When tax season arrives, it's helpful to have all your documents in order to prevent last-minute stress and potential errors. This comprehensive checklist for the 2020 tax year will guide you through what you need to prepare for your tax filing.
Personal Information
- Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) for you, your spouse, and any dependents.
- Your driver’s license or other government-issued ID (state ID, passport, etc.)
Income Documents
The following documents are essential for reporting your income accurately:
- W-2 Forms from all employers.
- 1099 Forms which include:
- 1099-NEC for non-employee compensation (freelancers, contractors).
- 1099-INT for interest income.
- 1099-DIV for dividends.
- 1099-G for government payments (like unemployment benefits).
- 1099-K for payment card and third-party network transactions.
- 1099-R for distributions from retirement accounts.
- 1099-MISC for other miscellaneous income.
- State and local income tax refunds if you itemized deductions last year.
💡 Note: If you receive any other types of 1099 forms not listed above, you might need those as well, such as 1099-B for proceeds from broker transactions or 1099-SA for HSA distributions.
Investment and Retirement Account Information
- Investment income statements from brokers, including:
- End-of-year statements showing gains or losses.
- Transaction history, especially if you sold investments.
- Retirement account contributions and distributions.
- 401(k), IRA, or other retirement account contributions.
- 1099-R for any retirement account distributions.
Business and Self-Employment Income
If you’re self-employed or run a small business, you’ll need:
- Detailed records of income and expenses, including:
- Gross receipts, invoices, or ledger entries.
- Business-related expenses like office supplies, travel, etc.
- Home office expenses if applicable.
- Vehicle usage logs for business-related travel.
- Form 1099-MISC or 1099-NEC for contractor payments.
- Quarterly estimated tax payment records.
Deductions and Credits
To maximize your tax benefits, you should gather:
- Charitable contribution receipts.
- Medical expense records if they exceed 7.5% of your AGI.
- Education expenses, including Form 1098-T and receipts for books, supplies, etc.
- Child care expenses along with the provider’s tax ID number.
- Documentation for energy-efficient home improvements.
- Home mortgage interest paid (Form 1098).
As you gather these documents, here are a few tips to keep in mind:
- Verify all information on the forms for accuracy.
- If you receive digital copies of your tax documents, print them or ensure they are accessible for reference.
- Keep track of your health insurance coverage details, especially if you used the Health Insurance Marketplace.
Organizing these documents not only helps streamline your tax preparation but can also help in identifying potential deductions or credits you might have overlooked. For those filing taxes for the first time, or if there are changes in your financial situation, consulting with a tax professional might be beneficial.
✏️ Note: Remember that some documents might take longer to arrive, so start collecting them well before the tax deadline.
Final Thoughts
Having all your documents in order is the first step to a successful tax season. Whether you’re filing electronically or by mail, your thorough preparation ensures accuracy, maximizes deductions, and minimizes the risk of an audit. Remember, thoroughness today saves headaches tomorrow, so take your time to compile all necessary paperwork.
What if I haven’t received all my tax documents by the deadline?
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If you haven’t received all your tax documents by the filing deadline, you have the option to file for an extension (Form 4868), which gives you extra time to file your return until October 15, but not to pay any taxes owed. Ensure you estimate and pay any tax owed to avoid penalties.
Do I need to include receipts for my tax return?
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You do not attach receipts to your federal tax return, but you must keep them as proof of expenses or deductions in case of an IRS audit. Store receipts and records for at least three years or as per the IRS guidelines.
What if I made contributions to an IRA after December 31?
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You can make contributions to an IRA for the 2020 tax year until April 15, 2021 (the original due date of your 2020 return). Be sure to report these on your 2020 return to claim the deduction.
