Essential Documents For Income Tax Preparation

Whether you're preparing your taxes yourself or hiring a professional, it's important to gather all the necessary documents to ensure accuracy and avoid any potential penalties. Here are a few of the key documents that you should have on hand when preparing your income taxes.

W-2 Forms 

W-2 forms are issued by your employer and show the total amount of money you earned during the year, as well as the amount of federal, state, and city taxes withheld from your paychecks. 

You should receive a W-2 form from each employer you worked for, as an employee, during the tax year.

1099 Forms 

If you received income from sources other than an employer, such as freelance work, interest, dividends, or rental property, you'll likely receive a 1099 form. 

There are several different types of 1099 forms, each reflecting a different type of income. Ask any company that you subcontracted for if they're issuing one, and check with any brokerage that you have stocks or mutual funds with. Even your bank might issue a 1099 if you had a certificate of deposit or a high-yield savings account.

Bank Statements 

Bank statements can provide information on interest earned from savings accounts, investment accounts, and other sources. If you received any interest income during the year, you'll need to report it on your tax return, so make sure to gather all relevant bank statements.


Receipts can be used to support deductions and credits claimed on your tax return. If you're claiming deductions for things like charitable contributions, medical expenses, or business expenses, you'll need to have documentation to support those claims.

Investment Statements 

If you own stocks, bonds, or other investments, you'll need to report any capital gains or losses on your tax return. Investment statements can provide information on the cost basis of your investments, as well as any gains or losses realized during the year.

Mortgage Interest Statements 

If you own a home, you may be able to claim a deduction for the mortgage interest you paid during the year. Your mortgage lender should provide you with a statement showing the amount of mortgage interest you paid during the year.

Health Insurance Statements 

If you have health insurance, you may be able to take advantage of a tax credit, which helps to lower the cost of your health insurance premiums. You'll need to provide information on your health insurance coverage when preparing your tax return. 

For more info about income tax preparation, contact a local company. 

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Do you prepare your own taxes each year? Have you received letters months after you have filed your taxes and spent your return telling you that you have made an error and that you owe the IRS a check to cover the discrepancy? This is something that has happened to me four times in the past eight years. Because of small errors, I have had to come up with money that I had to pay back and it made things more difficult than you might think. Since the last time, I have been paying to have my taxes prepared professionally and it has actually helped a lot. Find out what a difference a professional tax preparer could make on your taxes this year here on my blog.