01/28/2022
Filing your tax return promises to be just as complicated as always - especially if you received stimulus payments or advance child tax credit payments. However, there are steps that taxpayers can take right now to make sure their tax filing experience goes smoothly in 2022. Let's take a look at four things taxpayers can do now to get ready for tax season:
Gather and Organize Tax Records
Organized tax records make preparing a complete and accurate tax return easier. They help avoid errors that lead to processing delays that slow refunds. Having all needed documents on hand before taxpayers prepare their return helps them file it completely and accurately. Important tax records you need to file a return include:
Forms W-2 from employers
Forms 1099 from banks, issuing agencies, and other payers, including unemployment compensation, dividends, distributions from a pension, annuity, or retirement plan
Form 1099-K, 1099-MISC, W-2, or other income statements for workers in the gig economy
Form 1099-INT for interest received
Other income documents and records of virtual currency transactions
Taxpayers should also gather any documents from these types of earnings. People should keep copies of tax returns and all supporting documents for at least three years.
These types of Income documents help taxpayers determine if they're eligible for deductions or credits. For example, people who need to reconcile their advance payments of the child tax credit and premium tax credit will need their related 2021 information. Those who did not receive their full third Economic Impact Payments will need their third payment amounts to figure and claim the 2021 recovery rebate credit.
Taxpayers should also keep end of year documents such as:
Letter 6419, 2021 Total Advance Child Tax Credit Payments, to reconcile advance child tax credit payments
Letter 6475, Your 2021 Economic Impact Payment, to determine eligibility to claim the recovery rebate credit
Form 1095-A, Health Insurance Marketplace Statement, to reconcile advance premium tax credits for Marketplace coverage
