Tax Documents

The mailbox is full at this time of year, with documents all pertaining to the tax filing season.  Outside of the W-2, you’re not sure what you need to save for tax preparation.  

You’ve reviewed your Wage and Tax Statement (W-2).   You’ve checked your final paycheck stub from 2019 to make sure it matches the total indicated on W-2, and that is as far as you've gotten.  With all the statements you've been receiving since January, it's time to start accumulating those year-end statements in that malia folder titled, TAX 2019.

Tracking records for income, interest, and taxes withheld is the more accessible part of filing season as they tend to come to you in paper form.  It can be the paperless records that we often fall short with.  If you find yourself at year-end trying to look back and account for items such as charitable donations and other deductibles, creating a simple excel spreadsheet that you use to record these tax-saving opportunities throughout the year is a must.  Taking a little extra time to log expense, check number, payee name, dollar amount, and dates will save you time in the long run.

A few other forms you need to file and save is the 1098.  The 1098 form addresses the interest you paid on your mortgage during the year.  Interest is tax-deductible, and if you're itemizing your deductibles, you'll need this form. 1098-E and 1098-T are forms related to education.  The 1098-T is a tuition credit and the Lifetime Learning Credit offers up to $2,000 for qualified education expenses paid.  The 1098-E is the Student Loan Interest Statement, and if you've paid interest on a student loan, you may be able to deduct it on your federal income tax return.

Whatever you're receiving in year-end documents, it's best to keep everything if you're unsure.  It's much better to have kept unnecessary documents then attempt to try and recover them at tax time!