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Forms Needed To File Taxes: Tax Prep Checklist & Filing Tips

April 06, 20246 min read

April 15th (subject to change) is a significant date every year, as it marks the deadline for most individuals to file their federal income tax returns. Tax season often feels overwhelming, but with a bit of preparation, the process can become more manageable.

This guide is designed to help you navigate tax season smoothly. Whether you're a seasoned tax filer or new to the process, this guide offers a clear tax prep checklist, explores the forms needed to file taxes, provides valuable tax tips, and gives a basic overview of tax credits and deductions to ensure a stress-free tax filing experience. 

Gather Your Documents: Forms Needed To File Taxes

The first step to tax preparation is to assemble all the necessary documents. Here's a tax prep checklist to get you started: 

Income Statements:

  • W-2 forms: These forms, issued by your employer, detail your wages, salaries, and any taxes withheld throughout the year.

  • 1099 forms: These forms report income from sources other than your primary employer, such as freelance work, side hustles, interest earned on investments, or unemployment benefits. There are various types of 1099 forms, so gather all that apply to your situation.

  • Social Security benefits statement (SSA-1099): If you received Social Security benefits, you'll need this form to report the income.

Deduction Documentation (if itemizing):

  • Receipts for medical expenses: Keep receipts for medical bills, prescriptions, and any other qualifying medical expenses.

  • Charity donation receipts: Maintain receipts for charitable contributions to qualified organizations.

  • Mortgage interest statement (1098): This form, typically provided by your mortgage lender, details your mortgage interest paid throughout the year, which may be deductible.

  • Property tax receipts: These receipts show the property taxes you paid, which may also be deductible.

  • Education-related expenses: If you paid for tuition, fees, or other education expenses, gather the documentation for potential tax credits.

Business Tax Filers (Additional Documents):

  • Business bank statements: These statements provide details of your business income and expenses.

  • Business expense receipts: Maintain receipts for all business-related expenses, such as supplies, travel, and office equipment.

  • Depreciation schedules: If you own business assets subject to depreciation, you'll need depreciation schedules to claim the deduction.

Remember that the forms needed to file taxes may vary depending on your circumstances. It's always best to consult with a tax professional if you have any questions.

Having all your documents readily available allows you to accurately fill out your tax forms and reduces the risk of errors or delays. You can easily reference the information needed without scrambling to find missing documents.

Beyond the Checklist: Steps to Take Before Filing

Now that you have the forms needed to file taxes in order, here are some additional tax preparation steps to take before filing:

Choose a Filing Method

There are three main filing methods: paper forms, online tax preparation software, or a tax professional. Paper filing can be time-consuming and prone to errors, so consider using user-friendly online tax preparation software.

If you have a complex tax situation, consider seeking the expertise of a tax professional who can ensure your return is filed accurately and maximizes your benefits.

Understand Tax Deadlines

The standard deadline to file your federal income tax return is typically April 15th of each year (subject to change). However, you can request a six-month extension by filing Form 4868 for individuals or the appropriate form for businesses.

Remember, an extension to file is not an extension to pay. Make an estimated tax payment by the original deadline to avoid penalties and interest charges.

Estimate Your Tax Liability

Using tax software or consulting a tax professional, estimate your tax liability to avoid any surprises or last-minute scrambling for funds.

Tax Preparation

Understanding Tax Deductions

In tax preparation, deductions and credits are both valuable tools to reduce your tax liability, but they work in different ways. Tax credits directly subtract a dollar amount from your tax bill, while deductions reduce your taxable income, which in turn lowers your tax owed.

There are two main ways to claim deductions on your tax return:

  • Standard Deduction: This is a fixed dollar amount set by the IRS and is available to all taxpayers. It's often the simpler option, especially if your itemized deductions wouldn't total more than the standard deduction.

  • Itemized Deductions: If your total itemized deductions exceed the standard deduction, you can choose to itemize. This involves listing out all your eligible expenses on Schedule A of your tax return.

Here are some common expenses that may be deductible if you itemize:

  • Medical and dental expenses: You can generally deduct medical and dental expenses that exceed 7.5% of your adjusted gross income (AGI). This includes costs for doctor visits, prescriptions, medical equipment, and some over-the-counter medications.

  • Mortgage interest: If you own a home, you can deduct the interest you paid on your mortgage loan up to a certain limit.

  • Charitable donations: Donations to qualified charitable organizations are generally deductible up to a certain percentage of your AGI.

  • State and local taxes: You can deduct state and local income taxes or general sales taxes, but not both.

Choosing Between Standard Deduction and Itemizing

It's important to compare the standard deduction to your total itemized deductions to see which option will save you more money on your taxes.  The IRS website or a tax professional can help you determine which method is best for your situation.

Understanding Tax Credits

Tax credits can significantly impact your tax bill, so it's crucial to identify and understand the ones you qualify for. Unlike deductions that reduce your taxable income, tax credits directly reduce the amount of tax you owe. Here are some key points to consider:

  • Earned Income Tax Credit (EITC): This credit benefits low- and moderate-income workers. To claim it, you'll need your income statements (W-2s or 1099s) and filing status information. The EITC is refundable, meaning if the credit is more than the amount of taxes owed, you may receive the difference as a refund.

  • Child Tax Credit: For each qualifying child under 17, this credit provides a tax break. To claim it, you'll need your children's Social Security numbers and proof of relationship (birth certificates or adoption decrees). The Child Tax Credit is partially refundable, allowing you to receive a refund even if you owe no tax.

  • Student Loan Interest Deduction: If you paid student loan interest in the past year, you may be eligible for this deduction. Documentation from your loan servicer showing the amount of interest paid will be required. The deduction can reduce your taxable income by up to $2,500, depending on your income.

Other credits, such as the Child and Dependent Care Credit, the American Opportunity Tax Credit for education expenses, and the Saver's Credit for retirement contributions, can also provide valuable tax savings.

Understanding and claiming these credits can significantly reduce your tax burden, so it's important to explore all the credits you may qualify for.

Bottom Line

Preparing for tax season doesn't have to be daunting. By gathering the forms needed to file taxes, following the tax prep checklist, and learning about tax deductions and credits, you can navigate the process of tax preparation with confidence.

If you have questions or need assistance, don't hesitate to call Trustway Tax & Accounting at 205-463-5260. Our team of experts is ready to help you with your tax filing needs!

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