Essential Information and Documents You Need for Tax Returns
The IRS expects you to prepare and submit your taxes on time. Besides, the tax agency expects you to pay your tax bill on time to avoid late payment interests and penalties. Therefore, you need to get organized, and know what is required to file tax returns for the year. After that you should gather the information and documents required so that you can prepare your tax returns early and submit them on time. Read on to learn essential information your need for tax returns.
- Personal information
If you are new to tax preparation and filing process, you need to know the basic information you need to have when filing your tax returns. You need to have your name and that of your spouse, your social security number and that of your spouse (if married), information about your stimulus payment, and account number to receive the tax refund. If claiming dependents, you need to have their names, dates of birth, social security numbers, and care records.
- Income documentation
Once you have all your personal information and that of your dependent(s), it’s time to show your total income for the tax year. If you are employed, you will need W2 form from your employer to show your income and withheld taxes. If you are self-employed, you will have to look for documents showing your income, expenses and profit or loss of your business. There are various IRS forms you can use to file the income information based on the source of your income. Just know which form to use, and you will have an easy time.
- Reporting deductions and credits documentation
When filing your tax returns, you need to know that the IRS offers tax credits and deductions to tax payers to ease the tax burden. You need first to assess which deductions and credits you are eligible to claim, and then look for supporting documentation. Some of the credits you can claim include child tax credit, energy tax credits, earned income credit, American opportunity credit, among others. For deductions, you can claim charitable donations, medical expenses deductions, mortgage interest deductions and more, if your quality. You need to have documents such as receipts, bank statements, medical records, and other written records to support your deduction claims.
- Savings and investments information and documentation
If you have investments and savings accounts, you are likely to earn interests and dividends. You must report these interests and dividends when filing your tax returns. There are different IRS forms you can use to report the income from your investments and savings accounts. You must have documents to show all your investments and how much income they generated that tax year.
How to make tax preparation and filing process easier?
Yes, you can have all the documents and information required for tax returns, but the preparation and filing process can get complicated. How can you simplify that tax filing process? The best solution is to file your tax returns online. There are many credible tax software that can help you prepare and submit your tax returns. You just need to enter some personal information, upload different documents required and answer a few questions, and the software will do the rest. It is easy and fast to file your tax returns electronically. On the other hand, you can hire a tax professional to prepare and file taxes for you.
Final Words
With the above information, you can now get ready for the coming tax filing period. Get organized by gathering the information and documents required, and you will have an easy time. What’s more, file your taxes online as it is easier and faster compared to manual filing.
