GETTING YOUR DUCKS IN A ROW FOR TAX SEASON



Whoa! January has flown by fast, and we are already into the second month of 2022! Hopefully your year is off to a beautiful start.


As we speed towards spring, we have one annually recurring task that we must complete: our taxes. So, what better way to spend a winter day than by getting your tax documents organized?


While certainly not exhilarating, tax season is an annual tradition where we settle up with Uncle Sam until the following year, either paying our dues or receiving a refund. Which is more likely for you?


With taxes in mind, I will spend today's post discussing the standard documents needed when preparing your returns. So, without further ado, let’s cover the basics:

Are you still working? If the answer is yes, and you are hourly or salaried, then you will need your W2. This document shows your income for the year, taxes withheld, and any contributions to employer retirement accounts.


But, what if you are self-employed? Then you will need to gather any 1099-MISC reports you received from clients throughout last year, detailing your income. Furthermore, be sure to keep track of all of your business expenses, including life insurance dues, since they are deductible for business owners.


Now, for those affected by the pandemic and laid off, collect your 1099-G that shows any unemployment income you received.


If you are an investor, be sure to gather all 1099-R, 1099-INT, 1099-OID,1099DIV, 1099-B forms from your advisory and brokerage firms. These documents outline your income and losses for the year, plus any tax-deductible contributions.


But, let’s not forget about homeowners! If you own a home and have a mortgage, find your 1098 mortgage interest statement and your property taxes paid last year. Both of these expenses are deductible!


If you were generous last year and made donations to registered charities, be sure to gather any receipts so that you can include them on your return, as Uncle Sam encourages helping others!


For those who received a stimulus payment and or claimed the child tax credit last year, be sure to gather your IRS letters 6475 and 6419, respectively.


Lastly, these are just some of the most common documents. If you received other tax forms in the mail or know you need to gather additional documents, be sure to prepare those. Here at LAA, we always recommend working with a qualified tax preparer, and if you are looking for recommendations, we would be happy to provide several options.


Good luck getting your taxes squared away, and enjoy the remainder of this winter day.

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