When tax time rolls around, you may not be able to locate your previous year's tax return. While the previous year's return is useful, it is not absolutely necessary to preparing your current-year return. Take a careful step-by-step approach to preparing the current year’s tax return and ensure all taxable and deductible events are included. It helps to make a list of any new taxable or deductible situations before even beginning to prepare the return.
Gather your tax documents for the current year, including W-2's, 1099-INT, 1099-DIV, 1099-B (for stock sales), K-1's, 1098s (for mortgage interest), real estate tax documents. Don’t forget receipts for deductible purchases and documentation of any charitable contributions, including non cash items. You can deduct the fair market value of non cash donations like the electronics, clothing and books you give to Goodwill. Fair market value is the price a buyer would be willing to pay for these things if, for example, you put them on eBay or Craigslist.
Add up the totals you spent in each category of deductions. For example, business expenses, medical costs and donations. Enter the data in the relevant fields of IRS Form 1040 and its related schedules. For example, dividends received per Form 1099-DIV are reported on Schedule B, Interest and Ordinary Dividends.
Review your tax return carefully. Think about the past year and any new income-producing activities or expenses you incurred. For example, did you open a new bank account that provides interest? Did you rollover a 401(k) from an old job into a new 401(k) or an individual retirement account? Did you refinance your home or incur a second mortgage? Did you donate to a new charity this year or donate more than usual to an old charity?
Enter any additional information into your return, complete all calculations and recheck your numbers for accuracy. After you’ve finished preparing your tax return from the documents you have, review it once from top to bottom, then leave it alone for a few days.
After you’ve had a little break from it, review the return once again to ensure all taxable and deductible situations have been covered, and your calculations are correct. Once you’re certain that your return is complete and accurate, mail it to the appropriate IRS office based on the state you live in. You can find tax filing addresses on the IRS’s website. In some cases the address is different depending on whether or not you’re including a payment with your return. So be sure to scroll down to make sure you are using the right address.
IRS tax forms change every year. Use the correct form for the tax year you are preparing your return for.