How to Prep for Your Taxes Before You Get Your W-2

The size of this task varies greatly depending on the complexity of your financial situation. Determine the amounts you spent on health insurance, child care, school tuition, mortgage interest and similar living expenses by reviewing your bank records and the year’s paid bills. Personal finance and budgeting apps can sort this information and present it to you in tidy little summaries, but you can also use a calculator and calculate each expense category by hand.

You’ll also need records of the money you received during the year: Did you get any alimony? Did you make a few dollars selling handmade birdhouses? The IRS is interested in your entire income stream, as well as any large gifts or major purchases you might have made. If you run a small business in addition to your regular job, your record keeping will naturally be much more involved and will include all business income and expenses.

If you use an online tax preparation program, locate the log-in information that you used for your account last year. It’s always best to log in to the same account each successive tax year because the program will pre-fill some of the blanks and make your task quicker. If you’re starting from scratch, you’ll need birth dates and Social Security numbers for everyone in your family. Tax forms on paper do still exist and can be procured free from the IRS or a post office; however, the IRS is trying to transition to an online tax system and provides refunds much more quickly if you file online.

If you have any investments, pensions or savings accounts, you’ll receive a 1099 form from each institution. Education-related payments may generate 1098 forms, and you might receive a 1095 form if you purchased insurance through the new health insurance marketplace. It’s helpful to gather these forms as they arrive, as information from these forms must be included in your tax return. A separate envelope or file should be set aside to record the amounts you owe for state and local income taxes because these payments can be deducted from your income tax.

It’s much easier to stay on top of income tax season if you do a bit of preparatory work. Streamline the filing process by organizing your records and filling in basic personal information on a new tax return form. The day after your W-2s arrive in your mailbox, you can click “submit” or drop your tax return envelope in the mail and enjoy the spring with a sense of accomplishment.