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Is it tax time yet? - 12/29/2021

Updated: Jul 29, 2022

Once January 1 hits, the first thought in everyone's mind is always "is it tax time yet?".

Ok, it's not. But that should be somewhere in your thoughts.

If you haven't started thinking about the information you may need to gather for your tax return yet, you should start thinking about it now. The year hasn't quite ended yet, or maybe it has depending on when you read this. January is when the statements start arriving in the mail.

Whether you gather your information digitally, in a shoebox, or however you do, try to gather and keep track of the information as it comes in.

W-2 - You should receive a W-2 from every employer your worked for (and were paid from) in the calendar year just ended.

1099 - There are different types of 1099s. You may receive a 1099 from your bank, your broker, a person or company you worked for as a contractor, your state if you received unemployment benefits, federal/state/city for tax refunds, retirement account distributions, social security, gambling or other prize winnings, or any other nonemployee compensation from an entity if it is in excess of the threshold for that type of payment.

K-1 - This is a statement for partnership, S-corps, and trusts.

1098 - Mortgage statement

You will also need to gather up the information on:

-Income and expense from self-employment

-Property tax statements

-Cash donations

-Non-cash donations (including date, name and address of donee, current value of donation, or a statement if from a larger donation such as stock or a car) - this may only be needed if you are itemizing but it is better to include more information for your preparer than not enough.

-Basis information on stock sales if not included on brokerage statement

-Information if you invest in any virtual currencies

-Dates and amounts of tax estimates paid

-Auto registration information if you itemize deductions

-Auto business and personal use mileage for the year, plus other expenses if you use your car for business purposes

-College education information for expenses and plan distributions if you have or are a student

-Any dependent changes (such as a new baby or an older child no longer qualifying as a dependent)

-Medical and dental expenses

-Prior year tax return

-Any correspondence from the IRS

While this does not include everything you may need, it does cover the information needed by the majority of taxpayers. Whether you are preparing your own return, hiring a new preparer, or continuing with the same tax preparer you have used for years, the more organized you are with the information the easier it will be to prepare the return.

If you set it aside as it arrives, or work at gathering it now before you need it, it will be less stressful later.

If you find these tips useful, feel free to share the blog and the website. If you haven't already, you can subscribe to this blog to stay up-to-date on posts.

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