Let’s get ready to file 2022 Personal taxes! A little planning can make the tax preparation journey much easier. Tax law changes are minimal this year, details can be found here.
First, start a file for tax forms. You can use a folder, an envelope, a Zip Lock bag…it doesn’t matter as long as you have ONE easy place to put all of the tax forms you will start receiving in January.
Tax forms you might receive include:
W-2s – wage statements from your employer(s).
Forms 1098 – is a Mortgage Interest statement. It comes from your mortgage lender and provides information on interest you’ve paid on your mortgage loan, and in many cases, property taxes paid during the year.
Forms 1098-T – this is a Tuition statement and lists “qualified educational expenses” for a student in the tax year.
Forms 1099 – these forms relate to income. You may receive several of these. For example, 1099-NEC discloses Non-employee Compensation, 1099-MISC provides Miscellaneous Income such as rents or royalties, 1099-SSA reveals Social Security income, 1099-G shows Government payments like Unemployment Compensation, 1099-R discloses Retirement account distributions, 1099-INT communicates Interest Income, 1099-DIV discloses Dividend income, and 1099-B provides investment information. You can see there are many different 1099 forms!
Form 1095-A – this form relates to health insurance established through the healthcare marketplace. The information on 1095-A must be included in your tax return. The IRS uses this to determine your Premium Tax Credit. If your income has increased since you applied for the marketplace healthcare plan, you may have to pay back some of the tax credit advanced to you through lower monthly health insurance premium payments.
Next, gather some additional information:
If you have children or other qualifying dependents and pay for care, you may qualify for the Child and Dependent Care credit. You will need the amount you paid, the provider’s name, address and tax identification number. If your provider does not automatically provide you with an annual recap of the amount you’ve paid, you can request one.
If you made charitable contributions, especially cash contributions to a church or charity, you should have a statement from them showing the contribution. This may be in the form of a letter, it may be a receipt (especially if you paid online) or it may be an annual recap of giving if from a church. Put all forms showing proof of giving in your folder.
Finally:
Make sure your tax preparer has your current address and complete information for taxpayers and dependents represented on your return. This includes legal names, dates of birth, and Social Security numbers (tax identification numbers).
Your tax preparer may need additional information based on your unique situation. They will let you know what else they need.
Most accountants can provide a “Tax Organizer”. This is a comprehensive checklist of tax information and may consist of several pages where much of the information does not apply to your situation. If, however, you are not familiar with necessary information for filing taxes, an organizer can be a great guideline.
These are just basics. If you own or operate a small business, please refer to additional blogs we’ve posted. They include information for Sole Proprietors, LLCs, Partnerships, and S-Corps.
If you own rental property, there’s a blog for that! You can also give us a call with any questions.