6 Pieces Of Information You MUST Have Before Doing Your Taxes
The W-2 is the foundation for doing taxes. It documents your income, as well as what has already been paid to the government in taxes. I have one from my job as a software engineer, and my wife has two as she works two part-time jobs. Many employers provide the ability to have their W-2’s automatically loaded into tax preparation software, but I still like to have a hard copy for my records.
If you’re self-employed in any capacity, including freelance writing as myself, you may get a 1099 form documenting miscellaneous income. Like W-2s, 1099 forms should be issued by the end of January
Mortgage Interest Statement
If you own a home, you should receive a mortgage interest statement from your lender. Interest paid on a home mortgage is tax deductible, and in many cases may actually be a person’s largest tax deduction. Many banks now send these forms electronically through their online portals. If you did not get a mortgage statement from your lender, contact them immediately to find out why.
Property Tax Statement
Homeowners receive a statement from their county indicating how much they owe in property taxes, even if their mortgage lender pays the taxes for them from an escrow account. The statement usually comes in the mail early in the year, but it’s important to hang onto it. If it gets misplaced, the appropriate county office should be able to issue a duplicate statement.
Personal Vehicle Tax Statements
In many states, the yearly license fee for a motor vehicle is fully, or partially tax deductible. Check your state’s official website to find out how to properly claim the license fee for a motor vehicle as a tax deduction.
Whether it be money to a church, clothes or household items to Goodwill, or any other charitable organization, donations can be claimed as a tax deduction. Most religious organizations will make available a contributions statement, but most charities issue receipts for donations that must be kept to properly claim them as a tax deduction.
I spent a couple of hours tracking down the documentation needed to do my taxes, as well as installing the software. All that’s left is to sit down and enter the data, which will take surprisingly little time. The hard part is complete, and my taxes will be done soon!
My taxes are fairly simple, but yours may be more complicated. What other documentation do you have to gather to do your taxes? Have you started yet?
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