I am very pleased to have another post from my friend, Amy. Amy is a long time contributor to Adventures of Frugal Mom and amazing person. Today she is sharing with some tips on what you will need to file those taxes.
It’s that time of year again! Tax season has begun, and it’s time to gather up all your information and decide who is going to prepare your return.
Many people aren’t aware of what you need to bring with you to have your taxes prepared or what you need to prepare them yourself. There are websites online such as www.myfreetaxes.com where, depending on your income, you can file your taxes yourself for free. Whether you use a paid preparer, volunteer tax service or prepare them yourself, here are some important documents you will need.
First you will need a Photo ID for you and your spouse if you are filing a joint return. You will also need social security cards for yourself and all of your dependents. Depending on what type of employment you have, you should receive either a W2 or 1099 showing your wages for the year. For some people, this is it. That is everything that you need. Other income documents you might have are social security income, retirement income or unemployment compensation.
Here are some other documents you may need depending on your situation. If you do not have employer-sponsored health insurance for you and your family, you may have had to purchase insurance through the Marketplace according to the Affordable Care Act. If you bought coverage or received an exemption, you should have a paper from the Marketplace, which is a form 1095. It is important that everyone understands that there is a penalty for not having health insurance if you don’t qualify for an exemption through the Marketplace, so you need to have that paper to show you’ve applied for healthcare according to the law.
Other documents you might need for adjustments to your income include any childcare you paid throughout the year or tuition payments/ student loan interest for school.
There are other items some people keep track of throughout the year to itemize deductions on their tax returns. These are items such as mortgage interest, property taxes on real estate and vehicles, charitable donations, tithes and medical expenses. These items help bring down your taxable income if they add up to more than the standard deduction amount. If not, you can choose the standard deduction instead.
While this shows, there are many documents you could use on your tax return, the main thing to remember is you want to show all of your income (that includes cash income) and what sort of health insurance coverage you had last year.
Happy tax season!
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