As tax season approaches, now is the perfect time to get your tax documents in order and make sure you have everything you need. One missing document could create confusion at the last minute, or even cause you to file your taxes past the deadline and pay penalties. We strongly advise our clients to get their tax documents together by December of the current year, so everything will be ready to go well before the filing deadline, usually in April of the next year for most people.
What Documents Do I Need to File My Taxes?
To file your taxes, the three most essential things you’ll need are your social security number, your tax documentation from the recent tax year and your W-2 forms from all employers you worked for this year. If filing jointly, you need all the same documentation for your spouse. Beyond that, you’ll also need the following documents, depending on your exact situation: 1099 forms for any contract work beyond $600, statements of income from any investments like stocks, bonds, dividends and interest, accounting records if you run a business or rent property, social security benefits forms and proof of any other benefits from unemployment, jury duty, gambling, prizes and medical savings accounts.
What if a Document is Missing?
If you lost last year’s return, request a free tax transcript from the IRS through the online portal and receive it in five to 10 days. By mail, it takes 30 to 75 days, depending on the level of detail you requested. If you need info as far back as six years, you may owe a $50 fee to the IRS per return requested. For other types of missing forms, it will depend on the organization involved. For a missing W-2 or 1099, contact your employer. It often takes them several weeks to generate and mail a new copy, so be prepared to wait. For proof of your investment income, contact the company that manages your investments. Prove social security benefits by contacting the Social Security Administration. For gambling and prizes, contact the company that administers the payout. If you run a business or rent property, you will be expected to provide records and may need the help of a tax attorney to sort out missing documents.
Why Does the IRS Need So Many Documents?
Tax-related documentation is used to prove your identity, prevent people from impersonating you and provide details the IRS needs to verify your tax burden. In a world that is increasingly paperless, you might find it frustrating that you’ll still need to deal with so much paperwork at tax time. However, many organizations now provide the information you need electronically, which makes things a little easier. For example, your employer may use an online vendor that can show you a picture of your W-2, even if you haven’t received it by mail. The online W-2 usually provides enough information to fill out your tax forms and proceed with filing. Also, keep in mind that the IRS recommends keeping all tax documents – whether printed or online – for seven years, and to dispose of old documents carefully by shredding.
What if Missing Documents Cause Me to Miss the Filing Deadline?
Don’t miss filing your taxes simply because you’re missing a document. If you pass the filing deadline, you could be assigned penalties and interest by the IRS. You could owe an additional 5% to 25% of your total tax due, a fee of $210 and additional escalating penalties depending on how late you file and the amount you owe. A business owner can rack up $100,000 in penalties for failure to pay on time. Instead, take the honest approach and notify the IRS about what’s going on. If you know in advance that you won’t be able to meet the deadline, file for an extension using IRS Form 4868. Or, if you later receive missing documents or realize something was omitted, file an amended tax return to keep yourself in good standing with the IRS. When in doubt, consult a tax attorney who can help you sort through your paperwork and keep things on track.
Dutton Legal Group – Indiana’s Tax Resolution Law Firm
The Dutton Legal Group helps the people and businesses of Indiana navigate ever-changing State and Federal tax codes. Our goal as experienced tax attorneys is to assist you in finding an immediate, cost-effective answer to your tax challenges. We provide a variety of tax services from balance resolution and return preparation to wage garnishment relief and audit assistance. Make Dutton Legal Group your next call at 1-800-334-0255 or send an email to request a free consultation. Trustworthy and affordable, for over 15 years.