Here are the most common forms you’ll need to fill out your taxes.
The most important files needed to file your taxes are those showing proof of income. For many, this is a W-2. A W-2 shows how much you made, how much was taken out for taxes and any contributions such as those to a retirement plan or health savings account.
For those of you that are self-employed, you should receive a 1099-MISC. The 1099-MISC is for miscellaneous income received such as fees for freelance work. Please note an employer or client is not required to file a 1099-MISC if they didn’t pay you at least $600 in the calendar year.
For those that haven’t receive a W-2 or 1099-MISC, you can provide proof of income earned by using a copy of Account Receivables or copies of deposits made to your bank account from employers or clients.
Support Documents for Tax Credits and Deductions
The only way to boost your refund or cut down the amount of tax you owe is to claim tax credits and deductions. Most everyone qualifies for some type of tax credit or deduction but you have to have the right paperwork.
If you’re paying off a mortgage, then you can deduct the interest you pay on your taxes. Your mortgage company will send Form 1098 provided at least $600 in interest was paid last year.
Are you or a dependant child attending college? Higher-education expenses are deductible in multiple ways. Students will receive Form 1098-T, which shows qualifying education and also Form 1098-E for student loan interest.
Parents of dependent children get hefty deductions on their tax returns each year. In addition, parents can claim medical and dental expenses, child care and more. Are you considering adoption? If so, know that the costs associated to adopting a child can be deducted as well.
There are also a myriad of other deductions you can take such as charitable donations, unreimbursed employee expenses and more. Don’t worry about missing an important deduction, as most of the best online tax filing services will remind you about them while filing.
These deductions require you keep meticulous records and keep copies of receipts. Ever see someone take a shoebox full of receipts to their tax preparer? Well, it’s time to get a shoebox.
Don’t Forget About Health Care Documentation
If you have healthcare, you should receive a form in the mail providing proof of insurance. For policies purchased through a state or federal exchange, Form 1095-A, Health Insurance Marketplace Statement will be issued.
All others insured will received either Form 1095-B or Form 1095. Form 1095-B is proof of insurance from either your insurer or employer if the company has under 50 employees. Otherwise, you will get Form 1095-C.
This documentation is necessary to avoid paying the shared responsibility payment penalty. The penalty current is a minimum of $695 per adult with a maximum penalty of $2,085.
Again, don’t worry if any of this seems confusing as the best tax software options like TurboTax and FreeTaxUSA will walk you through everything you need to do.
Hold On To Your Forms After Filing!
A mistake made by many people is throwing out supporting documents once a tax return is filed. While you may be tempted to get rid of everything associated with the return, it’s a wise idea to keep those records.
In most circumstances, you will want to keep forms and receipts for three years from the time a return is filed. If you have to pay tax, keep employment records such as a W-2 or 1099 for 4 years after the tax is paid.
If you don’t retain those records, the IRS can reject certain deductions and you’ll have to fork over additional tax.