Be prepared: Tax season approaches


It’s almost time to begin gathering your tax information. You should receive most of your 2013 tax documents by early to mid-February 2014.

Whether you expect to prepare your own return or use the services of a professional, it pays to be organized.

Probably the most important document you need to locate is a copy of last year’s tax return. The tax situation of most individuals does not change dramatically from year to year. So the information shown on last year’s return is a good guide to what you need to look for this year.

On the other hand, if you experienced a life event during 2013, your tax situation could be in for a big adjustment. Life events include marriage, divorce, birth of a child, retirement, a business startup or a change in employment.

Everyone’s situation is different, but most people receive some common tax documents in the mail:

  • Employers will send you W-2 forms.
  • If you freelance, clients that you completed at least $600 worth of work for during 2013 should send you a 1099-MISC form.
  • If you’ve earned dividends on mutual funds or other investments, you should receive one or more 1099-DIV forms from the account administrator.
  • If you received a distribution from an IRA or company retirement plan, you should receive a 1099-R form.

You may receive other income tax-related forms as well:

  • Receipts or acknowledgments for charitable donations
  • Real estate and personal property tax receipts
  • A 1098 form from your mortgage company
  • A 1098-T form if you paid college tuition costs

All of these forms will be needed to see whether you qualify to itemize your deductions. If you are self-employed, you will also need to gather receipts for all deductible business expenses. Check out IRS Publication 535 for more information about business expenses.

Looking ahead to next year at this time, while you’re digging up all these records, sort everything and create files to hold:

  • Bills
  • Bank, credit card and retirement account statements
  • Receipts for deductible items and charitable donations

Then keep items sorted as they come in during 2014. That way, next year’s income tax return should be easier to prepare.