Everything you should be doing to prepare for tax season

It’s never too early to start preparing for tax
season.
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• The next tax day is Monday,
  April 15, 2019.
• To prepare for tax season
  you’ll want to gather some previously filed documents and
  obtain other documents you may need to file for tax
  returns.
• Start tracking your income and
  deductions as soon as possible.

The next tax day is April 15,
2019 and even though tax day is still a few months away, it’s
never too early to start getting everything you need to file in
order. By the time it’s time to file your taxes, you’ll be ready
to sit down with your tax preparer or input your data into an
online program.

The process can seem a bit
daunting so INSIDER consulted certified public accountant Krystal
Standberry from

LYFE Accounting

in Atlanta, Georgia to create the ultimate
checklist for preparing for tax season.

Here’s how you can prepare for
tax season. 

Gather personal information and last year’s
information

Make sure you have your social
security or tax ID card. You will also want to bring your
unexpired driver’s license, identification card, and passport to
your appointment. This should also include your spouse’s info, if
applicable.

You’ll also want to gather
copies of last year’s return for
you and your spouse, if applicable.

Start gathering the paperwork for your
dependents

It
can be useful if you begin organizing important paper
work.
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If you’re going to include
dependents (children or elderly) on your tax return, these are
the documents you will need to provide:

• Their social security and tax
  ID numbers
• Their dates of birth
• Childcare payment records (this
  includes the care provider’s tax ID number)
• Adoption papers (if
  applicable)
• Form 8332 to show that a
  custodial parent is releasing their right to claim the child to
  you, the noncustodial parent (if applicable)
• Any alimony payments that have
  an ex-spouse’s social security number
• Any death certificates

Start tracking your income

You may have various sources of
income so here’s what you’ll need:

• Form W-2 for wages/salary,
  federal and state tax withholding, tips and earned income
  credit (Your employer should send this to you by January 31,
  2019)
• Form 1099-G if you are
  unemployed and receiving unemployment benefits
• Form 1099-Misc for compensation
  from freelance work (You should receive a form from all of your
  clients)
• Form 1099-R for annuity income,
  IRA and pension
• Form 1099-Div for those who
  have earned dividends
• Form 1099-B, 1099-S for income
  from sales of property and stock
• Form W-2G for any income from
  gambling
• Any other income from prizes
  and awards (like lottery winnings), jury duty pay, alimony, or
  rentals

A comprehensive list of

income-related forms

can be found on the IRS website.

Make note of any deductions that should be accounted
for

Some teachers can deduct
classroom expenses.
John Moore/Getty
Images

A
tax deduction is basically a reduction in
income which is subject to state and federal income taxes. In
decreasing your total taxable income, this can reduce the amount
of income tax you would have otherwise owed.

If you’re going to

itemize your
deductions

, you will
need to provide records for each. Here are several potential
deductions to look out for.

• Records of all expenses if
  self-employed, including credit card statements and
  receipts
• Records of expenses for rental
  homes
• Records of expenses related to
  investments
• Real estate and property tax
  records
• Charitable donations, including
  non-cash and mileage driven for charitable purposes
• Records of medical expenses,
  including payments made to doctors, dentists, clinics, or
  hospitals
• Insurance payments
• Childcare expenses, including
  daycare and babysitters
• Any scholarships or fellowships
  received
• Qualifying educational
  expenses
• Interest on student
  loans
• Job-related vehicle
  expenses
• Classroom expenses for K-12
  educators
• Relocation expenses not covered
  by employer
• State and local taxes paid
  excluding withholding
• An invoice showing any sales
  tax paid on a vehicle
• Any contributions made towards
  retirement
• Expenses related to natural
  disaster losses, rebuilding, and repairs

Figure out if you’re going to file a federal or state
return

Your
filing status can impact which type of returns you need to
file.
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You need to figure out whether
you need to file a federal and state return. This is dependent on
your age, your income earned minus any deductions (adjusted gross
income), and your


filing status

.

Read More:
The
best tax software you can buy: TurboTax, H&R Block, and
TaxAct

Have your financial information ready

If applicable, have your bank
account number and routing number handy for a direct deposit of
your refund into your account. This information can be found in
your checkbook. 

Take advantage of helpful resources

• The Internal Revenue Service
  (IRS) has a great tool called the Interactive Tax
  Assistant that can answer some of your questions
  before filing. 
• The IRS has teamed up with
  private tax preparation companies like the
  
  Free File Alliance
  
  to offer
  
  Free
  File 
  
  — a free
  and low-cost electronic filing service to those who earned less
  than $66,000 in 2018. Your information is protected from
  unauthorized use and will not be disclosed or used for any
  other purpose but tax preparation without your consent.
• The
  
  Volunteer Income Tax Assistance
  (VITA)
  
  program
  offers free tax assistance to individuals who earn less than
  $54,000 annually, speak limited English, or have disabilities.
  The volunteers are IRS-certified to aid with basic income tax
  preparation and electronic filing for those who qualify.