Getting Your Tax Documents Together Without the Last-Minute Scramble

Tax season is often stressful, but most of that stress comes from one factor. Scrambling. Searching. Wondering whether a form exists and hoping it does not.

A smoother filing experience usually starts well before you sit down with your tax software or your preparer. Gathering documents in advance helps ensure your return is complete, accurate, and not delayed by a missing form that arrives after you thought you were finished.

Rather than thinking about this as a checklist you must conquer in one sitting, it can help to think in terms of categories. Income. Deductions. Credits. Other items that apply only if specific events occurred during the year.

Here is how to approach it.

Income Documents Come First

Start by collecting documents that show income received during the year.

If you earned wages as an employee, you will receive Forms W-2 from each employer. Be sure to include all copies, especially if wages were reported across multiple states or localities.

If you earned income as a self-employed individual, you may receive Forms 1099-NEC, 1099-MISC, or 1099-K. Along with those forms, you will want documentation of all income and expenses related to that work.

Those with taxable investment or interest-bearing accounts should gather Forms 1099-B, 1099-DIV, 1099-INT, or consolidated and corrected 1099 statements. It is crucial to verify that cost basis and holding period information for investment sales is reported correctly.

If you received or recognized equity compensation, including stock options or made Section 83(b) elections, Forms 3921 or 3922 may apply. These situations often require additional adjustments, so the documentation matters.

Retirement and insurance-related income also generate forms. Withdrawals from retirement plans or insurance policies are typically reported on Form 1099-R. This includes rollovers and Roth conversions. Retirement income from pensions, annuities, Social Security, or the Railroad Retirement Board is reported on Forms such as SSA-1099 or RRB-1099.

If you sold a home or other real estate, you will want Forms 1099-S if applicable, along with records showing your cost basis, including purchase documents, sale statements, and records of improvements or depreciation.

Alimony received under divorce agreements finalized before January 1, 2019, should also be documented.

Finally, if you received other sources of income reported on IRS Schedule 1 Part 1, gather any related forms or records.

Documentation for Deductions

Once income is covered, turn to deductions.

Self-employed individuals should gather documentation for deductible business expenses. This includes costs related to home office use, vehicle use, health insurance premiums, and long-term care premiums. These records also support potential eligibility for the Qualified Business Income deduction.

If you contributed to retirement plans or other tax-advantaged accounts such as a 401(k), IRA, Roth IRA, HSA, or 529 plan, documentation of contributions is essential. Be mindful of deadlines for removing excess contributions when applicable.

Charitable donations require careful recordkeeping. This includes cash gifts, non-cash property, and donated stock. For non-cash gifts, valuation details are necessary.

Medical expenses may also matter if they were significant. Records should include amounts paid and any reimbursements from insurance, HSA, or FSA accounts, while adhering to applicable limitations.

State and local taxes paid during the year should be documented, including income, sales, and property taxes.

Mortgage interest paid on a primary residence or a home equity loan is reported on Form 1098 and supported by related records, including points paid and loan balances. Deduction limitations may apply based on how the funds were used.

Student loan interest paid is reported on Form 1098-E.

Alimony paid under qualifying agreements finalized before January 1, 2019, also requires documentation, including the recipient’s Social Security number.

If other deductions apply, such as those reported on IRS Schedule 1 Part 2, gather records to support them.

Credits and Special Situations

Tax credits often depend on specific life circumstances.

If you have children or other dependents, documentation is needed to establish dependency status. This may include records related to age, relationship, support, custody agreements, and Form 8332 when applicable.

Education expenses should be supported by Forms 1098-T, Forms 1099-Q for 529 distributions, and receipts.

Purchases related to electric vehicles or energy-efficient home improvements require supporting documentation such as receipts or manufacturer certifications.

Health insurance obtained through the Marketplace is documented using Form 1095-A.

Estimated tax payments or prior-year overpayments applied to the current year should also be documented, including payment dates and amounts.

If other tax credits apply, such as foreign earned income or AMT carryforwards, supporting documentation is required.

Other Items That May Apply

Some situations only apply to certain taxpayers.

Gifts in excess of the annual gift tax exclusion require awareness of gift tax reporting requirements, including the potential need to file Form 709.

Qualified Charitable Distributions from IRAs should be documented even though the full distribution appears on Form 1099-R.

Non-deductible traditional IRA contributions require careful tracking of basis, including documentation of year-end account values.

Rental property owners should gather records of income, expenses, property and land values, and time spent on rental activities.

Business owners who co-own businesses or own S corporations may need to wait for additional business tax returns before finalizing personal filings.

Solo 401(k) plans with balances above applicable thresholds may require additional filings.

State-specific tax issues should not be overlooked.

Preparation Reduces Pressure

None of this requires perfection. It does require attention.

Collecting documents early allows time to identify missing information and avoid last-minute surprises. It also makes conversations with your tax preparer more efficient and far less stressful.

Tax filing may never be enjoyable, but good preparation turns it into a process instead of a scramble. That alone is a meaningful improvement.

WHWM is here to guide you in identifying your priorities, developing a plan, and making adjustments along the way. By choosing WHWM, you're partnering with our Founder and President, Stephen Bodwell. As a CPA and CFP® professional, Stephen is committed to helping you achieve your financial goals and aspirations. Don't hesitate to take the next step toward realizing your dreams. Schedule your complimentary, no-obligation 30-minute consultation with Stephen. 

Walnut Hill Wealth Management, LLC (“WHWM”) is a registered investment advisor offering advisory services in the State of Texas and in other jurisdictions where exempt. The information provided is as of the date indicated and is subject to change.