You (hopefully) have a copy of last year’s tax return saved or stashed somewhere. Find that. It’s the best blueprint to guide you through what information you’ll need to gather this year, even if some (or many) details have changed. For instance, last year’s return will remind you about specific deductions you took and income sources you have—like interest from that investment account your mom set up for you, which you only think about at tax time—so you won’t forget anything. If you can’t find your return, you can visit IRS.gov to download a tax transcript (a summarized version of your return) instantly or request a hard copy via mail, which should arrive in five to 10 business days.
Make a mental note of all the major events that occurred in 2021.
You can think back to any significant life events since you last considered taxes. You were hospitalized and incurred a lot of medical bills. These sorts of things can change how much you owe as compared to last year, so you’ll want to be sure to account for each of them on your return—don’t just crib everything off of last year’s forms to get your filing done quickly.
You can go on a form-finding expedition.
It’s time to locate those tax forms. Relocate those that arrived via snail mail, then check your email and junk mail—many companies send paperless tax forms these days. You need to gather all forms showing income you had during the year: a W-2 if you’re a full-time, salaried employee, 1099 forms if you earned freelance, unemployment, or investment income, plus forms for any government stimulus checks you received in 2021. You can use last year’s tax return to help remind you which forms you need this time, for example, 1099s from all of your bank accounts. “If you don’t know what documents you need based on last year’s tax return, here’s a list to get you started,” says financial expert Ashley Feinstein Gerstley, founder of The Fiscal Femme and a partner with pay-over-time solution Affirm. “It’s also helpful to make a list of your accounts—everything from savings to investment accounts. You can log in to each and go to the tax forms section of their websites—most will have some variation—to pull any tax documents.”
Compile your deduction documentation.
Over on the deduction side—the side that saves you money!—you’ll need to pull together items that document expenses you can write off, including receipts for small-business expenses, statements from your childcare provider, property tax statements, receipts for donations and charitable contributions, and statements showing medical expenses, or that you’ve paid for your own healthcare premiums (versus an employer doing so). Quickly glancing through your bank and credit-card statements for the past twelve months will help ensure you don’t miss anything. You might also need a 1098 form for mortgage interest or, if your health insurance is through HealthCare.gov a 1095-A form.
Source: Glamour