Get tax forms ready
It happens every year around this time – Filing Your Taxes!
Here are some tips that can help you organize what you need regardless if you hire a tax professional or prepare tax returns yourself.
Let’s look at what is included in your tax returns. You must include all gross income from whatever source derived unless there is a specific exception, exemption, or exclusion.
Much of what you will be declaring come on government-issued forms. Some of the more common forms that you may receive include:
- W-2 Income – Wages paid by your employer
- 1099 – INT: Interest income that you made, usually issued by banks
- 1099 – DIV: Dividend income, usually from stocks that you own
- 1099 – B: Brokerage statements, which generally show gains and losses on stocks sold
- 1099 – R: Income you received from retirement
- 1099 – G: Payments received from the government – most common are unemployment payments, State and Local tax refunds
- 1098: Interest paid on your mortgage
- 1095: Health coverage for you and your family; this may be used to compute money owed or due if you received a health insurance premium credit.
The person who prepares your taxes should compare the forms you received this year to those of last year. Identify any differences in forms to be sure that you received all of your tax documents for this tax year. One of the most common letters that the IRS sends out is called a CP2000 Form. You may receive this letter, if your tax return does not match the information that the IRS has about you.