Assembling the paperwork you need to file taxes can take time, but it provides you with the information you need to complete and file your tax return. Check any forms you receive from others for errors before submitting them with your tax return. Depending on the income you report and deductions you claim, there are several sources of information on which you may have to rely to file your taxes.
Examples of earned income include wages, tips, salaries and earnings from self-employment. Wages and salaries may include overtime pay and bonuses. Documents that show how much income you’ve earned for the tax year include W-2 forms from employers. Federal Schedule C is what you use to report income from self-employment. Tips are taxable income subject to federal income tax withholding. Use form 4070A -- Employee’s Daily Record of Tips -- to report tips to your employer so he can withhold the taxes you owe on your tips. Rents and royalties may qualify as either earned or unearned income depending on whether they are considered earnings from self-employment.
Unearned income is income that comes from sources other than employment and may include interest from savings, dividends from investments and income from rental property that is not earned from self-employment. Form 1099-INT is the form taxpayers receive at the end of the year showing interest income they received for the year. If you receive at least $10 of interest payments during the year, the payer must provide you with a 1099-INT form. Similarly, investors who receive a minimum of $10 in dividends for the year receive a 1099-DIV to report income to the IRS. Taxpayers use 1099-MISC to report miscellaneous income such as rents, royalties, fees, commissions and income earned as an independent contractor.
Form 1099-R shows distributions from retirement accounts such as pensions, individual retirement accounts and annuities. The form shows the gross distribution for the year, the amount that is taxable and the amount of federal income tax that has been withheld. Depending on whether you receive income from other sources, your Social Security retirement benefits may also be taxable. Social Security will mail you a Social Security benefit statement -- Form SSA-1099 -- at the end of each year. Use this form to report Social Security benefits that you collected during the year. The form will show the amount of any taxes you requested Social Security to withhold. You will receive Form 1099-G if you received unemployment compensation, a state or local income tax refund, agricultural payments or a taxable grant during the tax year.
Claiming Credits and Deductions
Gather together billing statements, receipts and canceled checks showing proof of tax deductions for which you might qualify. Expenses that can help reduce your tax liability and maybe get you a larger refund include education expenses, childcare expenses and certain costs associated with the cost of home ownership. If you itemize deductions, you can deduct real estate taxes and interest that you’ve paid on your mortgage loan. You will receive Form 1098 from your lender showing the amount of interest you have paid for the year on your mortgage or home equity loan. Additional information you will need to deduct childcare expenses includes the provider’s name and address and tax ID or Social Security number. You can also deduct charitable contributions but must have receipts to show what you’ve donated. Likewise, if you are claiming any medical or dental expenses, you will need receipts showing the amounts you’ve paid for which you have not been reimbursed.
Amber Keefer has more than 25 years of experience working in the fields of human services and health care administration. Writing professionally since 1997, she has written articles covering business and finance, health, fitness, parenting and senior living issues for both print and online publications. Keefer holds a B.A. from Bloomsburg University of Pennsylvania and an M.B.A. in health care management from Baker College.