Your 2021 Tax Filing Season To-Do List

The tax season is officially here. If you haven’t already, now is the time to get prepared. Whether you meet with a tax professional or prepare your taxes yourself, proper planning helps the process go smoother and may reduce the risk of costly errors. Check out the tips below and prepare to tackle this tax season with confidence.

To-Do #1: Gather All of Your Forms

Beginning in January, you likely started to receive the forms you need to properly complete your tax return. If you are expecting a large return, you will want to make a list so you don’t forget anything that could affect it. Once you have received your documents, first give them a scan to make sure they are correct and contact the sender if there are any discrepancies. Remember, even a simple misspelling can cause a flag with your tax return. Inspect them carefully.

Some of the forms you will need to watch out for include:

  • W-2s from your job
  • SSA-1099 for Social Security benefits
  • 1099s for additional income, interest, gains and losses
  • 1095-A for government marketplace health coverage
  • 1098s for reporting interest and tuition payments
  • W-2Gs for any gambling winnings
  • Schedule K-1s for company ownership

To-Do #2: Round-Up Your Receipts

If you have your own business or plan on itemizing your deductions, you will need to record expenses so that you can take advantage of any available write-offs. Gather all the receipts for business expenses, medical expenses and other expenses that can be listed on your Schedule A or Schedule C. Receipts can be physical receipts or bank and credit card statements that show payments for these items. Once gathered, organize them by type, so they are easy to find when you begin filing.Β 

To-Do #3: Acquire Records of All Charitable Contributions

Throughout the year, you may have made donations to a tax-exempt organization. These donations can provide you with a charitable contribution write-off. Traditionally, this could only be done if you choose to itemize your deduction. However, as of the CARES Act, filers who choose a standard deduction may be able eligible to write-off up to $300 in charitable contributions.1Β 

Other donation types will still require an itemized deduction and documentation. And most organizations, from churches to fundraisers, can provide a record of your tax-deductible contributions.

To-Do #4: Create a List of All Personal Information

While you likely know your Social Security Number by heart, you will want to jot down the Social Security Numbers of any dependents you wish to claim, this way it is easy to access and you can be sure it’s accurate. Also, make a list of addresses for any property you own as well as dates when the property was bought or sold.

To-Do #5: Get a Copy of Last Year’s Tax Return

If you are using the same preparer as the previous year, they should have a copy of your tax return. If not, find your old copy and have it ready with your other tax items. Being able to reference your previous return can help you see what you filed last year, so you don’t overlook something this year.Β 

To-Do #6: Determine How You Will Spend Your RefundΒ 

If you plan to get a refund this year, you might want to take some time to consider what you plan to do with your return once you receive it. You have the option to apply your payment towards your next year’s tax bill if you believe you will owe. This can be a good idea for those who pay estimated taxes throughout the year as it can often put a chunk towards your first installment.

Alternatively, you can choose to send the money directly to a checking or savings account, or contribute it to an IRA, health savings account or education account. If you plan to split the funds between accounts, you will need to complete a Form 8888.

Don’t let tax preparation leave you feeling overwhelmed. Enjoy less stress and a smoother process by preparing everything you need for filing this tax season.

1.https://www.irs.gov/newsroom/how-the-cares-act-changes-deducting-charitable-contributions

Past performance is not indicative of future results. For informational purposes only. Not intended as legal or investment advice or a recommendation of any particular security or strategy. Information prepared from third-party sources is believed to be reliable though its accuracy is not guaranteed. Opinions expressed in this commentary reflect subjective judgments of the author based on conditions at the time of writing and are subject to change without notice. For more information about Wealthquest, including our Form ADV Part 2A Brochure, please visit https://adviserinfo.sec.gov or contact us at 513-530-9700.

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