Are you going to use a tax preparation service to help file your taxes because they've gotten a lot more complicated? If so, it will help to know what documents you need to have on hand.
Your Personal Information
You will need to provide some personal information to the tax preparation service to cover just the basics. This includes a photo ID, your social security number, bank account information, and, ideally, a copy of your most recent tax return. This should provide them with some of the basic information that they need about you.
Income Information
If you have a salary or hourly job, you will receive W-2 forms from each employer that state how much money you made during the year and how much in taxes you paid. There will be one W-2 form from each employer. If you are an independent contractor, you will receive a 1099-K or 1099-NEC form from each employer. You also need information on tax refunds, interest, and any other income received.
Keep in mind that people that receive their money through PayPal may only receive a 1099-K directly from PayPal. If you receive a 1099-K from PayPal and your employer, you'll need your employer to issue a corrected 1099-K form showing that you did not make income so that you are not taxed twice on those earnings.
Deduction Information
The key to paying less in taxes is to have information on deductions. This means having supporting information for property taxes and mortgage interest related to your home. as well as receipts for educational expenses related to teaching—such as teaching materials and school supplies. If you made charitable donations, have the receipts for those on hand as well. You'll also want receipts related to medical expenses, and contributions to a retirement account.
Independent contracts should also have all of the receipts related to the expenses for their business. Business lunches, gas receipts, and even mileage information for your car should all be considered.
Tax Credit Information
You'll need information that can help you receive tax credits, which are relevant if you are using a standard or itemized deduction. This includes child and dependent care receipts, or anything that says form 1098 on it. This could include earned income tax credits, recovery rebate credits, and American Opportunity credits.
These are the basics of what you'll need to have a professional prepare your taxes. Reach out to a tax preparation service to find out what other documents you could need.
Share
