5 Things to do to Prepare for Tax Season

Here are 5 Things to do to ensure you are prepared for your 2021 tax return preparation. The following steps are intended as a starting point for all personal tax returns.

  1. Gather all your income documents
    If you are an employee of a business, you will receive a W2. If you are a contractor, you will receive a 1099-NEC. Both documents must be sent to you by your employer by January 31st. Other common income documents are SSA-1099 (social security) and 1099-G (unemployment). If you changed employers in 2021, don’t forget to reach out to your old employer to get those documents. If you own a rental property, be sure to list your income in a tidy spreadsheet for your tax preparer. If you are invested in any businesses, they will provide you with a K-1 that you must send along to your tax preparer before your 1040 return can be prepared.
  2. Gather all your bank & investment documents
    We don’t need a copy of your bank statement but, we do need any 1099-INTs for interest earned. We will also need a 1099-DIV and 1099-B from your investment accounts (stocks, cryptocurrency, etc.). Your bank or investment company is required to provide these to you by February 15th.
  3. Gather expense documents
    If you own property, your tax preparer will need a1098 mortgage interest statement, indicating how much you paid in property taxes, and the insurance premiums amounts for every property you own. For rental properties, make a spreadsheet with all the expense for the property. Other common expense documents are student loan and tuition documents (1098-E and 1098-T), medical expenses, and charitable contributions. You should receive all of these documents by late February.
  4. Check my last blog post
    In my last blog post, “5 Things to consider for your 2021 Tax Return,” I discuss some 2021 specific tax situations you may find yourself in such as stimulus checks, Snow-Mageddon, and the child tax credit. If those situations apply to you then, you will need to gather some extra documents for your tax preparer.
  5. Inform your tax preparer of any major financial or personal events
    Did you buy a house in 2021? Did you get married? Divorced? Had a baby? Start a new business? We want to know! Not only do we want to celebrate the wins with you, but we also want to help you navigate the struggles and knowing this information allows us to give you the best tax benefit possible.

Our best advice is to send any official looking document to your tax preparer, so your return is as accurate as possible. View our Resources to download our Tax Year Questionnaire and Personal Income Checklist to help organize your documents.