Four documents without which you cannot file a tax return
If you are waiting for a tax refund and want to receive this money as soon as possible, prepare in advance all the documents necessary to fill out the declaration, writes USA Today. This will allow you to file a declaration and receive a refund as quickly as possible.
Remember that without the 4 tax documents below, an attempt to file a return may result in errors. As a result, you will have to correct the data, which is fraught with a delay in receiving a return.
1. Form W-2
If you are employed, you will receive Form W-2 from your employer. The IRS requires him to broadcast it before January 31, although some of them do so even earlier.
Form W-2 contains a lot of information that goes directly to your tax return. You will find there your income necessary for calculating both federal and regional taxes, as well as the amounts that have already been deducted from your salary for income tax, social security medical insurance, contributions to pension plans, etc.
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Some taxpayers believe that they can predict the contents of Form W-2 based on other sources, but in such cases errors are often made in the calculations.
2. Forms 1099
There are many different types of tax information forms 1099, and they cover almost all the ways that people make money. Investment income usually comes in such forms as 1099-B, 1099-DIV for dividend income, 1099-INT for interest on deposits. Income from work as an independent contractor is usually indicated in 1099-MISC. Forms 1099 are usually sent to the taxpayer from late January to mid-February.
As with W-2, your employers or other income providers must file Form 1099 with the IRS and provide copies to you. In the event of data inconsistency, problems may arise, therefore it is better to fill out the declaration already having your form 1099 at hand.
3. Form 1098
W-2 and 1099 are income-oriented, but other forms give you important information about the deductions you may receive.
Form 1098 covers the following points:
- Form 1098 contains information about your mortgage, including interest, taxes, and any mortgage insurance premiums you paid. They can be deducted from taxable income.
- Form 1098-T displays information about the money paid for tuition, and related fees that taxpayers can use to receive tax credits and deductions related to education.
- Form 1098-E reports interest on student loans, which can also often be deducted from taxes.
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Again, you can get the information contained in these forms from other sources. But since Form 1098 makes it easy to copy data directly to your tax return, the safest thing you can do is wait for it to be received. As a rule, she arrives to the taxpayer by the end of January.
4. Account statement for 2020
Taxpayers should receive reports on their accounts at the end of the year from their financial providers in order to use them to calculate taxes and deductions.
The presence of final statements on bank and investment accounts will allow you to check the amounts of income displayed in your 1099 forms. The statements from bank accounts will also indicate the amounts you paid that can be deducted from your taxes. Similarly, year-end credit card statements may also include deductible expenses.
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