As the year comes to an end, there are some steps you can take now to make sure your tax filing goes smoothly in 2022.
Gather and Organize Tax Records
Having your tax records organized makes prepping a complete and accurate tax return much easier! Avoid making errors or omissions by having these documents on hand while filing:
- Records of all Income Received -
- Forms W-2 from your employer(s)
- Forms 1099 from banks, issuing agencies, dividends, pension distribution, annuity, or retirement plans
- Form 1099-K, 1099-MISC, W-2 or other income statements for gig economy workers
- Form 1099-INT for interest received
- Other income documents and records of virtual currency transactions
- Social Security Details – be sure you have the full names and social security numbers of all individuals that will be included on your tax return, including your spouse and/or dependents
- A Copy of Last Year’s Tax Return
- Tax Deduction Documents -
- Form 1098 from your mortgage lender
- Form 1098-C for any large-scale charitable donations to a tax-exempt organization
- Form 1098-E/T - for tuition paid or student loan interest paid
- Receipts of Expenses for medical bills, charitable contributions, retirement contributions, educational expenses, childcare expenses, etc.
- Business Expenses – if you are a business-owner or self-employed, be sure that you also collect your business expenses – receipts, invoices, mileage logs, etc.
You should gather any documents from these types of earnings and keep copies of tax returns and supporting documents from at least the last three years. Check out our previous Blog posts on how to ensure you’re keeping your records save and secure.
These income documents are very important – in addition to ensuring that you comply with your legal obligation as a Taxpayer to report all income – these documents also help determine your eligibility for deductions or credits.
In particular for the 2022 tax filing season, if you need to reconcile your advance payments of the child tax credit and premium tax credit, you will need your 2021 information. If you did not receive your full third Economic Impact Payment, you will need your third payment amounts to claim the 2021 recovery rebate credit.
Other documents to have on hand:
- Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments
- Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit
- Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance premium tax credits for Marketplace coverage
Confirm mailing and email addresses and report name changes
Make sure that each of your employers, banks, and other payers have your current mailing and email address so that forms make it to you on time. If you need to update your address with the IRS, use Form 8822, Change of Address to report address changes and use USPS.com to forward your mail. The Social Security Administration should also be notified of a legal name change.
Visit account information online
If you haven’t already set up your online account with the IRS, do so as soon as possible so you can securely access the latest information available about your federal tax account.
Review proper tax withholding and make necessary adjustments
If you received a large refund in 2021 or alternatively, if you owed a balance at the end of the year, you may want to consider adjusting your withholding. This can help avoid a tax bill or it will help you keep more money on payday. Be sure that you also evaluate your tax withholdings if you have recently experienced any significant life changes- getting married or divorced, having children, or getting a new or second job.
Keep up with the latest IRS tax information and firm updates with our weekly blog posts or by following us on our social media pages! Give us a call for a free initial consultation!
