taxes seem scary.
But for those of us who are just starting out, filing your taxes is usually a pretty simple task.
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Shelling out a couple hundred dollars (or more) each year to get your taxes done by someone else may seem like an easy choice, but it’s not always necessary. If you’re young, single, and not yet a homeowner, doing your taxes on your own is easy.
And for almost everybody else, tax software like TurboTax can walk you through your taxes step by step. And, if your taxes are simple, filing a federal return with TurboTax is even free.
No matter if you drop all of your tax paperwork off with your accountant or use home software to complete your taxes on your own, you have to make sure that you have all of your necessary documents.
In this article, we’ve put together a tax document checklist to help you prepare for April 15th and to get ready with the papers you’ll need.
Here’s a quick checklist summary to get you started:
- W-2 – Report of wage and salary information
- 1040 – U.S. individual income tax return
- 1099 – Self-employed income report
- Schedule C – Used to report income or (loss) from a business
- Schedule SE – Used to figure the tax due on net earnings from self-employment
- 1098 – Tells you how much you paid in mortgage interest
- Record of any taxes paid throughout the year (estimated quarterly taxes, etc.)
- Prior year tax return
- Any info about foreign bank accounts
- Any tax software you want to use
Personal information you need to file taxes
Some of the most critical information you have to have when going to file your taxes is your personal information. According to the experts at TurboTax, this includes your social security number, and the social security numbers for your spouse and any dependents you want to claim.
You also need to have, on hand, a copy of your tax return from last year. While this isn’t necessary, it can speed up the filing process and make it easier, which is why it’s recommended. And make sure that you have a correct bank account and routing number if you want to have your refund deposited directly into your account.
One reason many people prefer to work with the same accountant year after year is that they will generally keep this information on hand. When nothing changes from year to year, it can make filing your taxes faster and easier.
Information about your income you need to file taxes
You have to make sure you have plenty of information to prove any income you want to claim on your taxes. And this is where some people run into problems.
No matter if you work for a large company, are self-employed, or run your own business, you have to have the right forms for your taxes. These can include a W-2 or self-employment paperwork to prove your income.
Here’s a quick guide to which IRS forms and/or personal documentation you’ll need for the most common income situations:
If you have one or more employers
If you work for someone else—meaning, employment, and income taxes are deducted from your paychecks—you will need at least these two forms:
- W-2: Your employer(s) will mail these forms to your house no later than January 31st.
- 1040*: Depending on the complexity of your taxes, there are three 1040 forms to choose from 1040-EZ, 1040A, or the original 1040. (The different types of 1040 forms are explained below).
If you earn any money on your own (from freelancing/self-employment)
If you worked for yourself at all (full-time or on the side), you will need a few more forms to fill out:
- 1099: You should receive one 1099 from every company or person you earned income from during the year if it’s greater than $600. (Even if it’s not greater than $600, you still have to report the income.) Generally, this will be a 1099-MISC. These will be included as income earned on your Schedule C form.
- Schedule C*: This is the form where you’ll determine whether you and/or your business earned a profit or suffered a loss during the year. No matter if you earned a profit or suffered a loss, this will be added or subtracted from your overall income on your 1040 form. If you earned a profit, you’ll need to pay employment taxes (like FICA, Medicare, Social Security, etc.) because an employer was not deducting those taxes from your paychecks…you were your own employer.
- Schedule SE*: If you earned a profit, this form will determine the amount of self-employment taxes you’ll need to pay. In general, you can deduct half of this amount from your total income (line 27 on your 1040 form).
- 1040 Form*
If you were unemployed
- 1099G: Unemployment compensation is included in your taxable income, so you must include it in your tax return. You’ll generally receive a 1099G form from the state that paid you unemployment compensation.
- 1040 Form*
If you paid student loan or mortgage interest
- 1098: Your student loan or mortgage lender(s) will mail you 1098 forms showing how much interest you paid on your loans in the tax year. This interest could potentially be tax deductible.
If you earned interest from bank accounts or investments
- 1099-INT: Your bank or investment company will send you these forms for any interest paid to you in cash. Interest income must be reported on your return.
*You only need these forms if you plan on doing your own taxes without software. Other documents you need either way.
Other income considerations
Besides earned income from a job, you also need to make sure you have paperwork showing distributions from things like:
- Dividends from stocks
- Social Security
- Interest on accounts
- Rental property income
Many people make mistakes when gathering this paperwork for their taxes because they don’t realize items such as Social Security and dividends from stocks all need to be reported and will fall under the “income” category.
Each type of income you have to report will require a different form, too.
Adjustments to your income
It’s also important to have any documents on hand that can reduce how much of your income is taxed. This can either lower the amount you owe (when you need to pay taxes) or increase your tax refund. This is why you need to pay attention and gather these documents.
