TAX FILING TIPS FROM IRS-GATHER ALL YEAR-END INCOME DOCUMENTS

The 2021 year has ended and now the taxpayers are ready to file their taxes. The majority of taxpayers feel that filing taxes is very complicated work. This is the reason that they take help from tax lawyers in filing their taxes and spend a lot of money in this tax filing process. IRS has made it very easy for the taxpayers, the tax filing tips from IRS are a complete guideline that can guide a taxpayer step by step in tax filing. A taxpayer can file the tax without the help of the tax lawyer or any other professional services provider.

IRS has given a tip to taxpayers that ‘Must gather all year-end income documents’ the record of all year income documents will help the taxpayer in easily filing taxes and avoid any delay and refund. If a taxpayer has all year-end income documents then it is very easy to file the tax according to the available record. It will also help the taxpayer from any confusion, misguidance, or misrepresentation.

The IRS has recommended the following documents that a taxpayer must have while filing the tax. These documents will help the taxpayer in the fast and easy process of a tax filing;

1. Social Security Number. The taxpayers must have their social security number, in most cases, the taxpayers memorize their SSN but it is good and safe that they should have a record of SSN so they can avoid any delay. The one or two wrong digits of SSN can cause a lot of trouble for the taxpayer so a taxpayer should understand the sensitivity of the filing process and must come with a record of a social security number.

2. Back account and routing number. This is necessary to get the direct deposit refunds. Direct deposit is very helpful for a taxpayer as the refund is directly deposited in the bank account and it saves a taxpayer from the check’s complication i.e. receiving the check, cashing of a check, and other relevant issues.

3. Forms W-2 from employer

4. Forms 1099 from all payers that include but are not limited to; banks, unemployment compensation, retirement plan, dividends, distribution from a pension, annuity.

5. Form 1099-K, 1099-MISC, W-2, or other income statements for workers in the gig economy

6. Form 1099-INT necessary for interest received

7. In the case of virtual currency transactions other income documents and proofs

8. Form 1095-A, Health Insurance Marketplace Statement. Taxpayers will need this form to reconcile advance payments or claim the premium tax credit.

9. Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments.

10. Letter 6475, taxpayer’s 2021 Economic Impact Payment, to determine eligibility to claim the Recovery Rebate Credit.

The above-mentioned documents are mandatory for a taxpayer in filing the tax so if you are a taxpayer and ready to file the tax then must gather the aforementioned documents before filing the tax. These documents will help in the easy and fast tax filing process and avoid any delay.

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Tax Bytes

A blog created by CPE Warehouse to provide all tax professionals with relevant updates and information. Subscribe to stay up to date and learn more!