Tis the season for taxes, gathering tax information, preparing tax forms and tax returns, calculating taxes as well as paying taxes.  Let's talk about the first item, gathering tax information.  What information do you need to prepare and file a complete and accurate tax return?  Aside from your normal tax documents, you will need to consider life changes that occurred during the year as well as any other unusual events or transactions that could be considered taxable events. 

As you may have heard through mainstream news reports, the IRS is behind with processing returns, responding to taxpayers and professionals, etc. Consequently, the IRS and the professionals at DB&B recommend filing early.  In order to file early, you need to start gathering your tax information.

First things first, start gathering all your normal tax documents, such as forms W-2, 1099-INT, 1099-DIV, 1098 for mortgage interest paid, real estate taxes paid, etc.  Most tax forms are required to be sent to recipients no later than January 31st.  Therefore, by the first week of February, you should have received your documents by mail.  If you have investments with a broker or sold stock, you will be issued a consolidated 1099 or a 1099-B.  Brokers have until February 15th to send these forms to recipients In some cases, you may be required to download and print your own tax documents.  If this is the case, you should be notified ahead of time.

Below is a list of questions and items to consider when gathering your tax information.

• Did you start a new job during 2021?  If so, you will have at least two W-2's, one from your previous employer and one from your new employer. Make sure to provide both. 
• Did you open a new savings account during the year or invest some money? You may have a new reporting requirement.
• Did you get married during the year?  Odds are it makes sense to file married filing joint.  In this case, make sure to provide your spouse's personal information as well as his/her tax information.
• Did you have a child?  We will need complete name, date of birth and social security number. 
• Did you and your spouse receive the monthly advanced child tax credit during 2021?  Luckily, for many of us, the IRS is sending out Letter 6419, which will provide the total amount of advanced child tax credit you received in 2021. In conjunction with the start of tax season on Monday, the IRS has relaunched a revamped website for the Child Tax Credit with up-to-date information on the amounts to put on their tax returns.
• Did you pay any federal or state estimated taxes for 2021?  Make sure to summarize the amounts paid and the dates the estimates were paid.
• Do you remember if you received the third economic impact payment, or 3rd stimulus?  You would have received the payment March 2021.  Fortunately, the IRS is sending out Letter 6475 to confirm the amount that you have already received.
• Did you start a new business or a side hustle during the year?  Chances are you are a sole proprietor and need to report your additional income, as well as related business expenses.
• Are you eligible for any tax credits?  
  • Did your son or daughter start college in 2021?  You may be eligible for education credits. 
  • Did you pay any child care costs such as day care or pre-school so you and your spouse could work or go to school?  You may be eligible for Child and Dependent care credit.
• Did you make charitable contributions?  Even if you do not typically itemize your deductions you should still provide us receipts or a summary of qualified charitable donations as you may be eligible for an above the line deduction.  You may also be eligible to itemize for state purposes.
• Did you retire during the year and start taking distributions from your retirement account, such as an IRA or pension?  If so, then you should be receiving a 1099-R to report the distributions. 
• Did you turn 72 during 2021?  If yes, then you should have received a RMD (Required Minimum Distribution) from your IRA account and should be receiving a 1099-R.

The above list is not inclusive, but can help you gather your tax information so your tax preparer can get your return filed early and efficiently. As always, please reach out to your DB&B tax advisor for questions and further assistance.

The information reflected in this article was current at the time of publication. This information will not be modified or updated for any subsequent tax law changes, if any.