What do I Need to File my Taxes

 When the due date for filing tax returns arrives, people panic and hire an accountant to do the tax part, as tax credits, deductions, different forms, and the electronic filing method seem pretty overwhelming. This year, the IRS established 31st July as the final date for submitting tax returns. Whether you use tax prep software, hire an accountant, or do your taxes on your own, it is important to file the tax returns before the last date. 

Those who fail to file or pay their income tax are subject to a fixed penalty, which is often charged with interest. The more you delay your tax, the higher the penalty will be. To make the process easier, we have curated a checklist of the documents needed to file the ITR. Check out this list, gather all the required documents, and file your income tax returns on time.

Personal Information

Your personal information consists of the details that help the IRS identify you. Whether you are filing alone or a joint tax return as a couple, you are going to need the following information. 

• Full name (similar to what's on your social security card)
• Social security number
• Date of birth
• Your previous year's income tax return copy
• Bank details (to get a tax refund if you are eligible)
• Address

You may also need to fill in the information about the dependent (if there's a child or someone you claim as your dependent).

Sources of Income

The standard IRS tax form that each taxpayer is liable to submit is Form 1040. However, if you report income from multiple sources or are a sole proprietor with a side gig or several deductions to show on your tax returns, you need to understand different tax forms. You have to submit Form W-2, which is sent to you by your employer, stating the amount they have withheld from your paycheck for tax. Or, you can fill out and send the Form 1099s if you are self-employed. The IRS has offered a 50% deduction on Social Security and Medicare taxes for self-employed individuals. On the other hand, employees need to pay their taxes in full either by withholding a small percentage of income from their salaries or paying taxes from their earnings. Either way, the IRS needs proof of your sources of income. The following forms are required to show your income sources.

• Form W2 from your employer
• 1099-G (if you have received income from the government, such as unemployment income or tax refunds)
• Other 1099 forms for reporting income from dividends, interest, and sales of stock you own
• 1099-S to report income from the sale of your residential or commercial property
• 1099-MISC for other sources of income, such as a lottery or prize
• Alimony
• Copy of documents showing your income from cryptocurrency
• Income from other sources, such as gambling, debt cancellation, etc.
• Form 1098-T if you are eligible for a tax credit.

Self-employment Records

One of the easiest ways to lower your taxable income is by claiming business expenses. Self-employed individuals can claim the home office deductions too, given that they have kept the receipts for all transactions. Here are the forms required for filing income tax for 2022 if you are a self-employed taxpayer:

• Form 1099-NEC to report income from freelancing, side-gigs, contracts, and other tasks you completed as an independent contractor.
• A proof of your business income and expenses
• Number of miles driven as part of business
• Your home office measurement in square footage and the expenses incurred for running your home business. 

If you are taking a standard deduction, you can deduct up to $1500 directly from your income tax, showing it as a home office expense. However, to reach there, you need at least 300 sq ft of home office space. You can take itemized deductions if you want to list each expense manually to reduce your taxable income.

You also need tax forms for deductions. Make a list of the deductions you can take, and mention them in your tax returns. It's best to take the standard deduction, as it can save you a considerable amount on your taxes without having to calculate them manually. 

Also read : List Of Tax Forms With Their Importance