Beyond standard tax paperwork like W-2s and 1099s, there might be others you need to collect, like a 1099-DIV.
The sooner you get your taxes finished, the sooner you’ll get your tax refund if you have one coming, and you’ll avoid the stress of scrambling at the last minute.
But even if you do tend to wait until the last moment or plan on filing an October 15 extension, not organizing your tax paperwork could mean problems later.
To help you get a leg up on tax prep, whether you’re tapping a tax professional to prepare your return or doing it yourself, here’s all the information and documents you’ll need to gather.
What Tax Forms Do I Need to File Taxes?
Employers are required to issue W-2s by Jan. 31. If you are self-employed, that deadline also applies to 1099 forms. Here are some of the most common tax forms you may need to gather. Note that if you have a working spouse and you’re filing jointly, you both may need some of these forms:
- Form 1040: This is the first page of your federal income tax return. If you use tax preparation software, a tax preparation service or a tax accountant – they’ll all need you to complete this form. If you’re doing your own taxes, your local library may have a Form 1040. But you can also go to the IRS website to print it or fill it out online.
- W-2: If you work for an employer, you should have already received a W-2, which shows how much you earned last year and how much was deducted for taxes and retirement account contributions.
- 1099-NEC: You should have already received this 1099 form if you work as a freelancer or if you did contract work in 2023.
- Other 1099 forms: If you earned interest from savings or investments, you may receive a 1099-INT form. You could also receive a 1099-DIV, which reports dividends and distributions from investments. If you received a 1099-C, that means you had some debt of $600 or more canceled., The amount forgiven or canceled is generally taxable, but there are exceptions, according to the IRS, such as someone who had debt canceled in a Title 11 bankruptcy case.
- 1098: Those who own a home and pay mortgage interest will get a Form 1098 from their mortgage lender. It shows the amount of mortgage interest a homeowner paid above $600.
- 1098-E: This is a form that records tax-deductible student loan interest payments over $600. (You can deduct up to $2,500 worth of student loan interest under certain conditions.) If you paid less than $600, you may not get a 1098-E, but if you find out how much interest you paid, you can deduct it. If you need the form, your loan servicer should send it to you.
- 1098-T: The 1098-T can be used to help you calculate and claim educational tax credits and deductions. It reports payments received for qualified tuition and related education expenses that you may have paid last year. You’ll also need to include scholarships or grants. If you need to fill this out, your school or child’s school should send this to you.
What Other Documents Do I Need?
Of course, the federal government, your employer, your college and so on won’t send you all of your tax paperwork. These are some other documents you may need as you start preparing your taxes.
- Supporting information for tax deductions and credits. If you plan to take advantage of tax deductions and tax credits, you’ll need certain documents to ensure you qualify. These could include documentation or receipts related to child care, medical expenses and job search costs. Claiming a mileage tax deduction? Ideally, you’ll have already created a log including dates, destinations and reasons for travel.
- Social Security numbers for family members. Make sure you have your accurate Social Security number as well as that of your spouse and dependents. If you had a baby in 2023, you’ll need his or her Social Security number to claim child tax credits.
- Retirement and college savings contribution information. Remember to collect documentation on retirement plan contributions that are tax deductible. If you contributed to a 529 college savings plan in 2023 and your state offers a tax benefit, you’ll want to keep that information on hand for your state taxes. Unfortunately, 529 contributions aren’t tax deductible for federal taxes.
- Charitable donations. Gather all of your receipts for charitable contributions that you made during 2023 and put them somewhere safe. You don’t need to send these to the IRS, but in case of an audit, you’ll want to proof that you contributed what you claimed.
- Last year’s tax returns. If you’re working on your taxes yourself, it might not hurt to have them on hand, in case you need to look back at them. You shouldn’t need to have them, however, if you’re working with tax preparation software that you used last year (the service should have them), or if you’re working with your tax accountant (who should also have them).
- Estimated tax payments that you sent to the government. Are you self-employed? If you don’t use a tax preparation software service or tax accountant who keeps track of your estimated tax payments, you’ll need to supply it to the IRS. If you have an employer, your taxes come out of your regular paycheck, and you don’t have to worry about estimated tax payments.
- Your bank account information. Do you want your refund sent to you via direct deposit? You’ll need to provide the IRS with your bank account and routing numbers.
Keep These New Changes in Mind
Every year, there are some new changes to be on the lookout for when it comes to filing your taxes. Here are three you can expect for the 2024 filing season:
1. New Energy Credits
One big change is aimed at taxpayers who have invested in making the planet a better a place.
“New items for individuals for 2023 include new and significantly revised energy credits such as for certain home improvements and new and used clean vehicles,” says Annette Nellen, a professor and director of San Jose State University’s graduate tax program.
The size of your credit depends on when you bought your vehicle last year, Nellen says.
“For the new clean vehicle credit, the vehicles that qualified from Jan. 1 through April 17, 2023, are slightly different from those that qualify for April 18 through Dec. 31, 2023. And the list of qualifying vehicles for 2024 is shorter due to new qualifications that start in 2024,” Nellen says.
It’s a little confusing, to say the least, but the federal government has a lot of information online.
2. A New Way to File
There’s a new way to file for some taxpayers called Direct File.
“The IRS is now testing its own in-house tax return preparation software,” says Jordan Rippy, a CPA and associate professor of practice in accounting at the Johns Hopkins Carey Business School.
“This is meant to eventually compete with well-known commercial products like TurboTax. Because it is a pilot program, the pool of eligible taxpayers is limited,” she says.
Rippy says that if you’re interested in using Direct File, you’ll need to live in one of the following 12 states: Arizona, California, Florida, Massachusetts, Nevada, New Hampshire, New York, South Dakota, Tennessee, Texas, Washington or Wyoming.
Rippy also says that “you’re limited to certain types of income, credits and deductions.”
3. You Might Need Form 1099-K
There’s been a lot of talk about Form 1099-K, which reports payments users collect through mobile apps.
“One item we were expecting to see this filing season that has been delayed is the $600 reporting threshold for third-party payment apps like Venmo, PayPal and Square on Form 1099-K,” Rippy says. “The challenge has been that it is hard to distinguish between nontaxable and taxable transactions that happen via payment platforms.”
Rather, this tax season threshold remains much higher. You should get a 1099-K from any payment platform where you collected over $20,000 and had over 200 transactions last year. You may still receive the form if you don’t meet that threshold – it’s up to individual payment apps as to whether they send a 1099-K or not.
Either way, all income a person receives in exchange for goods and services is taxable and should be reported to the IRS.
“If you are sending money via Zelle to your friend who purchased a movie ticket on your behalf or picked up the whole dinner tab, that is not a taxable transaction. However, if you are paying your hair stylist via Venmo, that is taxable income to your hair stylist,” Rippy says.
https://money.usnews.com/money/personal-finance/taxes/articles/tax-prep-checklist-collect-these-forms-before-filing-your-taxes
