Getting ready to file your tax return? One way to make sure this process goes as smoothly as possible is to make sure you have all the documents necessary to prepare your return. Getting your paperwork organized helps you avoid delays when filing your return, and also ensures your return is complete and accurate when prepared. Below is a list of the top three documents that will hold up the preparation and filing of your tax return or if filed without these documents, would cause you to have to file an amended return:
Document 1: W-2’s
Missing W-2’s is one of the most common mistakes made on tax returns. It’s usually not caught right away by the IRS, but when it has been found that you have not included income on your return, it can result in additional taxes owed, plus penalties and interest. It is always best to make sure you gather all your documents in one place as you’re receiving your tax documents via mail. Additionally, you should keep all your last check stubs from any jobs you’ve had throughout the year to ensure you receive a W-2’s and can identify ones you may be missing.
Document 2: Schedule K-1’s
If you are a partner in a partnership or a shareholder in a S-Corporation, you will receive a Form Schedule K-1 that will report your share of income. This income must be included on your personal return and will have an impact on your overall tax liability depending on the nature of the income and the amount. You should be sure to perform an inventory of all your business endeavors and investments to determine if you should be receiving a Schedule K-1.
Document 3: Form 1099-MISC’s and 1099-NEC’s
If you worked as a contractor and was paid $600 or more, received rental income or certain other types of payments, you should expect to receive a Form 1099-NEC or a Form 1099-MISC from the company who engaged you. If you performed contract work as a corporation, you may or may not receive this form depending upon the type of services you rendered. Click here for more information.
Whether you receive this form or not, the IRS still requires the filing of a tax return if you had $400 or more in net earnings as a self-employed business.
In closing, avoid delays in filing your return by making sure you have all the documents listed above when you go to have your return prepared. In addition to the most common documents listed above, there is other important information, that if left off your return, could cause your return to be prepared inaccurately. To help you get organized, click below to download our complimentary tax organizer booklet: