COVID Tax Tip 2021-16: The first step of tax preparation is gathering records

IRS Tax Tips February 9, 2021
Useful Links: IRS.gov Help For Hurricane Victims News Essentials What's Hot News Releases IRS - The Basics IRS Guidance Media Contacts Facts & Figures Around The Nation e-News Subscriptions The Newsroom Topics Multimedia Center Noticias en Español Radio PSAs Tax Scams/Consumer Alerts The Tax Gap Fact Sheets IRS Tax Tips Armed Forces Latest News IRS Resources Compliance & Enforcement News Contact Your Local IRS Office Filing Your Taxes Forms & Instructions Frequently Asked Questions Taxpayer Advocate Service Where to File IRS Social Media	Issue Number: COVID Tax Tip 2021-16 The first step of tax preparation is gathering records As taxpayers get ready to file their 2020 tax return, they should start by gathering their records. Taxpayers should gather all year-end income documents to help ensure they file a complete and accurate 2020 tax return and avoid refund delays. Taxpayers should have all necessary records handy, such as W-2s, 1099s, receipts, canceled checks and other documents that support any income, deductions or credits on their tax return. Most taxpayers should have already received income documents including: 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 Here are a couple other things taxpayers can do to prepare to file. View IRS account online Taxpayers can view their online account. This allows them to see the latest information about their federal tax account and most recently filed tax return through a secure and convenient tool on IRS.gov. This can help taxpayers if they need information from last year's return. People with an account on IRS.gov can also see the amounts of their Economic Impact Payments. This will be helpful to eligible individuals who either did not receive any Economic Impact Payments or received less than the full payments. They may claim the recovery rebate credit on their 2020 federal tax return. People should visit Secure Access: How to Register for Certain Online Self-Help Tools for more information about how to create an account or how to reset the username or password. Review unemployment benefits Unemployment compensation is taxable and must be included as gross income on a taxpayer's return. Taxpayers should receive a Form 1099-G showing their unemployment income. They can have federal taxes withheld from their unemployment benefits or make estimated tax payments, but many do neither. In that case, taxes on those benefits need to be paid when their 2020 tax return is filed. Therefore, taxpayers who didn't have tax withheld from their payments may see a smaller refund than expected or possibly have a tax bill. Individuals who receive a Form 1099-G for unemployment compensation they were not paid should contact their state tax agency and request a corrected Form 1099-G. States should not issue Forms 1099-Gs to taxpayers they know to be victims of identity theft involving unemployment compensation. Taxpayers should file an accurate return including the income they actually received. Taxpayers who are victims of identity theft involving unemployment compensation should not file an identity theft affidavit with the IRS. More information: Tax Topic 418, Unemployment Compensation Publication 525, Taxable and Nontaxable Income What taxpayers need to know to claim the earned income tax credit Share this tip on social media -- #IRSTaxTip: The first step of tax preparation is gathering records. https://go.usa.gov/xscT7 Back to Top         Thank you for subscribing to IRS Tax Tips, an IRS e-mail service. For more information on federal taxes please visit IRS.gov. This message was distributed automatically from the IRS Tax Tips mailing list. Please Do Not Reply To This Message.

 

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