top of page

2024 Tax Season Checklist: What Documents You Need to Gather



Whether you opt for professional assistance or decide to tackle your taxes yourself, there are certain essential pieces of information and documentation that you'll need to complete your tax return. 


Here's a helpful tax preparation checklist that most taxpayers can use to ensure a smooth filing process.



Personal Information


Let's begin with the fundamental items on any tax preparation checklist.


Last Year's Tax Returns: While not strictly required, having copies of both your federal and, if applicable, state tax returns from the previous year can serve as useful references to refresh your memory about your prior filings and the supporting documents you used.


Social Security and/or Tax ID Numbers: Ensure you have these identification numbers readily available for yourself, your spouse, and all dependents. Remember, dependents can include not only children but also elderly parents and other qualifying individuals.


Identity Protection PIN (IP PIN): If you, your spouse, or a dependent have been issued an identity protection PIN by the IRS, it's advisable to have this PIN handy as well.


Income Documentation:

Compile all the documents that verify the income you earned in the previous year.


W-2 Forms: Employers are required to issue or mail your W-2 forms by January 31st, so keep an eye on your physical and electronic mailboxes.


1099 Forms: These informational records detail additional income you received throughout the year. Various types of 1099 forms exist, each with a different suffix, depending on the type of payment you received. For instance, form 1099-NEC pertains to contract work, while a 1099-K is typically received if you were paid through a third-party platform like PayPal or Amazon. Investment earnings are reported on forms such as 1099-INT (interest), 1099-DIV (dividends), and 1099-B (broker-handled transactions). Expect to receive these forms between January 31st and mid-February.


Deductions

Deductions serve to reduce your taxable income, potentially resulting in a lower tax liability. Proper documentation is crucial for claiming deductions, not only to safeguard your position in the event of an audit but also to maximize your tax savings. While gathering these records may require some time, the potential benefits can be significant.


Retirement Account Contributions: You can deduct contributions made to a traditional IRA or a self-employed retirement account, provided you stay within the contribution limits.


Educational Expenses: Students may claim deductions for tuition and fees paid, as well as for interest paid on student loans. These deductions typically require Form 1098-T for education transactions and Form 1098-E for student loan details.


Medical Bills: Medical expenses can provide tax savings if they exceed 7.5% of your adjusted gross income for most taxpayers.


Property Taxes and Mortgage Interest: Information regarding property taxes and mortgage interest can be found on Form 1098, sent by your lender. This document will detail the amounts escrowed for property taxes and the home loan interest you can claim on Schedule A.


Charitable Donations: Keep receipts for charitable donations to ensure they are eligible for tax deductions. The IRS may disallow your claim without proper verification.


Classroom Expenses: If you're an eligible educator, you can deduct up to $300 spent on classroom supplies.


State and Local Taxes: You can deduct various other taxes, including state and local income tax or sales taxes (up to $10,000, including property taxes). While you don't need receipts for sales tax, it's wise to retain them for major purchases.


Please note that state income taxes paid should be reflected on your W-2, but remember to include any state-estimated taxes you paid during the year.


Tax Credits



Tax credits are even more valuable than deductions as they directly reduce your tax liability. However, like deductions, proper documentation is essential to claim them. Here are some popular tax credits:


American Opportunity and Lifetime Learning Credits: These education-related credits can lead to significant savings. You'll need Form 1098-T to claim them.


Child Tax Credit: The standard child tax credit can be worth up to $2,000 per child for tax year 2023. If you've expanded your family through adoption, additional tax credits may apply.


Retirement Savings Contributions Credit (Saver's Credit): Contributions to a 401(k), similar employer-sponsored plans, or an IRA could make you eligible for this credit.


Payments

Most of us have income taxes withheld from our paychecks to cover our tax liabilities, with this amount specified on our W-2 forms. If you made federal estimated tax payments during the year, keep this information handy as well.


This tax preparation checklist covers common preparation issues applicable to most filers. Keep in mind that tax situations vary, so be prepared to customize this checklist to your specific circumstances. Remember that proper documentation is key to a smooth and successful tax filing process.


Disclosure Statement:

The information provided in this blog is intended for general guidance and educational purposes only. It is not a substitute for personalized professional advice. Every individual's financial situation is unique; therefore, you should review your specific needs and consult with qualified professionals, such as certified public accountants or tax advisors, before making any decisions. While we strive to provide accurate and up-to-date information, we do not guarantee the accuracy, completeness, or currency of the content. By using this blog, you acknowledge that you have read and understand this disclaimer, and you agree to use the information responsibly, in conjunction with advice from qualified professionals, to make informed financial decisions.


Comments


bottom of page