Tax Season Readiness: Preparing your taxes

Whether you are filing independently or working with a professional, organization is the essential first step to a successful tax season. Compiling your documentation early can help ensure an accurate return, potentially allow you to claim all eligible credits, and prevent errors that could delay your refund.

Essential Personal Information

Before looking at income statements, ensure you have the following personal records ready:

• Identification: Social Security numbers or Individual Tax ID Numbers (ITIN) for yourself and any dependents.

• Financial Details: Bank account and routing numbers for direct deposit refunds or electronic payments.

• Validation Data: Your Adjusted Gross Income (AGI) and exact refund amount from the previous year’s return.

• Security Codes: Your self-select PIN (if you e-filed last year) or an IRS-issued IP PIN if applicable.

• Status Updates: Confirm your name matches Social Security Administration (SSA) records and ensure the IRS has your current address.

Understanding Income Reporting Forms

Most income-related forms should arrive electronically or via mail by late January or February. Employers are specifically required to send W-2 and 1099-NEC forms by January 31.

Form Type	Purpose
W-2 / W-2G	Reports wages from employers or lottery and gambling winnings.
1099-INT / 1099-DIV	Reports interest earned and dividends or distributions from investments.
1099-NEC / 1099-MISC	Reports freelance/gig work and miscellaneous income like sweepstakes.
1099-R / SSA-1099	Details retirement plan distributions or Social Security benefits.
1099-K	Reports payments received via third-party apps (e.g., PayPal, Venmo) or online marketplaces.
Schedule K-1	Reports a partner’s share of income, deductions, and credits.

Health Care Documentation

Health insurance forms vary depending on your provider. Pay close attention to which ones are required for your filing:

• Form 1095-A: Issued by the Health Insurance Marketplace. You must wait for this form to file, as it is required to complete Form 8962.

• Form 1095-B & 1095-C: Issued by insurance providers or large employers to verify minimum essential coverage. These should be kept for your personal records and do not need to be attached to your federal return.

Maximize Your Deductions and Credits

Gathering receipts and records for the following expenses can significantly impact your final tax liability:

• Education & Family: Receipts for tuition (1098-T), student loan interest (1098-E), and childcare or dependent care expenses.

• Home & Charity: Records for mortgage interest (1098), property taxes, and charitable donations if you plan to itemize.

• Savings: Records of contributions to an IRA, Health Savings Account (HSA), or Flexible Spending Account (FSA).

• Business & Side Jobs: Maintain logs for mileage, travel, gift, and car expenses, as well as records for deductible office expenses and estimated tax payments.

Note on Form 5498: This form reports IRA or HSA contributions and is often mailed after the tax filing deadline. Keep it for your records, but it is not required to be attached to your return.

Disclaimer

Investment advice offered through Stratos Wealth Advisors, LLC, a registered investment advisor. Stratos Wealth Advisors and Synergy Wealth Management are separate entities. 

Neither Stratos nor Synergy Wealth Management provides legal or tax advice. Please consult legal or tax professionals for specific information regarding your individual situation.