It’s a New Year, which means you’ll start receiving tax documents from your employers, investments, and contractors. That’s why this week’s MoneyDo is Get Yourself Organized & Prepared To File Your 2018 Tax Return.

One easy way to keep yourself from being overwhelmed is to create a folder on your computer’s desktop – or a real folder on your real desktop or kitchen counter. As you get tax documents and collect information, you can store them inside as you prepare.

Personal information you’ll need –

  • Social Security numbers and dates of birth for you, your spouse and your dependents.
  • Copies of last year’s tax return for you and your spouse are helpful. (If you filed using one of the popular tax filing websites, they may have archived a copy for you online).
  • Bank account number and routing number for making a payment or receiving a refund.
  • Foreign bank account information—location, name of bank, account number, peak value of account during the year

As you start receiving information on your income sources, make sure you review your withholding.  This would involve reviewing your payroll exemptions, and the rate you are using to have taxes withheld form IRA, pension, or social security income.

Information about your income you’ll need, if applicable –

  • W-2 forms for you and your spouse
  • Investment income—various forms 1099 (-INT, -DIV, -B, etc.), K-1s, stock option information
  • Income from state and local income tax refunds and/or unemployment: forms 1099-G
  • Alimony received
  • Business or farming income—profit/loss statement, capital equipment information
  • If you use your home for business—home size, office size, home expenses, office expenses.
  • IRA/pension distributions—forms 1099-R
  • Rental property income/expense—profit/loss statement
  • Social Security benefits—forms SSA-1099
  • Income from sales of property—original cost and cost of capital improvements, escrow closing statement, cancelled debt information (form 1099-C)
  • Prior year installment sale information—forms 6252, principal and Interest collected during the year, SSN and address of payer
  • Other miscellaneous income—jury duty, gambling winnings, Health Savings Account (HSA), scholarships, etc.

Adjustments to your income –

This list refers to items or incidences that may help to reduce your taxable income, which in turn can increase your tax refund or lower the amount you owe.

  • IRA contribution
  • Student loan interest
  • Health Savings Account (HSA) contributions
  • Self-employed health insurance payments
  • Keogh, SEP, SIMPLE and other self-employed pension plans
  • Alimony paid
  • Educator expenses

Itemized tax deductions and credits-

While itemizing deductions have change with the new tax reform, it may still be beneficial to determine how much your itemized deductions are as there may be other benefits for some of the deductions.  In order to itemize, try to collect the following documentation to make sure you get all the deductions and credits available to you.

  • Education costs—forms 1098-T, education expenses
  • Child care costs—provider’s name, address, tax id, and amount paid
  • Adoption costs—SSN of child, legal, medical, and transportation costs
  • Home mortgage interest and points you paid—Forms 1098
  • Investment interest expense
  • Charitable donations—cash amounts and value of donated property, miles driven, and out-of-pocket expenses
    • Be sure to have proper documentation from the charity prior to filing your return
  • Casualty and theft losses—amount of damage, insurance reimbursements if you lived in a federally declared disaster area
  • Medical and dental expenses

Taxes you’ve paid –

Keep track of the taxes you’ve already paid so you can prevent overpaying.

  • State and local income taxes paid
  • Real estate taxes paid
  • Estimated tax payment made during the year, prior year refund applied to current year, and any amount paid with an extension to file.