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What to Collect Before Doing Taxes

Bryan Strike, MS, MTx, CFA, CFP®, CPA, PFS, CIPM, RICP®

Director, Financial Planning Research & Education

Summary

As tax season approaches, organizing your documents is crucial for a smooth and stress-free filing process.

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Whether you’re preparing taxes yourself or seeking assistance from a professional, having all the necessary documents at hand is paramount. Here’s a comprehensive guide on the essential items to collect before diving into your tax preparation.

Prior Year Tax Return

  • Having last year’s tax return on hand will remind you of certain elections made, income reported, deductions taken, depreciation schedules, carry overs, etc.

Income

  • W-2 forms from your employer(s)
  • Equity compensation arrangements including 83(b) elections, basis information, and holding periods
  • 1099-INT, 1099-DIV, 1099-B and/or 1099 Consolidated brokerage statements showing investment interest, dividends, and capital gains
  • 1099-NEC, 1099-MISC, 1099-K, and other forms for any freelance work, contract work, or side gigs
  • 1099-R statements for retirement account distributions (e.g., 401(k), IRA)
    • Records of any Qualified Charitable Distribution (QCD) made from your IRA as these amounts will need to be used to reduce the 1099-R distribution amount
  • SSA-1099 for Social Security or RRB-1099 for railroad benefits
  • Income from rental properties longer than 14 days during the year
  • Schedule K-1 from partnerships or S-Corporations, including many oil and gas master limited partnership interests
  • Profit and loss statements for self-employed individuals — this includes all business-related expenses, including receipts for supplies, equipment, and travel
  • Amount of alimony received and Social Security number of ex-spouse if divorced prior to 2019

Deductions

  • Receipts for charitable donations
  • Medical expenses, including receipts for healthcare services and prescriptions
  • Form 1098 for mortgage interest and real estate tax
  • Property tax statements if not included in the form 1098
  • Educational expenses, such as tuition payments and student loan interest on 1098-T
  • Contributions to an IRA or a self-employed retirement plan
  • Documentation of Health Savings Account (HSA) contributions and withdrawals

Homeownership

  • Closing statements for any homes bought or sold during the tax year
  • Records of home improvements that may qualify for tax credits or deductions
  • Energy-efficient upgrades documentation (e.g., receipts for energy-efficient appliances)

Health Insurance

  • Form 1095-A, 1095-B, or 1095-C, which provide information about health insurance coverage

Miscellaneous

  • Records of estimated tax payments made during the year
  • Social Security numbers for yourself, your spouse, and any dependents
  • Date of birth for all individuals listed on the tax return
  • Bank account information for direct deposit of any tax refunds

Before you begin the process of filing your taxes, take the time to gather all the necessary documents and information. Being organized and having everything you need at your fingertips can streamline the tax preparation process and ensure that you take advantage of all available deductions and credits.

Whether you’re filing your taxes independently or seeking assistance from a tax professional, having the right documents collected in advance will make the process smoother and less stressful. By following this guide and collecting the essential items mentioned, you’ll be well-prepared to tackle your taxes with confidence. Did you know that Mercer Advisors prepares tax returns for clients? If you’re interested in learning more, contact your advisor. Not currently working with Mercer Advisors, contact us.

Mercer Advisors Inc. is a parent company of Mercer Global Advisors Inc. and is not involved with investment services. Mercer Global Advisors Inc. (“Mercer Advisors”) is registered as an investment advisor with the SEC. The firm only transacts business in states where it is properly registered or is excluded or exempted from registration requirements.

Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.