- What exact information will be needed to file your taxes will depend largely on the types of deductions you are going to take. If you plan to deduct such things as business related mileage, lodging and meals as business expenses, for example, you will need to save all gas, meal and lodging receipts. It would also be a good idea to keep a record of where you were, why and when, so that you can verify that these expenses were actually business related if the IRS questions the expense.
If your business has purchased equipment, you should save all purchase receipts and use these for a deduction through depreciation. You will also need all receipts for expenditures such as office supplies, computers, phone and Internet services. If you have a home office, you may be able to claim a part or percentage of your home as a deduction on your taxes. This would require that you save your utility, telephone, Internet and other business related receipts in order to have proof of your expenses. - As for homeowners, you will be able to deduct mortgage interest, which will be reported to you on a Form 1098 from the lender. Other standard deductions include property tax receipts and auto licensing receipts. If you have any healthcare related expenses that total more than 7.5 percent of your income, these may be deducted as well. This can include any travel expenses and lodging that's related to your treatment or related to treatment for a spouse or dependent, as well as any expenses for actually visiting the doctor or hospital.
- If you have a full-time or part-time job, you will need a W-2, a 1099, or other tax document that shows the amount of dollars you were paid within the year. This information is supposed to be mailed by the employer or by anyone who hired you to do self-employed contract work by Jan. 31 of each year. For stocks and bonds, you will receive the amount of income on a 1099, as well as any withdrawals from an IRA. Lottery winnings will be reported to you on a W-2G form. Not all types of an inheritance are taxable. If you received an inheritance form, called a K-1, from the estate's executor, it will show how much of the inheritance is taxable and needs to be reported on your income tax.
- If you own real estate, and use it as a rental property, there are certain expenses that can be deducted from the income you receive on the property. These usually include mortgage interest, property taxes, and any repairs and operating expenses your requires. However, you cannot deduct any cost for improvements. This is because improvements presumably add value to the home. Therefore, improvements can be used though depreciation on your income taxes. Keep a copy of every receipt you receive dealing with the real estate, as well as the form 1098 for mortgage interest.
- If you own a business, you will also need a record of all sales or service invoices that have been done throughout the year. This is your proof of income. Keeping a general ledger of debits and credits will simplify this process and is common practice for most businesses.
- The list of documents needed will depend on many factors. Tax laws change from year to year, so it is important to contact a tax professional before starting your taxes each year to be certain you have everything you need to file your taxes correctly and in a timely manner.