Tax season is upon us again. Although most people file every year, lots of us still need some help to complete the task. A survey by Nerdwallet found that 35% of taxpayers said they used commercial tax software, while 32% hired a tax professional. A smaller percentage enlisted the help of friend or family.
No matter how you choose to file your taxes though, a little preparation goes a long way. There are several key documents and pieces of information you will need, and now is the perfect time to get your documents in order and ready for filing. We’ve gathered these simple checklists to help you through the process.
GATHER IMPORTANT FORMS AND INFORMATION
To get started, you will need basic identifying information for you and anyone with whom you file jointly or claim as a dependent. Depending on your situation, you may need:
- Your Social Security Number
- Your spouse’s Social Security Number
- Social Security Numbers of your children or other dependents
Some of your most important tax documents are those that report different types of income, benefits, or expenses. Keep in mind that you only need to gather forms and documents that apply to your situation. These may include:
- W-2: A document from your employer showing how much you earned and paid in taxes this year.
- 1099-MISC (Miscellaneous): A statement of non-employee income, usually related to freelance or contract work.
- 1099-G: A form reporting unemployment benefits you’ve received or any state or local tax refunds.
- 1098: A form detailing your mortgage-related interest and expenses.
- Schedule K-1: A document detailing income earned as a general partner or limited partner in a business.
- Form 1095-A: A document with information about any Marketplace health plans in which members of your household are enrolled.
- Form W-2G: A form reporting gambling winnings and any income tax withheld from them.
LOOK FOR DEDUCTIONS
First-time or infrequent tax filers often ignore important tax deductions and credits that can lead to larger tax refunds. In addition to the information mentioned above, collect any documents related to the expenses listed below. You may be able to deduct these costs or take advantage of a related tax credit.
- Childcare costs
- Adoption costs
- Education expenses
- Medical expenses
- Theft and casualty losses
- Job change and moving expenses
- Business or home office expenses
- 401K contributions or other retirement savings
- Charitable donations (of money or goods)
LIFE CHANGES, SO SHOULD YOUR TAX RETURNS
Take the time to review the previous year’s tax returns for any details that will need updating in 2019. Major life changes and events can potentially alter the rate at which you are taxed as well as the size of an anticipated tax refund. Life changes you may need to note include:
- Job change
- Change in marital status (marriage, divorce, separation, becoming a widow/widower)
- Filing for adoption of a child
- Birth of a child or a new claim for dependents
- Enrollment in higher education, professional certifications, or trainings
- Purchase or sale of a home or other property
- An inheritance
PREPARE NOW, STRESS LESS
The process of filing your taxes can be complex and even stressful. But preparing and submitting your tax return is easier when you have all the right information at hand.
Whether you use filing software, enlist a tax preparation professional, or even fill out the forms by hand, review the financial documents listed above and take advantage of all applicable credits and deductions. Along with minimizing stress, reviewing this information might even help you take home a larger tax refund.
*Although we hope these tips are helpful to you, Midland Credit Management does not offer financial advice. If you have questions or concerns about your personal finances, please speak to a financial advisor.