Getting Ready for Taxes: Documents you Need


The first step towards filing your tax return is to gather all the documents that you will need.  Here, students learn what documents, paperwork, and receipts are needed to file your income tax return.  It is a checklist of documents for completing IRS form 1040 Income tax.  Learn to prepare and organize your tax documents, including the W-2 and 1099. Income tax 101.

Examples of important documents. To get started, you will need to gather all the documents you will need for filling out your tax forms. Whether you are doing your taxes yourself, or you are meeting with your tax advisor, this is an overview of some of the more typical documents you will need to gather.

CONCEPTS

Use this video on the topic to discuss the financial concepts of

  • Taxes
  • Getting ready for taxes.
  • Important financial documents, paperwork, and receipts.

 

PROCEDURE

Hand out the worksheet below (see the GET LESSON button near the bottom of the page).

Show students the video and have and have them complete the worksheet.  Then have a discussion about the documents needed for filing taxes.  Discuss each of the categories mentioned in the video and highlight the important documents for each.  Review the questions on the worksheet.

 

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GRADE LEVEL

9-12, Young adults

TIME REQUIRED

30 minutes

Getting Ready to File Taxes – Documents you need

Getting ready for filing taxes can seem overwhelming.  To get started, you will need to gather all the documents you will need for filling out your tax forms.  Whether you are doing your taxes yourself, or you are meeting with your tax advisor, here is an overview of some of the more typical documents you will need to gather. 

These are the main categories of items that you will need.  We will step through each one in more detail. The challenge of gathering all the information you need to file your tax return for the year can be simple or more time consuming, depending on your financial situation. For example, if you are single and rent, it likely will be easier, but if you are married, self-employed, own a home, and have children, will need to spend more time on the tax filing process.

Personal Information

You will need personal information, including  the social security numbers for you, your spouse, and any dependents.

Bank account information including bank account number and routing information.

Your federal and state taxes from last year. These documents are helpful to remember the information you filed last year and the documents that you used.

If you are meeting with a tax preparer, and it is the first time, then you will also likely need a photo ID, and other personal information for everyone on your tax return. 

Income

You will need all documents that verify the money you received in the past year.

This includes W-2 forms, which employers must send by January 31st.  If you held a regular job, your employer will send you this form. You’ll get one form from each employer if you worked for multiple ones in the same year. This form details your earnings, and the amount of income tax that was withheld from your pay.

1099 forms.  There are many different types of 1099 forms that you may receive, depending on the type of payment.  Typical ones include 1099-INT for interest, and 1099-MISC for contract work.

While the Internal Revenue Service already knows the amount of income you have earned last year, it still just needs you to verify it on your tax return. Anybody who paid you more that $600 in the previous year must let the IRS know.

If you have received income but did not receive a return with supporting information, you should contact the entity that paid you or your employer.

Deductions

You can reduce your taxable income by taking deductions. This generally results in a lower tax bill. Documentation is the key to claiming deductions. It can help you avoid being audited and can reduce your tax bill by reminding you what you should claim. It may be time-consuming, but it is likely worth the time.

Here are some of the most popular tax deductions. Before you file, make sure you have the supporting documentation.

Mortgage interest and property taxes for your home.

Classroom expenses. You can deduct  for classroom supplies if you are a teacher or another eligible educator.

Charitable donations. Have your receipts for charitable donations.

Medical bills. Tax savings may be possible for medical costs if they exceed a certain amount of your adjusted gross income.

Contributions to retirement accounts. Contributions to a traditional IRA and self-employed retirement account can be deducted if they are within the allowed contribution limits.

Taxes that are local and state taxes. Other taxes can be deducted, including state and local income taxes or sales taxes. Keep your receipts to prove that you paid the tax on major purchases.

Credits

Next are tax credits. They offer dollar-for-dollar reductions in any tax you owe. You will need to provide documentation in order to claim credits, just like deductions. These are some of the most popular tax credits.

To claim some tax credits, you will need to have received a Form 1098 detailing the expenses paid. This is especially important for those available for education. You will need to keep accurate records of your spending so that you can claim other credits.

Payments

If you were employed, you likely have inc ome taxes withheld from your paychecks to pay our tax liabilities. This amount can be found on your W-2 forms.

If your made estimated tax payments throughout the year, you should also have that information.

Letters from the IRS

Have any letters you may have received from the past year from the IRS.   This includes letters related to any tax credits, or any other letters you may have received.

Self-Employment Income

It is especially important to keep receipts if you earn income as an independent contractor. If you have income as an independent contractor, you can claim a number of business expenses on Schedule C that are ordinary and necessary for doing business.

Summary

This is just a summary of the documents that many will need. There may be others that you may require depending on your financial situation. We suggest you visit the IRS website or consult with your own tax advisor if you need help. It’s a good idea to organize all your tax documents as soon as possible to make it easier once you begin working on filing your taxes.

Learn what documents you need to file your 2021 income tax returns for 2022 tax season.

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