Recent Posts:Checklist: What Tax Documents Do I Need To Keep?With electronic communication taking over, many of us don’t pay much attention to mail anymore. But tax time is coming, so this month, you’re likely to start seeing a lot of documents in the mail from the IRS. Do you know what the documents are and what you’ll need to keep? Here’s a guide for what to keep out of your “junk mail” pile. New This Year There are two new documents you need to be on the lookout for to complete your 2021 tax return.
If you lose these letters or if the information is outdated, you can obtain the information from your IRS Account. To create or access your account, you can follow the instructions in our handy IRS Account Setup Guide. Form W-2:If you’re a salaried employee, your W-2 should be available from your employer by the end of January. Form W-2 is also known as the “Wage and Tax Statement,” and it’s one of the most important documents you need for your tax return. As the name suggests, it includes your income from the prior year and how much your employer withheld in taxes. If you earned income from gambling, you might also see a W-2G. Form 1099:Non-employment income is generally reported on Form 1099. There are several different types of Forms 1099, and any you receive should be given to your tax preparer to complete your return.
Form 1098:While the documents listed above report money that was paid to you, Form 1098 reports money you paid, particularly for homeownership and educational expenses.
Form 8606:You’ll use this form to report IRA-related transactions, such as distributions, converting a traditional, SEP or SIMPLE IRA to a Roth IRA, and particularly, to report nondeductible contributions to a traditional IRA. Nondeductible contribution refers to any money you put into a traditional IRA that you don’t deduct on your return. Form 5498:Other IRA contributions you’ve made are reported using Form 5498. Your IRA trustee or issuer files this form, so the copy you’ll receive in the mail is just for your own records. IRS Notices:If you receive any notices from the IRS, make sure you save them. There are many reasons the IRS may send you a notice, and they often contain valuable information. No matter what type of notice you receive, talk to your tax preparer about the next steps you should take to make sure you respond appropriately. Schedule K-1:This document is used to report the income, losses, and dividends of a pass-through organization, such as an S corporation or Partnership, to its shareholders and partners. Each owner uses their K-1 document to prepare their personal tax return. Dependent Care?Statements:If you paid childcare expenses to a qualified provider in 2021, you should receive statements reporting those expenses. Charitable Contribution Verification Receipts:If you made any charitable donations this year and are able to itemize your deductions, you’ll need receipts from the organization that received your donations. Still feeling overwhelmed and not sure what to do with these documents? Make it easy on yourself and save them for your tax preparer. You don’t have to face tax season alone – Padgett is here to be your full-service tax and accounting partner. Find an office near you today! The post Checklist: What Tax Documents Do I Need To Keep? appeared first on Padgett. 01/28/2022
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