What you need to file taxes in 2022 explained – including two key documents

TAX season is upon us and if you're not an early bird filer, it's best to get prepared to make the process pain-free.

The Internal Revenue Service (IRS) is encouraging taxpayers to use the agency's online tools to file 2021 federal tax returns.

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Whether you are filing electronically or using a tax professional, you will need to gather important information, including two key documents to make the process easier.

Last year, the government mailed Americans economic stimulus checks which will need to be factored in. Look for Letter 6475.

If you received any advance child tax credit payments, you will need to note that, too. Look for Letter 6419.

The IRS says if you lost either of those letters, the information is online.

You will need to create an account where you can view the amount you owe, make and track payments and view payment plan details.

The IRS says to be ready with all the details so you can avoid delays and receive a quicker refund.

We have a checklist to make the process easier.

Personal information

All taxpayers will need tax identification numbers to do their taxes.

• Your Social Security number or tax ID number
• Your spouses full name, Social Security number or tax ID number and date of birth
• Information about your stimulus payment, which is also known as economic impact payment (EIP)
• Identity protection PIN, if one has been issued to you, your spouse or your dependent by the IRS
• IRS Letter 6475: this outlines your 2021 economic impact payments to determine if you're eligible to claim the recovery rebate credit
• Routing and account numbers to receive your refund by direct deposit or pay your balance

Dependent information

Parents and caregivers need to gather this information to file taxes.

• Dates of birth and Social Security numbers or tax ID numbers
• Childcare records, including the provider's tax ID number, if applicable
• Income of dependents and of other adults in your home
• Form 8332 showing that the child's custodial parent is releasing their right to claim a child to you, the noncustodial parent, if applicable
• IRS Letter 6419: this outlines the advance child tax credit payments you need to report

Sources of income

Not every form listed below will be needed to file your taxes, but if it pertains to you, make sure you have it ready when you are ready to file.

• Employed
  • W-2

• Unemployed
  • 1099-G

• Self-Employed
  • Forms 1099, Schedules K-1, income records to verify amounts not reported on 1099-MISC or new 1099-NEC
  • Records of all expenses: check registers or credit card statements, and receipts
  • Business-use asset information for depreciation, such as cost and date placed in service.
  • Office in home information, if applicable
  • Record of estimated tax payments made: Form 1040–ES

Rental income

• Records of income and expenses
• Rental asset information for depreciation, such as cost and date placed in service.
• Record of estimated tax payments made: Form 1040–ES

Retirement income

• Pension, IRA, annuity income: 1099-R
• Traditional IRA basis: this pertains to the amounts you contributed to the IRA that were already taxed
• Social Security and RRB (Railroad Retirement Board) income: SSA-1099, RRB-1099

Savings, investments and dividends

• Interest, dividend income: 1099-INT, 1099-OID, 1099-DIV
• Income from sales of stock or other property: 1099-B, 1099-S
• Dates of acquisition and records of your cost or other basis in property you sold, if basis is not reported on 1099-B
• Health Savings Account and long-term care reimbursements: 1099-SA or 1099-LTC
• Expenses related to your investments
• Record of estimated tax payments made: Form 1040–ES
• Transactions involving cryptocurrency

Other income and losses

• Gambling income: W-2G or records showing income, as well as expense records
• Jury duty records
• Hobby income and expenses
• Prizes and awards
• Trust income
• Royalty Income 1099–MISC
• Any other 1099s received
• Record of alimony paid/received with ex-spouse’s name and Social Security number
• State tax refund

Types of deductions

There are several deductions you can take, but not all the forms below may apply to your situation.

• Home ownership
  • Forms 1098 or other mortgage interest statements
  • Real estate and personal property tax records
  • Receipts for energy-saving home improvements
  • All other 1098 series forms

• Charitable donations
  • Cash amounts donated to houses of worship, schools, other charitable organizations
  • Records of non-cash charitable donations
  • Amounts of miles driven for charitable or medical purposes

• Medical expense: amounts paid for healthcare, insurance, and to doctors, dentists, and hospitals

• Health insurance: Form 1095-A if you enrolled in an insurance plan through the Marketplace Exchange

• Childcare expenses
  • Fees paid to a licensed day care center or family day care for care of an infant or preschooler
  • Amounts paid to a baby-sitter or provider care of your child under age 13 while you work
  • Expenses paid through a dependent care flexible spending account at work

• Educational expenses
  • Forms 1098-T from educational institutions
  • Receipts that itemize qualified educational expenses
  • Records of any scholarships or fellowships you received
  • Form 1098-E if you paid student loan interest

• K-12 educator expenses: receipts for classroom expenses for educators

• State and local taxes
  • Amount of state and local income or sales tax paid, other than wage withholding
  • Invoice showing amount of vehicle sales tax paid and/or personal property tax on vehicles

• Retirement and other savings
  • Form 5498-SA showing HSA contributions
  • Form 5498 showing IRA contributions
  • All other 5498 series forms: 5498-QA, 5498-ESA

• Federally declared disaster
  • City/county you lived/worked/had property in
  • Records to support property losses. For example, appraisal and clean-up costs
  • Records of rebuilding or repair costs
  • Insurance reimbursements or claims to be paid
  • FEMA assistance information
  • Check the FEMA website to see if your county has been declared a federal disaster area

The filing deadline to submit 2021 tax returns or an extension to file and pay tax owed is Monday, April 18, for most taxpayers.

We share two important tax rules new retirees need to know.

Plus, 10 tax credits to cut your federal tax bill or boost your refund by up to $47,200 this filing season.