Things To Remember When Filing Your Income Taxes

Whether you file your own taxes or enlist the help of a tax professional, it’s important to take an organized approach. Having your documents handy can help ensure you’re in compliance with the IRS and reduce the amount of time you have to spend on this cumbersome annual task. Let this tax preparation checklist be your guide for navigating this year’s tax season.

Thomas Brock, CFA, CPA, expert contributor to Annuity.org
  • Written By
    Thomas J. Brock, CFA®, CPA

    Thomas J. Brock, CFA®, CPA

    Investment Management and Finance Professional

    Thomas Brock, CFA®, CPA, is a financial professional with over 20 years of experience in investments, corporate finance and accounting. He currently oversees the investment operation for a $4 billion super-regional insurance carrier.

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  • Edited By
    Savannah Hanson
    Savannah Hanson, financial editor for Annuity.org

    Savannah Hanson

    Financial Editor

    Savannah Hanson is an accomplished writer, editor and content marketer. She joined Annuity.org as a financial editor in 2021 and uses her passion for educating readers on complex topics to guide visitors toward the path of financial literacy.

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  • Financially Reviewed By
    Peggy James, CPA
    Peggy James CPA

    Peggy James, CPA

    Certified Public Accountant

    Peggy James is a certified public accountant with a Master of Accounting. She has spent the past several years of her career focused on working in higher education finance roles. Peggy also has accounting and finance experience working in the corporate and nonprofit sectors.

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  • Updated: September 20, 2022
  • This page features 5 Cited Research Articles
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APA Brock, T. J. (2022, September 20). Things To Remember When Filing Your Income Taxes. Annuity.org. Retrieved September 24, 2022, from https://www.annuity.org/personal-finance/taxes/things-to-remember-when-filing-your-income-taxes/

MLA Brock, Thomas J. "Things To Remember When Filing Your Income Taxes." Annuity.org, 20 Sep 2022, https://www.annuity.org/personal-finance/taxes/things-to-remember-when-filing-your-income-taxes/.

Chicago Brock, Thomas J. "Things To Remember When Filing Your Income Taxes." Annuity.org. Last modified September 20, 2022. https://www.annuity.org/personal-finance/taxes/things-to-remember-when-filing-your-income-taxes/.

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What Information Do You Need When Filing Taxes?

The information you’ll need when filing your taxes depends on your unique circumstances. Some people only need a few documents and the task can be completed in a matter of minutes. Others have more demanding personal finance situations that require the help of a tax professional.

Generally, you’ll have more tax documents to deal with if one or more of the following situations applies to you:

  • Your sources of income multiply
  • Your lifestyle becomes more complex
  • You accumulate additional assets and liabilities

Regardless of the complexity of your situation, it’s important to think about a holistic game plan. Read on to learn practical tips to better organize yourself when filing your income taxes.

Personal Information

Personal information is the first thing on your tax preparation checklist. Your personal data informs the Internal Revenue Service (IRS) and other taxing authorities that you are filing a tax return. It also instructs them how to contact you and where to deposit any refunds you may be owed. Specifically, you will need the following personal details:

  • Your full legal name, date of birth and social security number or tax identification number (you’ll need this information for your spouse, too, if you have one)
  • Your home address
  • An Identity Protection PIN (IP PIN), if one has been issued to you, your spouse or your dependents by the IRS
  • A valid bank account number and bank routing number to facilitate direct deposit of any refunds due

Additionally, you should have copies of last year’s federal and state tax returns. Last year’s returns aren’t always necessary, but they can serve as useful reference guides when filling out this year’s taxes.

Dependent Information

If you can claim someone as a dependent, such as a child, elderly parent or other qualifying person, you will need the following information:

  • Dependent’s full legal name, date of birth and social security number or tax identification number
  • IRS Form 8332, if your dependent child’s custodial parent is releasing their right to claim the child as a dependent

What Documents Do You Need When Filing?

Once you have your personal details and dependents’ information on hand, it’s time to gather the various supporting documents that must accompany your tax filing. We’ll cover each of the types of supporting documents you may need.

Income Sources

Depending on the nature of your work and the diversity of your income streams, you may have one or multiple IRS documents that report your earnings for the year. The most common types of income documents are outlined below.

  • Form W-2 is issued by employers to their employees by January 31 of each year.
  • 1099 forms report a variety of distributions made by payers to income recipients. There are nearly two dozen types of 1099s, but most taxpayers will only ever receive a handful of them. The most common 1099s include the following:
    • Form 1099-B is issued by brokerage firms and barter exchanges to report clients' gains and losses.
    • Form 1099-DIV is issued by financial institutions to investors who receive dividends and distributions from an investment during a calendar year.
    • Form 1099-G is issued by government entities to individuals who receive unemployment compensation payments, state or local income tax refunds and/or certain other payments.
    • Form 1099-INT is issued by financial institutions to savers and investors. It includes a breakdown of all types of interest income received and related expenses paid during a calendar year.
    • Form 1099-K is issued by payment settlement entities (PSEs) to report payments made to settle transactions executed during a calendar year. PSEs include credit card companies and third-party payment processors, such as PayPal and Square.
    • Form 1099-MISC is issued by payers to report miscellaneous distributions made, such as rents, prizes, awards, healthcare payments and/or payments to an attorney.
    • Form 1099-NEC is issued by payers to report compensation given to independent contractors, freelancers and self-employed individuals for services rendered.
    • Form 1099-R is issued by payers to report distributions made from annuities, pensions, retirement plans, profit-sharing plans, individual retirement accounts, insurance contracts and survivor income benefit plans.
  • Schedule K-1s are issued to document income received from a pass-through business, trust or estate.
  • Records of alimony payments can show income received as a result of divorce and separation agreements.

