The Internal Revenue Service is reminding taxpayers that organizing tax records is an important first step for getting ready to prepare and file their 2020 tax return.
The IRS says taxpayers should keep all necessary records, such as W-2s, 1099s, receipts, canceled checks, and other documents that support an item of income, or a deduction or credit, appearing on their tax return.
Taxpayers should develop a system that keeps all their important information together, which could include a software program for electronic records or a file cabinet for paper documents in labeled folders. Having records readily at hand makes preparing a tax return easier.
If you own your own small business or you’re self-employed you’ll definitely need to step-up your recordkeeping system; and, consider using a bookkeeping software such as QuickBooks On-Line to help you save time, money, and save on taxes; while being able to better and easier manage your business and cash-flow. Talk with Michael at Michael A. Cook LLC about setting up a simple recordkeeping/bookkeeping system today.
To avoid refund delays, taxpayers should be sure to gather all year-end income documents so they can file a complete and accurate 2020 tax return.
Most taxpayers will receive income documents near the end of January including (but not limited to) the following:
- Forms W-2, Wage, and Tax Statement
- Form 1099-MISC, Miscellaneous Income
- Form 1099-INT, Interest Income
- Form 1099-NEC, Nonemployee Compensation
- Form 1099-G, Certain Government Payments; like unemployment compensation or state tax refund
- Form 1095-A, Health Insurance Marketplace Statements.
The time to start getting ready is now for a better, easier, and more accurate tax filing and tax preparation. And, while you are preparing your information to file your tax return, give us a call at Michael A. Cook LLC, we’re 100% COVID Safe and you never even have to visit our tax firm in person. Now isn’t that just great?