If you’re a student you can use forms 1098-T and 1098-E to show how much you paid for tuition and how much of your student loan interest you paid, respectively. Teachers can provide canceled checks or copies of receipts that show they paid for classroom supplies, which can help to offset their income.
Other examples of items under this category that can help adjust your income include:
- Records of any contributions you made to your IRA
- Proof of improving your home with energy-efficient appliances or windows
- Records of contributing to a Medical Savings Account
Also keep track of expenses such as:
- Moving expenses you incurred
- Any alimony you paid to a spouse
- Information on self-employed health insurance
- Self-employed pension plans
These can be used to adjust your income and help you get a more substantial return.
Explanation of the different 1040 forms
Now that you know how to report the income you earned throughout the year, you’ll need to decide which 1040 form to use. Remember, there are three to choose from, the simplest being the 1040EZ (catchy name, huh?) and the most complex being the original 1040 form. The 1040A is right in between both in terms of complexity.
Here’s how to decide which form to use:
I was able to file this form during all the years I was in school (through college) because the only income I needed to report to the IRS was simple income I received from various part-time employers. If you’re just starting out, try to use this form if you can. It makes filing your taxes very simple. Here are some of the requirements:
- Taxable income less than $100,000
- No dependents
- Less than 65 years of age
- Single or Married Filing Jointly status
- Interest income less than $1,500
This becomes a popular form for many recent college graduates because this form allows you to deduct student loan interest. If your taxes are still fairly simple but you need to deduct student loan interest (or education expenses, IRA contributions, or higher education expenses), you might be able to use this form.
Additionally, if you own a home, you probably will not be able to use this form since you cannot itemize (e.g. deduct mortgage interest expenses) when using this form.
- Taxable income less than $100,000
- You take the standard deduction (do not itemize)
- Only certain tax credits are allowed
If all else fails, you’ll need to file a 1040 Form. The older you get, the more likely you are to file a 1040 Form instead of the A or EZ versions.
From this quick checklist, you think you may qualify for the A or EZ you can check out every detail of qualifying on the IRS website. Even if you qualify for the A or EZ versions of the form, you can still use the regular 1040 if that’s what you feel comfortable with.
Remember, no matter which 1040 form you decide to use, every taxpayer must submit a 1040 form to file their tax return. It is the head honcho of tax return documents, so make sure you get familiar with how it works.
Deductions and credits
It’s a great idea to itemize deductions if you want to lower how much taxable income you have. This does take more time and effort than just using standard deductions, but if you’re prepared for the extra work, you can enjoy the benefits.
See what Paul Sisolak at U.S. News has to say about itemized deductions and consider using these deductions this year to help decrease how much taxable income you have. Here are some quick examples of common deductions and credits that you’ll need documentation for:
- Child care credits. If you have children and have to pay for them to receive care while you’re working, you can take this expense off of your taxes. But you need to have information about the provider. Have the provider name, their address, their tax ID, and the amount you paid for the year.
- Education expenses. Any education expenses and adoption costs can also be listed here if you have the right forms to document the expenditures.
- Adoption. If you want to itemize your adoption costs, then you need to have the social security number of your child and records of all medical, legal, and transportation costs.
- Mortgage costs. You can list mortgage interest, points you paid for your mortgage, and private mortgage insurance (PMI).
- Rental property. If you have rental property or work from home, then you will want to consider itemizing income/expenses from your rental property and any information regarding home business expenses.
Other itemized expenses you can include here are dental and medical costs, charitable donations, investment interest expense, and insurance reimbursements and amount of damage for theft and casualty losses.
Taxes you’ve paid
It’s also essential to keep track of all taxes you have paid during the year, as you will need to list them on your taxes in April. Unlike some of the other categories of information you need to gather for your taxes, this list is relatively short and should be easy for you to keep track of.
Keep information on your real estate taxes, personal property taxes, the state and local income taxes you’ve paid. You’ll even want to keep the vehicle license fees you have to pay. These will depend on the value of your vehicle so that they will go down each year, but still essential to have this information come tax time.
While you don’t need to prove you have health care coverage, having this information on hand is helpful so you can easily verify coverage if necessary. This can include your insurance cards, statements from your insurer, explanation of benefits, and even a W-2 that shows your deductions for health insurance.
If you get Form 1095-A, then you need to wait to file your taxes until you have it in hand. This form is the Health Insurance Marketplace Statement. Remember that most employers need not provide you with information to prove that you have health care coverage, so you need to show this information on your own if it becomes necessary.
