Gather and organize tax records – All the regular types of tax records plus three special forms and letters for Child Tax Credit Payment, Economic Impact Payments and Marketplace Insurance.
Organized tax records make preparing a complete and accurate tax return easier. It helps avoid errors that lead to processing and refund delays. Individuals should have all their tax information available before filing to ensure the return is complete and accurate. They should notify the IRS if their address changes and notify the Social Security Administration of a legal name change.
Remember, most income is taxable. Record-keeping for individuals includes:
- Forms W-2 from employer(s)
- 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 statement for workers in the gig economy
- Form 1099-INT for interest received
- Other income documents and records of virtual currency transactions
Income documents can help individuals determine if they’re eligible for deductions or credits. Additionally, 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 received third Economic Impact Payments and think they qualify for an additional amount will need their stimulus payment and plus-up amounts to figure and claim the 2021 Recovery Rebate Credit.
Taxpayers should also keep end of year documents including:
- 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