Though taxes aren't due until April 15 this year, the IRS has already begun accepting returns. As such, it's not too early to get your tax paperwork in order, especially if you think you're due a refund and don't want to wait too long to get your hands on it.
What documents do you need to file your taxes? A lot, potentially. Here's a roundup of what you should have ready when you sit down to tackle that return.
You'd be surprised at how many people don't know their Social Security number, and don't realize they need it to file a tax return. Not only do you need your own Social Security number, but you'll generally need your spouse's and children's as well.
Whether you earned income from your main employer, a side gig, or investments, the IRS wants to know about it. As such, you'll need documentation summarizing all of the money you received in 2019, including your:
- W-2, which is the tax form your employer will provide you with.
- 1099 forms, which is what you'll receive from anyone you worked for on a freelance basis who paid you $600 or more, or you'll receive from your bank or brokerage account summarizing your interest or dividend income, or the amount of gains you took in from the sale of investments.
You'll also need a record of what you received in:
- Social Security income (if you're collecting benefits).
- Investment property income (such as rental income).
- Alimony payments.
- Debt cancellation.
- Jury duty income.
- Gaming winnings.
- Payments of virtual currency.
Having all of this information ready to go will ensure that you report all of your income. And that's a good way to stay off the IRS audit list.
There are a host of valuable tax deductions and credits you may be eligible for. To claim them, however, you'll need to know what you spent on:
- Mortgage interest.
- Property taxes.
- Charitable contributions (including records donated goods, which are deductible just like cash donations).
- Medical expenses.
- Student loan interest.
- Higher education expenses.
- Child care costs.
- Educator expenses.
- IRA contributions.
- HSA contributions.
Keep in mind that some of these won't apply if you're taking the standard deduction. For example, mortgage interest generally only comes into play when you're itemizing. There are, however, some tax deductions you can claim without itemizing, like IRA contributions, student loan interest, and educator expenses, so you'll need those details handy.
Additionally, if you're self-employed, you're allowed to deduct the cost of doing business. That means you'll need a record of what you spent on:
- Business equipment and supplies.
- Travel (including mileage on your vehicle).
- Estimated quarterly tax payments (which you should've been paying throughout the year).
- Expenses related to your home office deduction.
Clearly, there's a lot of potential paperwork to gather during tax season, so the sooner you get started, the less stressed you'll be. Remember, even if you're hiring someone to prepare your taxes for you, you're still the one responsible for digging up the above information, and if you get moving now, you'll be well positioned to complete your return well ahead of the April 15 filing deadline.