It’s crucial that you know all significant life changes that can affect your taxes. Especially if you’ve done your taxes for years, or if you’ve had the same person complete them for you. Making sure that you list all significant life changes you have been through will ensure that your taxes are completed correctly.
If you sell a home, you need to report this on your taxes. Michele Lerner at Realtor.com says that “Single taxpayers can exclude a profit of up to $250,000, and married taxpayers who file joint returns can exclude a profit of up to $500,000. You can use this exclusion more than once in your lifetime as long as you haven’t taken the exclusion within the past two years for another house.”
For most people, the sale of a home won’t impact their taxes. But if you are someone who’s affected, you need to report this.
If you’ve unfortunately suffered a catastrophic loss, you need to claim this on your taxes. The IRS will help you by allowing you to itemize casualty losses, which are commonly related to natural disasters.
According to Kay Bell at Bankrate, “Taxpayers who itemize are allowed by the IRS to deduct casualty losses — “the damage, destruction or loss of property from an identifiable event that is sudden, unexpected or unusual.” Usually, this means waiting to claim the loss on your next income tax filing.” Check out her full article to see what additional information you’ll need.
Marriage or divorce
If you got married or divorced, you need to have this information ready to report to the IRS. While not always required, I’d recommend having at least your marriage certificate handy.
Additional information you need to file taxes
There are a few other key pieces of information you may need when filing your taxes. So I recommend making sure you have this information on hand. They aren’t necessary for everyone but are part of this tax document checklist to ensure everyone gets the help they need.
The first piece of additional information you may need to have is if you are self-employed. You’ll need to have information regarding your estimated tax payments you made throughout the year. This is important to have so you can prove not only that you paid your quarterly taxes, but how much you paid.
Prior year refunds
If you had a refund in the prior year and wanted it applied to your year, then you need that information. Have all the information regarding how much was paid along with your extension to file.
Foreign bank accounts
People with foreign bank accounts need to disclose this information on their taxes. The information includes the name and location of the bank where your accounts are held, the account number, and even the peak value of your account throughout the year.
Not everyone has to report their foreign bank account information, but if your account exceeds certain thresholds, then you need to make sure that you report this information on your taxes. Because there are, according to the IRS, several exceptions and procedures you have to follow, you may be better off getting professional help if you find yourself in this situation.
Make retroactive savings contributions
Finally, one last thing I recommend you do before you finalize and file your taxes is to get all your paperwork together and make any retroactive contributions you can for the last tax year. This is a great way to take advantage of your college savings or retirement account, and smart to make sure you have all your tax information prepared beforehand.
If you didn’t max out either your retirement account or your college savings account, then now is the time to max them out, even though it is technically a new year. You can easily retroactively contribute to several accounts, including your HSA, IRA, 401K, Roth IRA, Coverdell Education Savings Account, and 529 if you claim the contribution for the prior tax year.
You also need to make sure that your payment is received before tax day or you won’t be able to apply it to the preceding year’s taxes and must claim it on this year’s. You can read about how to do this here.
When in doubt, use tax software
This is only a partial list of things you need to have on hand to file your taxes. Everyone has a unique tax situation that will require different kinds of documents. And this is only one half of the battle.
Filing your taxes can be time-consuming and tedious. So it’s always good to get a little help. If you want to make this process as smooth as possible, I recommend using a tax service like TurboTax, TaxAct, H&R Block, Liberty Tax, or E-File.
Here’s a table that shows a comparison between the tax services:
Credit Karma Tax
Liberty Tax Online
For simple tax returns
For simple tax returns
For simple tax returns
For simple tax returns
Import Return from Competitor
Yes, by PDF
Yes, from H&R Block TurboTax, and TaxAct
Yes, from TurboTax & H&R Block
24/7 Live Support
24/7 Live Chat Support
Chat & email
Live chat & phone support
Email or phone
Create W2s & 1099s
Separate plan to prepare business returns for partnerships
File employer tax returns
Create W2 & 1099 forms
File employer tax returns
Prepare Forms 1065 (Partnerships)
1120 (C Corps)
1120S (S Corps)
Free Guidance + Premium Representation ($49.99)
Assistance and representation through a third-party provider
no direct representation
Free in-person audit support
no direct representation
Direct representation at no extra charge
You’ll get professional service and assistance, and be sure you don’t miss any important documentation. I’ve used TurboTax for years, and I can’t imagine how I would have ever remembered all the tax documents I needed without them.
We hope this tax document checklist will help you prepare to file your taxes. It should also make it easier to ensure you have all of your paperwork and documents on hand and ready to go when you file.
Filing your taxes is no walk in the park, but we all have to do it. This list will help get you started, but if your taxes are more complicated than any of the forms above allow, consider hiring a tax preparer.
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