North Georgia Tax Solutions practices what we preach- you can never be too prepared! No matter what it comes to; your business, your personal life, and everything in between, having your affairs in order and creating a plan certainly helps ease the stresses of life. Taxes, of course, are no exception this rule.
So, how exactly can you prepare for tax season? The good thing is, we always know when it’s coming! The line, “Nothing is certain life except death and taxes” is famous for a reason. Before you file your taxes, the first step is to gather up all the documents you’ll need to get information from. Filing taxes requires a lot of information that most of us don’t, and can’t, remember off the top of our heads. To help avoid that “Oh no! What do I need?” feeling when filing taxes, we’ve put together a comprehensive list to help make the process simple as possible.
Remember that depending on your situation in life, you’ll need to collect different documents. For example, a student who stills lives with their parents and works a part time job will not need to collect the same items as a business owner.
Personal Tax Documents
In general, you will most likely need these items when filing taxes, whether you’re working with a professional or on your own. Of course, every situation is a little different, but be sure to have these documents handy when it’s time to sit down and file your personal taxes.
You will need to gather and know all personal identification information like your Social Security or Tax ID number, your spouse’s identifying info, routing numbers, and any details related to stimulus payments. If you have dependents, you’ll need each of their SSNs or Tax ID numbers, personal information, income information, and any custodial documents.
You will also need to collect all W-2s, unemployment forms, and 1099s from the tax year. If you have outside income from rentals, retirement, savings, investments, or dividends, you will also want to have those numbers handy as well. Lastly, be sure to have documentation for any deductions you plan to claim. This can include but isn’t limited to home ownership, charitable donations, medical expenses, educational expenses, and more.
Business Tax Documents
If you are filing taxes for a business, big or small, you should have your business’ taxpayer identification number at the ready. If you have employees or have structured your business as a corporation or partnership, you will need an EIN. If you don’t have one already, you can apply for one through the IRS website.
What is a taxpayer identification number? It’s one name for many numbers: Social Security Number (SSN), Employer Identification Number (EIN), Individual Taxpayer Identification Number (ITIN).
All financial records pertaining to your business should be collected before you file your taxes. Income statements that show your business’ revenue and expenses, and up to date balance sheets are the most important documents for filing. We also recommend having your past years tax information accessible, and any supporting documents for your income statements and balance sheets in the case of an audit.
Be on the lookout for the next North Georgia Tax Solutions blog where we go into detail about what forms you will need depending on the structure of your business! If you have a business that needs financial, tax, or other accounting services, be sure to contact North Georgia Tax Solutions.