When it comes to filing your taxes, one of the most crucial aspects is gathering all the necessary information. Without all the right information, you risk making mistakes, increasing the likelihood of being audited, and potentially overpaying on your taxes. Whether you’re self-employed or work for a company, it’s essential to have these five types of information before filing your taxes.
1. Personal Information
The first type of information you need to gather to file your taxes correctly is personal information. This includes your name, social security number, address, date of birth, and any other personal information that will help identify you to the IRS. It’s essential to double-check all the information to ensure it’s accurate and up-to-date.
2. Income Information
The second crucial type of information required to file your taxes is income information. This includes your W-2 form (if you’re employed), 1099 form (if you’re self-employed), and any other income you received throughout the year. Make sure you have documentation for each source of income, including any tips, bonuses, or other forms of compensation.
3. Deductions and Credits
Tax deductions and credits can help lower the amount of taxes you owe. Therefore, the third type of information you need to gather is any deductions and credits you’re eligible for. This includes charitable donations, education expenses, and business expenses.
4. Health Care Information
The fourth type of information is health care information. If you purchased health insurance through the Marketplace, you’ll need to have your 1095-A form. If you received your health insurance from your employer, you’ll need your 1095-B form.
5. Investment Information
Finally, if you have investments, the fifth type of information you need to gather is investment information. This includes any stocks, bonds, mutual funds, or other investments you have that generated interest or dividends throughout the year.
In conclusion, gathering these five types of information will help you file your taxes correctly, avoid mistakes, and potentially save money. Make sure to keep all the necessary documentation and double-check everything to ensure it’s accurate. Remember, if you’re unsure how to handle any aspect of your taxes, seek professional advice.
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