What You Need to File Your Taxes

If you were watching football this weekend, you likely noticed TurboTax’s® “personalized service” ads. Their timing was impeccable… if not slightly annoying – who wants to think about taxes while on the edge of your seat during a playoff game?

The allure of big brand tax filing software gets stronger every year. I hear all kinds of reasons why people choose it but the one most often heard: it’s “free” (or close to it). I’ll admit that to be a strong appeal right now. But “free” also means you get what you pay for.

Now, TurboTax® seems to have finally figured out that people don't want just "software" to get through their taxes ... they want actual help. The many shifts in tax code and the up and down changes with deductions and government credits the past couple of years still make it difficult to file taxes correctly – even with fancy software, no matter how INTUITive it is. (see what I did there? INTUIT®)

The ads are very pretty. I will give them that.

But now the choice is: have some random "TurboTax®-approved" person handling your taxes – or a real pro.

And a pro who actually is good enough at their job to sustain a *real* business around the function, instead of being so green or sloppy that the only way they're able to actually get work is to accept a poorly-compensated gig with a software giant who is looking for warm bodies to do their bidding.

Can you tell I have opinions?

And look … I have no issue with young, hustling tax pros finding ways to earn income. I just would rather not have YOU be their guinea pig.

Here are some things to prepare for your tax meeting, with your tax pro.

Janet Behm's
"Real World" Personal Strategy Note
What You Need to File Your Taxes
“Why does a slight tax increase cost you two hundred dollars and a substantial tax cut save you thirty cents?” - Peg Bracken

The tax-filing season has begun (on January 23 to be exact). The IRS has now officially started accepting 2022 tax returns.

Of course, no new tax season is complete without changes from the previous tax season, and this year is no exception.

Usually, that means more liabilities, but let’s start with some good news. All the talk leading up to this season was that 1099-K forms from online sales and gig work would be rolling in – and you would naturally want to wait to receive them before filing. But… the IRS put that requirement off for a year, so you may get none (or you may get some – more on this in a sec).

Still, because the deadline for businesses to release W-2s and 1099s is January 31, you may still want to wait to file. It can run into February when the tax forms you need are in your possession.

Now, for a little sad news… refunds will most likely be smaller this year. Sigh. No more Uncle Sam cash infusions like Economic Impact Payments, and unless you itemize deductions (most folks don’t), you won’t be able to deduct charitable contributions.

Don’t shoot the messenger. We’ll try to get you every dollar you’ve got coming. Keep reading.

On the “upside,” the IRS promises they’ll do better this year processing tax returns and kicking out refunds quicker. We’ll see...

Meanwhile, let’s focus on what lies before us. As you start getting together documents to file your federal taxes for 2022, scan over our helpful list of tax info your tax pro will need to get things squared away for you.

Personal information

• Social Security numbers (including your spouse, children, and other dependents)
• Residential address(es) for 2022
• Dates of birth
• Type of dependent relationship
• Last year’s or most recent federal and state tax returns (if we don’t have them on file)

Employment & Income (a whole lot of 1099s)

• W-2 forms for 2022
• “Payment Card and Third-Party Network Transactions” (1099-K – and you may get one of these no matter how little income you made. Report the income.)
• Tax refunds and unemployment compensation (Form 1099-G, “Certain Government Payments”)
• Miscellaneous income including rent, prizes, and awards (Form 1099-MISC & 1099-NEC)
• Partnership, trust, and S-Corp income (K-1 – notorious for arriving late, but only because they don’t have to be out the door until February 15)
• Social Security Benefit Statement (SSA-1099/1042S)
• Distributions from profit-sharing or retirement plans; IRAs; annuities, pensions, insurance contracts, survivor income benefit plans; permanent and total disability payments under life insurance contracts; and charitable gift annuities, among others (1099-R)
• Gambling winnings (W-2G)
• State and local income tax refunds (1099-G)
• Records for alimony received, jury duty pay, and any other tax credit information for 2022

Financial Assets

• Interest income (Forms 1099-INT & 1099-OID)
• Dividend and distribution income (Form 1099-DIV)
• Money from broker transactions (Form 1099-B)
• Cryptocurrency sales (including coin-to-coin trades) – report of any cryptocurrency activities
• Records for capital gains or losses

Homeowner/Renter Info

• Mortgage interest, real estate taxes (Form 1098)
• Second mortgage interest paid (if you don’t rent that property or rent it only under specific conditions – check with us)
• Sale of your home or other real estate (Form 1099-S)
• Settlement statement for any real estate purchased or sold during the year
• Moving expenses (only if in active military and then under certain conditions)
• Reimbursements for moving
• Personal property tax information
• Rent paid during tax year

Financial Liabilities

• Auto loans and leases if vehicle is used for business
• Student loan interest paid (Form 1098-E)
• Early withdrawal penalties on retirement funds, certificates of deposit CDs (1099-INT), and other fixed-time deposits
• Records of gambling losses (if you plan to itemize deductions – any questions about that, check with us)

Expenses records

• Gifts to charity (again, if you itemize deductions)
• Health insurance information (the Form 1095 series – don’t need it for your federal return anymore but good to have among your records)
• Education expenses (tuition and fees)
• Childcare expenses
• Job-hunting expenses
• Medical savings accounts’ information (1099-SA)
• Adoption expenses’ records
• Unreimbursed expenses related to work (few folks can take this deduction)

Self-Employment (SE)

• Records for estimated SE tax paid (probably quarterly) in 2022
• SE retirement plan information (SIMPLE and SEP-IRAs, for instance)
• Health insurance premiums records
• Receipts or documentation for business-related expenses, including rent/mortgage, utilities, equipment and auto loans, and leases if you use the vehicle for business
• Farm income records

Deductions records

• Retirement plan(s) contributions
• Medical expenses (you can deduct only the amount of your medical and dental expenses exceeding 7.5% of your entire adjusted gross income)
• Tuition and higher-ed. (you may be eligible for one of a few education credits)

If you have the above, take ’em in. If you don’t, let your tax pro know. And this is a sample list – what forms you need could change depending on your circumstances.

Through this blog, we want you to be aware of tax advantages you may have, so you are paying the least in taxes and keeping the maximum in play for investments and fun.

BE THE ROAR not the echo®

Janet Behm