Tax Prep Checklist: Everything You Need to File Your Taxes

It’s that time of the year again—time to file your taxes. Many Americans groan at the thought of yearly tax prep. But the truth is, filing your taxes doesn’t have to be a dreaded chore. On the contrary, with the right checklist, you can file stress-free and ensure you’re getting the most out of your return. 

“What do I need to file my taxes?” It’s a common question. To help simplify the filing process, we’ve put together a tax preparation checklist. Use this guideline and check ‘file taxes’ off your to-do list.    

Personal Information

For starters, you will need to make sure you have basic personal information ready. This should include information about yourself, your spouse, and any dependents. 

Previous Tax Returns:

Having last year’s return can be helpful for several reasons. It can help you compare what you filed last year vs this year. It also can make it easier to fill out your current forms with information that has not changed. 

SSN/Tax ID:

You will need your social security number or tax ID number to file. Don’t forget to compile this information for your spouse and any dependents, too. If someone on your return doesn’t have a social security number, you will need their ITIN. 

Date of Birth

You will also need the date of birth for each person on your return. 

Income

Your income is the main thing that will determine your tax bracket. In some cases, your household income will be the same or very close to last year’s income. However, you may have experienced major changes to your household income level in the last year. Changing jobs, getting a promotion, being laid off, or getting married can affect your income level.  

W2s:

Your employer should send you a W2 form that shows how much you earned in the tax year and how much was withheld for taxes. You should receive your W-2 form no later than February. If you have not received one yet, you may want to request it. 

1099s:

There are a few different types of 1099s that you’ll need to file if you are self-employed or receive other types of income/dividends

1099-MISC:

If you are self-employed or do freelance work, you should receive a 1099-MISC form from clients who paid you $600+.

1099-DIV:

This form will report any dividends you received during the year.

1099-G:

This form is for any funds or benefits you received from the government.

1099-K:

This form deals with any third-party transaction funds (for example through PayPal or Venmo).

1099-R:

This form is for distributions from a pension fund, retirement plan, IRA, annuity, etc.

Miscellaneous Income:

Miscellaneous income can take the form of a gift, winning the lottery, investments, etc. If you received any miscellaneous income, you will need to report it to the IRS. 

Self-Employed & Business Records

If you are self-employed or own a business, there are a few extra steps you will need to take. Get started on this early to ensure you are filing properly and can maximize your return. 

It is important to know that the self-employment tax is different from income taxed by an employer. This is because you do not have an employer withholding taxes from your paycheck year-round. However, you can set up quarterly estimated withholdings. 

Self-employment tax is currently 15.3% to cover Social Security and Medicare. Because of this rate, proper tracking of your business expenses and other deductions is important. 

Business Expenses:

Tracking your business expenses is critical if you want to minimize your tax bill. Records of business expenses can include receipts, a record of checks paid, credit card statements, invoices, etc.

Mileage Records:

When you are self-employed or own a business, you can also track mileage and make deductions for the number of miles you traveled for work-related trips. 

Home Office Expenses:

Home office expenses can be deducted, too. This includes everything from buying a new computer or DLSR camera, to pens, paper, etc. You also can deduct certain bills if you work from your home office. Qualifying bills include rent/mortgage, electric, and other utilities. You will need to know how big your home office is in square feet to file certain deductions. 

Quarterly Tax Payments:

If you are self-employed, you may have opted to set aside quarterly estimated tax payments. If you did this throughout the year, you should submit your receipts/records from the IRS and your state holdings. 

Deductions

Deductions can help reduce your taxable income. Typically, this means that by filing deductions, you can cut your tax bill. You may even receive a higher return. There are many different types of deductions. Below, we’ve listed some of the most common. 

Retirement Account Contributions:

If you contribute to an IRA or a self-employed retirement account, you may be eligible for certain deductions. 401(k) contributions or payments to an IRA may qualify you for the Saver’s Tax Credit. 

Educational Expenses:

Students and teachers can deduct some educational expenses. Teachers can deduct up to $250 for classroom supply expenses like paper, pens, markers, tissues, etc. Students can claim deductions for interest paid on student loans as well as tuition and fees. You must submit a Form 1098-T for education transactions or a Form 1098-E for student loan interest payments. 

Medical Bills:

High medical bills may be deducted from your taxes. Make sure to keep any receipts for surgeries, procedures, hospital stays, etc.  

Property Taxes and Mortgage Interest:

If you have a mortgage, your lender should send a 1098 with the amount escrowed for property taxes. This form will indicate how much interest you can claim on your taxes. 

Child Tax Credit:

Parents who claim children as dependents are eligible for up to $2,000 in child tax credit per dependent. Those who adopt may be eligible for additional credits. 

Filing your taxes can seem daunting at first—especially if you’re doing it alone. If you’ve been wondering “What do I need to file my taxes?”, hopefully this tax document checklist can get you started. 

If you’re still dreading the whole process, have no fear! An accountant can take the burden off your shoulders and make sure all your forms are filed the right way. Contact us today to schedule an appointment. See how our professionals can help you maximize your return.