Tax Preparation Checklist: Documents You Need Before Filing

Filing your taxes doesn't have to be stressful. If you organize your documents ahead of time, you can make the process much easier. This checklist covers all the important paperwork you'll need, ensuring you're ready whether you're filing on your own or working with a professional.

Before You Start

Before you begin gathering your tax documents, take a few preliminary steps to streamline the process:

Review Last Year’s Tax Return
Looking over your previous tax return can help you recall income sources, deductions, and credits you might otherwise forget. It's a helpful reference to ensure consistency and accuracy.

Confirm Your Filing Status and Dependents
Make sure your filing status (e.g., single, married filing jointly, head of household) and the number of dependents are up to date. Life changes like marriage, divorce, or having a child can affect your status and benefits.

Organize Financial Records
Use financial software or spreadsheets to compile your income and expenses. Generating an annual report can highlight key deductions and expenses, saving you time when you're ready to file.

Documents You Need for Filing Your Taxes

After completing the initial preparations, gather the following key documents:

1. Personal Information

The IRS requires specific identification details to process your tax return. Be sure to collect:

• Social Security Numbers (SSNs) or Tax ID Numbers for yourself, your spouse, and any dependents.
• Dates of Birth for everyone included on your tax return.
• Identity Protection PIN if the IRS has issued one to you, your spouse, or dependents.
• Bank Routing and Account Numbers for direct deposit of refunds or electronic payment of taxes owed.
• Foreign Reporting Information: If you have foreign bank accounts or investments, gather details such as the location, bank name, account numbers, and the account's highest value during the year.

2. Income Documents

Collect all forms that report income you've received throughout the year:

• W-2 Forms: For wages and salary from employers.
• 1099 Forms: Including:some text
  • 1099-NEC for income from self-employment or contract work.
  • 1099-MISC for miscellaneous income like rent or royalties.
  • 1099-K for payments received through third-party processors.
  • 1099-DIV for dividends received.
  • 1099-INT for interest received.
  • Consolidated 1099 form packages for brokerage accounts.
• Retirement Income: Forms like 1099-R for distributions from pensions, annuities, or retirement accounts, and SSA-1099 for Social Security benefits.
• Rental Property & Royalty Income: Records of rental & royalty income and expenses.
• Income from Sales of Property: 1099-B forms for stock or investment sales, along with records of purchase dates and costs (cost basis).
• Cryptocurrency Transactions: Documentation of any virtual currency transactions, including sales, exchanges, or income received.
• Other Income: Such as 1099-G for unemployment benefits & state tax refunds, gambling winnings (W-2G), jury duty pay, or any other income.

3. Deductions and Credits Documentation

Having proper documentation for deductions and credits can reduce your taxable income or directly lower your tax bill. Gather records for:

Deductions:

• Retirement Account Contributions: Proof of contributions to IRAs or employer-sponsored plans like 401(k)s.
• Mortgage Interest and Property Taxes: Form 1098 from your lender.
• Medical and Dental Expenses: Receipts for out-of-pocket expenses not covered by insurance.
• Charitable Donations: Receipts or acknowledgment letters from charitable organizations.
• State and Local Taxes Paid: Records of taxes paid, excluding amounts withheld from your paycheck.
• Energy-Efficient Home Improvements: Receipts for qualifying upgrades like solar panels or energy-efficient windows.

Credits:

• Child Tax Credit: Information on qualifying dependents.
• Education Credits: Form 1098-T for tuition payments, and Form 1098-E for student loan interest.
• Retirement Savings Contributions Credit: Documentation of contributions to retirement accounts.
• Energy Credits: Details of eligible home improvements for energy efficiency.
• Childcare Expenses: Statements from daycare providers, including their tax ID number.

4. Taxes Paid and Adjustments

Ensure you have records of taxes you've already paid and any adjustments that could reduce your taxable income:

• Estimated Tax Payments: Receipts or records of quarterly tax payments if you're self-employed or otherwise make estimated payments.
• Prior Year Tax Overpayments Applied: Any overpayments from the previous year applied to the current year’s tax liability.
• Self-Employment Tax: One-half of self-employment tax is deducted as an adjustment.
• Student Loan Interest Paid: Form 1098-E if you paid interest on student loans.
• Self-Employed Health Insurance Premiums: Records of premiums paid if you're self-employed.
• Disaster Relief Documentation: If you suffered losses from a federally declared disaster, gather records of losses, insurance reimbursements, and assistance received.

Final Tips for a Smooth Filing

Organize your documents according to this checklist to make your tax preparation efficient and stress-free. Double-check each item to ensure nothing is missing or incorrect to prevent delays or issues with your return. With everything in order, you'll be well-prepared to tackle your next tax season.