Tax filing in Vancouver, WA, can be an intimidating process. You may not know what documents you need to gather beforehand and may become overwhelmed with the entire ordeal. No need to worry! This is your guide to keep everything as simple and easy as possible for yourself regarding tax preparation.
Social Security details
The first thing you need to get together when it comes time for tax preparation is your Social Security card. You will also be asked for a number from an employer, or if you are self-employed, you will need a federal taxpayer identification number (FEIN). Employers are required by law to provide this information to workers during the year of employment.
You will also need to gather your most recent 1099 (or W2) form, as that is how you report interest and dividend income. It is a requirement for all payers of these types of income to provide the tax preparer with this form at the end of each tax year, so be sure to make copies should you lose one.
If you have any foreign bank accounts reported on Form TD F 90-22.1, individuals and businesses are required to file a report if the total amount of non-US assets exceeds $10,000 at any point during the year in question. You will also be asked for information regarding your investment holdings (reported on form 1040).
If you have dependent(s), they should provide information pertinent to the financial situation in question. If a child is under the age of 17, you will need their Social Security number and birth certificate for proof of citizenship (if they were born outside the US).
Without this document, claim an exemption on your Vancouver, WA, taxes instead.
– If there are any children over the age of 17, they will also need to provide their Social Security number.
– If you have a spouse that you claim on taxes, then be sure to gather all pertinent information, including federal and state IDs, as well as proof of citizenship (should they not be born in the US).
Also, note any income your spouse may have earned and how much was contributed to the help for medical expenses.
Finally, if you have dependents such as an elderly parent or another relative, be sure to gather information on their assets like property or bank accounts along with the same forms used for other dependents.
If you are self-employed, you will need to gather all pertinent information regarding income during the previous year. This is much easier if you have a business that is incorporated (which can be beneficial anyways as it maintains your personal assets separate from business expenses), and what you will need for this type of tax preparation includes:
– A complete copy of your business tax returns for the previous year (with all schedules attached)
– Notices from banks or other financial institutions that show interest and dividend income
– Business records that detail expenses and sales
Documents like this are very useful in preparing yourself for much simpler tax services in Vancouver, WA. It will also allow you to maximize whether or not your enterprise is still viable.
Other types of income
These may be subject to self-employment tax, so be sure to gather the necessary information regarding payouts from your retirement accounts and Social Security.
– If a company employs you, gather all pertinent information along with a W2 form. It will show income (or lack thereof), how much was withheld for taxes, as well as how much was contributed to any retirement funds.
– If you have income from Social Security that is included on form SSA 1099 and are considered self-employed, you will need to gather this information as it is used to determine if additional taxes are required for the self-employment tax.
Disability benefits can be reported on form SSA 1099.
– If you receive SSI benefits, that is considered income and will be shown on form SSA1098 with totals listed for the previous year.
– Finally, any earned income from the military can be reported in the same way taxes are calculated for Social Security (the difference lies in whether or not they were retired
Receipts for expenses
If you are self-employed, gather all receipts for business purchases like new equipment or vehicles. If you purchased the materials throughout the year, be sure to keep a running tab on amounts spent and if those costs qualify for anything.
To report medical expenses gathered from this tax preparation method, you will need to collect all receipts that detail the payments made for:
– Doctor visits or medical treatment for yourself, spouse, and dependents
– Prescription drugs that were not covered by insurance plans
Don’t be afraid to claim what you are entitled to when it comes to tax preparation. The government wants you healthy enough to work, so they give doctors allowances regarding tax deductions.
– If you make donations to organizations, then be sure to gather a record of that as well. List the amount donated and who they were given to. Also, have details regarding any expenses that may have been incurred by you (or your business) while visiting or participating in events on behalf of the organization(s). These are considered business expenses.
If you are unsure of what forms need collecting during tax preparation in Vancouver, WA, the above post gives you a precise guide on all the documents you need once the tax season comes around. Planning to file your returns, give us a call, and we’ll take care of everything for you!
Does Social Security count as income?
Yes, some types of Social Security incomes are considered taxable income. When determining your adjusted gross income and taxable income, you will need to add the amount that was reported on the SSA1099 form, which states the total compensation for your Social Security benefits.
What happens if you don’t file your taxes and you don’t owe?
If you are a person who is required to file an income tax return and don’t, the penalties will be up to five percent of your balance due, in addition to any other fees that were incurred during the process.