Preparing your tax return, whether independently or with a professional, should start with organization. Collecting the proper documents before starting your taxes helps ensure accuracy, reduces stress, and may prevent missed deductions or credits.
Here’s a tax preparation checklist to help you get started.1
Prior-year tax return
Having your tax return from last year on hand will remind you of certain elections made, income reported, deductions taken, depreciation schedules, carryovers, etc. If you e-filed and didn’t print a copy, retrieve your identity protection PIN (IP PIN) to access the return.
Income and earnings records
- W-2 forms from all employers
- Equity compensation records, including 83(b) elections, cost basis, and holding periods
- 1099-INT, 1099-DIV, 1099-B, or consolidated brokerage statements showing investment interest, dividends, and capital gains
- 1099-NEC, 1099-MISC, and 1099-K forms for freelance, contract, or side income
- 1099-R statements for retirement account distributions (401(k), IRA, pensions)
- Records of qualified charitable distributions (QCDs) from IRAs
- Custodians may report QCDs on your 1099-R in box 7 using Code Y. Since this is the first year, it is recommended to keep separate records of your QCDs to verify the accuracy of the number.
- SSA-1099 or RRB-1099 for Social Security or railroad retirement benefits
- Rental income records for properties rented for more than 14 days during the year
- Schedule K-1 forms from partnerships, S corporations, or master limited partnerships
- Profit-and-loss statements and expense receipts for self-employed individuals
- Alimony received and former spouse’s Social Security number, if applicable
Deductions and credits documentation
- Receipts for charitable contributions and donations
- Medical and dental expense records (including receipts for prescriptions)
- Form 1098 for mortgage interest and real estate taxes
- Property tax statements not included on Form 1098
- Education expenses, including Form 1098-T and student loan interest
- IRA and self-employed retirement plan contribution records
- Health savings account (HSA) contribution and distribution statements
Homeownership and property records
- Closing statements for homes bought or sold during the tax year
- Records of home improvements that may qualify for tax credits or deductions
- Documentation for energy-efficient upgrades, including electric vehicles, solar panels, or qualifying appliances
Health insurance
- Form 1095-A, 1095-B, or 1095-C, depending on your coverage
Miscellaneous documents
- Records of estimated tax payments
- Social Security numbers and dates of birth for all individuals on your return
- Bank routing and account numbers for direct deposit of refunds
| Pro Tip:
Maintain a centralized system for your tax records, such as a secure digital folder or labeled paper file. As documents arrive throughout the year, store them immediately. A proactive approach to organization streamlines tax preparation and supports better tax planning decisions. |
Following this checklist can help ensure you gather the essential tax filing documents. However, individual circumstances may require additional records. Tax laws and reporting requirements continue to evolve, making professional guidance increasingly valuable.
FAQs
What documents should I collect before starting my taxes?
You should collect income statements, deduction receipts, prior-year tax returns, and personal identification information. Collecting these documents before starting your taxes helps prevent errors and delays.
Why is a tax documents checklist important?
A tax documents checklist helps ensure all required forms and records are included, reducing the risk of IRS notices or missed deductions.
Should I keep digital or paper tax records?
Digital records are acceptable and often preferred, provided they are securely stored and easily accessible. Many taxpayers maintain both formats for redundancy.
How long should I keep tax records?
Generally, keep tax documents for at least seven years, though some records related to property or retirement accounts should be retained longer.
Can a professional help identify missing tax documents?
Yes. A tax professional can review your documents needed to file taxes and identify gaps that may affect your return or tax strategy.
Mercer Advisors prepares tax returns for clients and coordinates tax planning with investment management, estate planning, and charitable giving strategies. If you are a client, contact your wealth advisor to learn more. If you are not currently a client and would like to learn more, let’s talk.
