Published Aug. 08, 2025 01:24AM EDT
Information to Collect for Tax Season
When tax season comes along, it is helpful to know what tax information to collect. Below is a short overview of the most common documents and information needed for preparing your return.
Income
If you received money, cash equivalents, or something of value in the year, the IRS likely considers it income. This is true even if it is received outside of the United States because US tax residents are taxed on their world-wide income. Generally, this income is reported on one of the following forms:
- W-2: Reports wage income from your employer
- K-1: Reports income from pass-through entities (partnerships, S corporations), trusts, and estates
- 1099-INT, -B, and -DIV: Report interest, stock sales, and dividend income
- 1099-G: Reports unemployment income, which is typically taxable
- 1099-R and SSA-1099: Report retirement income from retirement account and social security income
- 1099-MISC: Often used to report rental income
- 1099-SA: Reports HSA distributions
If you have income not reported on one of the above, it still needs to be reported. This is often the case with income from crypto transactions and gambling income, where taxpayers often have to calculate their gains and costs without the benefit of an IRS template form. Do not think, however, this means the IRS is wholly blind to this income. It can, and has, sought taxes owed on these forms of income with increasing frequency.
Self-Employment Income
Income from your own business or side-project also needs to be reported. The forms most often used for these are the 1099-NEC and the 1099-K. Many businesses, however, also keep their own books. This is important to do so you can be sure all income is reported. And if there is a discrepancy between the IRS forms and your business’s book, the IRS will expect to see the income reported from the forms as the minimum income of the business.
Do not forget about expenses. Even for a short gig, the income generated can be offset by the expenses accrued to obtain that income. You need to be able to document the expense. But so long as the expense is an “ordinary and necessary” cost of generating the income, it can be used to offset the income.
For owners of pass-through entities, such as partnerships, information to collect for tax season includes any costs that were not reimbursed by your partnership. These can be an additional deduction on your return. This can include ordinary and necessary expenses to do work while traveling, such as airplane wifi or unique cell phone charges such as international fees.
Deductions
Deductions reduce your taxable income. For example, if you make $100,000 in a year and have a $20,000 deduction, your taxable income is $80,000. Most taxpayers take the standard deduction, which in 2024 is $14,600 for single taxpayers and $29,200 for married filing jointly taxpayers. To see if it is better to itemize, the information to collect for tax season includes:
- Form 1098 from the lender that holds your mortgage
- Taxes paid for state and local income taxes and real estate taxes (combined, capped at $10,000)
- Charitable donations
- Out of pocket medical expenses (if you think they exceeded 7.5 percent of your income)
- Casualty losses, such as from flood damage (if caused by a federally declared disaster)
Even if itemizing deductions is not beneficial, there are other costs to collect that still are:
- Student loan interest (1098-E)
- Expenses accrued as a teacher or educator (capped at $300)
- Retirement account contributions (traditional IRA, SEP, HSA)
- Alimony paid
- Premiums paid for health insurance if self-employed
Tax Credits
Tax credits differ from deductions by reducing your tax liability dollar for dollar. For example, if you owe $1,000 in taxes and have a $100 credit, your tax liability is $900. A deduction with the same numbers reduces your tax liability only by 100 x your marginal tax rate. The most common tax credits require the following information:
- Childcare costs for daycare, after-school programs, and summer camps (collect provider’s name, address, tax identification number, and the cost)
- Higher education costs reported on Form 1098-T
- Health insurance credits calculated based on information in Form 1095-A
- Child tax credit
The above is an overview of the most common information needed to prepare a return. Many taxpayers have unique situations and developments, which Mid-Atlantic Law & Tax is happy to review and discuss with you.
