Last week at my other tax blog: Free File and the economy; Capital gains tax rate
IRS saves $3.10 on each e-filed return

Tax filing preparation checklist

Electronic tax filing began last week. Whether you choose to use Free File, use tax software on your own or seek professional filing help, you still need to do some pre-filing preparation.

Today's Daily Tax Tip offers some guidance on how to do just that.

Begin by rounding up your tax documents, such as:

  • Last year's federal return. If you live in a state that collects taxes, dig out that old return, too.
  • The personal identification number (PIN) you used to e-file last year. You'll need your PIN or your adjusted gross income (AGI) to verify your identity so you can once again electronically submit your return.
  • W-2s for wages, salaries, tips and pensions. Employers have until the end of January to issue these statements, so you might have to wait a bit longer.
  • 1098s for mortgage interest paid. As with W-2s, some of these may not have arrived yet. If you bought your house last year, pull out that closing statement.
  • 1099s for interest, dividends, state tax refunds, retirement plan distributions, unemployment and other payments. Broken record alert, but 1099 issuers also have until Jan. 31 to get these to taxpayers.
  • Retirement plan contribution statements.
  • K-1s from partnerships, S corporations, estates and trusts.
  • Social Security numbers for yourself, your spouse and all dependents.

If you itemize deductions, to complete Schedule A you'll need records and receipts for:

  • Medical and dental expenses. This includes drugs, doctor office visit payments, dental care costs, hospital bills, medical insurance premiums as long as they aren't paid at work via pre-tax dollars, and the mileage to and from physicians' offices.
  • Taxes you paid, such as state and local income or sales taxes, real estate taxes and personal property taxes.
  • Mortgage interest and points. This is on the Form 1098 or substitute form noted previously.
  • Charitable contributions, regardless of whether as cash, credit card, other assets or household goods and clothing.
  • Casualty and theft losses.
  • Work related costs, both for unreimbursed employee expenses and money spent searching for a new job.
  • Investment expenses.
  • Gambling losses.

If you're a small business owner and are filing Schedule C, you'll need all receipts and documentation pertaining to your company, including:

  • Income statements, such as the 1099-MISC mentioned earlier as well as payment stubs for amounts not required to be reported on a 1099.
  • Home size and size of space used as a home office.
  • Self-employed health insurance payments.  
  • Keogh, SEP, SIMPLE and other self-employed pension plan contributions.
  • Details on business use of your auto.

In addition to getting your filing documents in order, you also need to ask yourself some questions. Or if you hire a tax professional to help you file, he or she will likely want the answers to:

Have you received any correspondence from the Internal Revenue Service or state/local tax agencies?

Did your marital status change during the year? If you divorced, did you receive or pay any alimony?

Are you supporting anyone not living with you?

Did you incur child care or dependent care expenses?

Did you or any member of your household pay college expenses?

Did you buy a new home last year?

Did you make any major improvements to your home?

Did you sell, refinance or face any foreclosure transactions on your personal residence?

Do you own a second residence or any other real estate?

Did you move in connection with a job?

Were you a resident of, or did you have income in, more than one state during the year?

Did you make any large purchases, such as a vehicle?

Did you have any nonresidential debt that was canceled?

Did you serve in the military? If so, did you receive combat pay?

Your answers could have tax implications, some good and some that could add to your tax bill. Either way, it's better to have the answers before you file.

Although there are a lot of items covered in this post, I suspect I've missed a few tax prep considerations. Feel free to let me and the readers know what else we need to do before filing by leaving a comment.

You also might find these items of interest:


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