Prepare to File Your Taxes Checklist
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Prepare to File Your Taxes Checklist

Tax season is in full swing and that means it’s more important than ever to gather all your paperwork. To help you get started, here’s a prepare to file your taxes checklist.

Prepare to file your taxes

Whether you’re planning on doing your taxes yourself or turning your paperwork over to a tax professional, there are certain documents that make the filing process easier and as accurate as possible.

So let’s get your paperwork in order. While not all of these items will apply to you, look over the list carefully to make sure you’ve got the ones that do.

Personal Documentation

You’ll need the following for yourself, your spouse (if you’re filing jointly) and any dependents:

    • Social Security number
    • Birth date
    • Alimony paid to an ex-spouse including his/her full name and Social Security number
    • Prior year’s tax return
    • Driver’s license or government issued ID, if planning on e-filing

Income Documentation

Gather the following paperwork for yourself, your spouse and any dependents. Remember not everything will apply to you, so don’t worry if you don’t have all of the following forms.

  • Employment income (W-2s)
  • Investment and interest income forms, such as interest on your mortgage, RV loan or student loans (1099-INT, 1099-DIV, 1098)
  • Income records from any cancelled debt (1099-C)
  • Income records for sales of stocks or other assets (1099-B, 1099-S)
  • Rental property income and expenses
  • Business income and expenses, remember to keep records of assets bought including dates, costs and business use
  • Social Security income (SSA-1099)
  • IRA and pension distribution forms (1099-R)
  • Any other miscellaneous income – state income tax refunds, unemployment benefits, alimony, gambling income, jury duty compensation, prizes and awards, etc. (1099-Misc, 1099-G)

Now that you’ve gathered all the documents you think you need. Here’s a list of other items that you might have missed. This list is important to help you maximize your deductions.

Maximize Deductions

Use the following to help you get the most out of deductions. Again, this is only a guide to help you prepare to file your taxes.

1. Charitable Contributions

Charitable contributions are taken on itemized deductions. If you think you’ll have enough to itemize, then this can definitely help you. I have also found some states will allow you to take charitable contributions on a state return, if you weren’t able to itemized deductions on your Federal return.

Include in charitable contributions any cash or property donations to charitable organizations like churches, schools and nonprofits. Keep written proof of those donations (including estimated value of your property donation) along with dates and items donated. I usually recommend photographing all charity donations as proof.

2. State Sales Tax

If you itemize deductions, taxpayers in all 50 states are allowed to deduct either state income tax or the state sales taxes paid for that year. However, unless you’ve made significant purchases in the past year and properly tracked everything, it’s probably easier and more advantageous to simply deduct your state income tax. The exception to this is if you live in a state with no income tax such as Florida, Texas and South Dakota. Here you’ll claim a deduction for sales tax you paid over the year.

However, if you bought a big ticket item during the tax year, like an RV, boat, jewelry, auto or home furnishings, this is where you can take the sales tax on those items.

3. Medical Costs

If you have a high deductible health plan and make HSA contributions during the tax year, you take this deduction as an above-the-line tax adjustment, which means that you can deduct these contributions regardless of whether or not you itemize your deductions. Contribution limits for 2017 are single $3,400 and family $6,750.

You may be eligible to deduct qualified medical expenses including dentist, doctor visits, prescription drugs, medical equipment and even mileage to drive to appointments or the hospital. If your total cost for the year exceeds 10% of your adjusted gross income, you can itemize these expenses. It is important you have receipts and records for all these expenses. You may even be able to see some of these records on your health insurance website should you have a login.

4. Work Related Expenses

If you have unreimbursed employee expenses, such as the cost of buying a workplace uniform, travel costs and union dues, you may be able to take this deduction. In order to take this deduction, your expenses must be greater than 2% of your adjusted gross income.

*This deduction goes away for 2018, so take advantage of it while you can.

5. Childcare Costs

You can claim childcare expenses for qualifying dependents age 13 or younger (up to $3,000 for one child or up to $6,000 for two or more children) under the Child and Dependent Care Credit. This is an important credit since childcare costs are hardly inexpensive. You must have paid the expense so you can work and it must be a qualifying child care facility or provider who provides you with the necessary paperwork.

6. Caring For An Elderly Parent

If you’re paying for aging parents or a handicapped family member of any age, you may also qualify for the Child and Dependent Care Credit. The deduction amounts are the same as for childcare costs, but you can apply them to caring for a person of any age who is physically or mentally incapable of caring for him/herself. Again you must have the proper paperwork from the care provider.

7. Educational Expenses

Education credits like the American Opportunity Credit and the Lifetime Learning Credit can be subtracted in full from your federal income tax. Whether paying for your own secondary education or for a dependent, make sure to have any tuition statements (form 1098-T), and receipts for any qualified educational expenses like textbooks.

If you’re a K-12 teacher, you can claim classroom expenses up to $250, so gather up receipts for any supplies and other materials you purchased for your students.

8. Energy Efficiency Credit

While there is no longer a tax credit for installing energy efficient home improvements like insulation and windows, the Residential Renewable Energy Tax Credit allows taxpayers to claim 30% of solar energy property, fuel cell property, small wind-energy property and geothermal heat pumps. Keep all receipts and paperwork in order to claim this credit.

While this credit is non-refundable, you can carry any unused portion forward to the following year.

9. Earned Income Tax Credit (EITC)

If you had low-to-moderate income in 2017, you may be able to claim this credit. It is designed to help working people who earned under certain amounts for a household. To find out if you qualify, visit the IRS EITC Assistant.

10. Retirement Tax Credit

For low-to-moderate income earners, this credit allows you to claim a credit for retirement contributions up to $2,000 for individuals and $4,000 for married filing jointly. This is a great credit to take advantage of while also saving for retirement.

Before you start diving into your taxes, spend a few hours making sure you have the proper paperwork. The IRS has the right to ask for your documentation, so keep your files organized and store everything in a safe place. I recommend keeping electronic records using a cloud service like Dropbox or Google Drive.

Gathering the necessary paperwork holds the added benefit of making sure you don’t miss any legitimate deductions. By maximizing any deductions, you’ll be able to keep more money in your pocket which means more cash to pay off debt, invest, or build savings.