Records of other sources of income, such as gambling winnings, jury duty pay and cancellations of debt are also fairly common.

Deductions

Claiming deductions is the most common way to reduce your tax obligation. Many people elect to claim the standard deduction, which is a flat amount based on your filing status. Others choose to itemize their deductions with Schedule A (Form 1040).

If you itemize your deductions, you’ll need to provide adequate documentation to substantiate your claims and expenditures. The most common itemized deductions are listed below.

  • Mortgage interest and insurance premium payments
  • State and local property taxes and income or sales taxes
  • Out-of-pocket payments for medical and dental services
  • Premiums paid for long-term care insurance
  • Charitable donations

Several deductions are available to all tax filers, regardless of whether they use the standard deduction or itemized deductions. An outline of the most widely used deductions is below.

  • Retirement contributions to qualified individual retirement accounts (IRAs)
  • Medical contributions to qualified flexible spending accounts (FSAs) and health savings accounts (HSAs)
  • Premiums paid for self-employed health insurance
  • Educational payments such as tuition, fees and loan interest
  • Alimony payments associated with divorce and separation agreements finalized before January 1, 2019
  • Financial losses associated with financial securities disposals and property subjected to casualty, disaster or theft
  • Charitable contribution deduction available to taxpayers taking the standard deduction in 2020 and 2021 as part of COVID-19 legislation
  • For teachers, payments for classroom supplies

Tax Credits

Tax credits offer direct reductions to your tax obligation. In many cases, tax credits are more economically beneficial than tax deductions, which reduce your taxable income. Like deductions, documentation is required for tax credits.

A brief listing of commonly used credits is provided below. Be sure to hold onto any documents received for these and other tax credit provisions.

  • The American Opportunity Tax Credit and Lifetime Learning Credit are education-related credits that can save you a lot of money. Form 1098-T is required to claim the credit.
  • The Child Tax Credit offers a standard credit worth up to $3,600 per child in 2021. However, if you added to your family through adoption, you may be eligible for additional credits. Schedule 8812 is used to determine your credit.
  • The child and dependent care credit can be used to offset the cost of childcare. Form 2441 is used to report your expenses.
  • Tax credits exist for various home improvements and appliance purchases that increase the energy efficiency of your home. If you’ve done any energy-focused improvements to your home, don’t overlook this opportunity.
  • The Retirement Savings Contributions Credit (also known as the Saver's Credit) is available for certain individuals with low income who contribute to an IRS-qualified plan, such as a 401(k) or IRA.

Estimated Tax Payments

For most tax filers, documenting estimated tax payments is not necessary, given the automatic withholdings processed by employers. However, estimated tax payments are common for those who are self-employed and for those who earn significant amounts of money from non-employment sources, such as from investments in real estate or financial securities.

If you have made estimated tax payments throughout the year, be sure to incorporate them into your annual tax filing. In gathering your documentation, include records pertaining to estimated tax payments made during the year and prior year refunds that were applied to the current year.

IRS Notices and Letters

Aside from the documents outlined previously, the IRS and other taxing authorities frequently distribute notices and letters that are pertinent to your tax return. Be sure to hold onto them and have them handy when filling out your return. For 2021, a few especially important documents are outlined below.

  • IRS Notice 1444 and IRS Letter 6475 relating to economic impact payments (EIP) received due to the COVID-19 pandemic.
  • IRS Notice 6419 reporting the total amount of advance child tax credit payments received.
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What Should You Do if You Have Questions?

If you need some help getting started or have specific tax questions, please leverage the resources outlined below.

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Last Modified: September 20, 2022
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5 Cited Research Articles

Annuity.org writers adhere to strict sourcing guidelines and use only credible sources of information, including authoritative financial publications, academic organizations, peer-reviewed journals, highly regarded nonprofit organizations, government reports, court records and interviews with qualified experts. You can read more about our commitment to accuracy, fairness and transparency in our editorial guidelines.

  1. Internal Revenue Service. (2021, August 23). About Schedule A (Form 1040), Itemized Deductions. Retrieved from https://www.irs.gov/forms-pubs/about-schedule-a-form-1040
  2. Internal Revenue Service. (2021, November 4). Frequently Asked Questions and Answers. Retrieved from https://www.irs.gov/faqs
  3. Internal Revenue Service. (2022, March 16). Let Us Help You. Retrieved from https://www.irs.gov/help/telephone-assistance
  4. Internal Revenue Service. (2021, May 25). Resources to Help You Prepare Your Tax Return and Resolve Tax Disputes. Retrieved from https://www.irs.gov/newsroom/resources-to-help-you-prepare-your-tax-return-and-resolve-tax-disputes
  5. Tax Policy Center. (2020, May). Tax Policy Center Briefing Book: Key Elements of the U.S. Tax System. Retrieved from https://www.taxpolicycenter.org/briefing-book/what-standard-deduction