2011 may already be in your rear-view mirror, but, before saying a final buh-bye to last year, let’s look back and get straight with the IRS. Tax time doesn’t have to be a painful process. As a matter of fact, it’s easier than ever, especially with so much available online. However, there is still one part of the process that’s paperbound—the beginning.
Here are some of the five most important documents to have on hand to start filing your taxes this year:
1. 1040 Tax Return Form
Your 1040 tax return form is where the filing happens. This form describes information about you, the taxpayer, your dependents, and all items as it comes to income. On this form you--or your tax-preparing software--calculate your tax deductions as well as your tax credits and show what funds have already been withheld from your earnings. This is also where you’ll eventually complete how much tax is due (or refund!) given your adjusted gross income (your “AGI”).
2. W-2 Form
For full-time employees, the W-2 is what you need to pull out of your mail pile and have on hand. This form lists your total earnings from each employer as well as what was deducted already from your paycheck, such as taxes withheld and healthcare premiums, for the year. If you’re a part-time worker or freelancer you’ll get a W-9 with similar information.
3. 1099 Forms
1099 forms are also tied to income but very different kinds. You’ll get a 1099 for interest earnings (such as from a savings account), as well as for investment earnings, any capital gains you made from buying, holding then selling stocks or other investments. Or, if you’re incorporated as a small business owner or independent contractor, this is how your payments get reported to the IRS as well. Have all of these on hand when you’re ready to file.
4. Mortgage Statement
Now that income statements are out of the way, don’t forget those mortgage statements. Mortgage statements show how much principal you paid toward your mortgage and just as importantly, how much you paid in mortgage interest. That interest is one of the biggest tax deductions that homeowners have.
5. 2010 Tax Returns.
Lastly, you’ll have to go back in time one more time and pull out your 2010 tax returns and copies of any additional payments you may have made. You’ll need all this to refer to when filling out your 2011 tax return.
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Tax Documents You Shouldn't Be Missing
By Carmen Wong Ulrich | Yahoo! Finance – Mon, Jan 23, 2012 9:36 PM EST@YahooFinance on Twitter, become a fan on Facebook
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