As Your Tax Documents Arrive in the Mail, Begin to Get Organized and Don't Procrastinate

January is flying by, and by now you’re probably starting to get some of your tax documents in the mail. Depending on your situation, it may be as simple as receiving a copy of your W-2, or you may be waiting for a dozen different forms. Whatever your tax situation, it’s important to keep an eye out for these documents, make sure you file them in a safe place, and begin thinking about completing your tax return.

As you begin receiving your tax documents, now is also a good time to begin organizing information that you’ll need for your taxes that may not be sent to you in the mail. Things such as reciepts, records of various expenses or purchases, charitable contributions, vehicle registration receipts, and so on. The last thing you want to do is to be scrambling at the last minute trying to track down everything you need to file your taxes on time in April.

Documents to Look For

For most people who earn a paycheck through an employer, the most important document you’ll receive in the mail is your W-2. The W-2 form is one sent by your employer that reports all of your earned wages, taxes paid, and any deductions. If you worked at more than one job throughout the year, you’ll want to receive one of these documents from each employer. If you have not received your W-2 by mid-February, you should contact your employer to see if it was sent or if there is a delay. And double check the W-2 for accurate information. The earlier you catch an incorrect address, Social Security number, or wages, the sooner you can have those corrected. 

Aside from your employer wages, if you have generated any outside income either through self-employment, consulting work, or anything else, you should probably expect a 1099 in the mail. If it was freelance work, or other income generated for services provided, chances are it will be a 1099-MISC. But 1099 forms are used for a number of reasons, and you will also receive a 1099-INT for interest earned on things such as a savings account. Keep in mind that there may be a minimum amount earned before one of these is sent out. In the case of most banks, you won’t receive a form unless you earned $10 or more in interest, and in most cases you’ll need to earn $600 or more before a company sends out a 1099-MISC. Even if you earned less and won’t be getting a 1099, that doesn’t excuse you from reporting it on your taxes. 

Some other miscellaneous documents to keep an eye out for in the mail will vary greatly depending on your specific situation. But if you are repaying any student loans, you can expect a 1098-E that reports how much interest you paid. In addition, you might want to expect something from your mortgage company highlighting your mortgage payments, how much interest you paid over the year, and property taxes paid. And if you placed any trades in a taxable brokerage account, you can probably expect some information regarding those transactions. But whatever your situation, have a good idea of what to expect in the mail so that you can follow up on things if you don’t receive them by mid-February.

Get Organized – Even If You Plan to Hire an Accountant

If you do your taxes on your own, it can really pay off to stay organized. You know that if you’re sitting down at the computer to use TaxCut or TurboTax one afternoon, you don’t want to be wasting time sifting through a stack of papers looking for the information each screen asks for. So, as your tax documents begin to come in, start to organize them so they are easy to access when it comes time to do your taxes. Make sure you separate sources of income from expenses. If you have a lot of detailed expenses or itemize your deductions, start digging up all of the information you need. Instead of wading through a pile of receipts when doing your taxes, take the time now to put the information down in a spreadsheet so you just have one piece of paper to look at when going through the process. This can cut your tax preparation time down from a few hours to just 20 minutes. TurboTax® Online Federal Free Edition lets you file federal taxes online ‒ FREE!

Even if you plan on handing off your tax duties to an accountant, the same rules apply. If you’ve worked with this accountant in the past, you should already have a good idea of what they expect. But if this is your first time having someone else complete your taxes, you want to make their job easier so it can keep your costs down. First, ask your preparer what they need from you. The last thing in the world you want to do is show up at their office with a box full of papers and receipts. While you may need to keep this information for a number of years, it isn’t their job to sift through them and organize it for you. In most cases, they will ask that you go through your expenses and fill out a worksheet or keep track of totals for each category. They may want to come back to receipts to verify something, but there is no sense in increasing your tax preparation fees by making them your auditor as well. 

And start planning now so you’re not scrambling to make an appointment later. Accountants and tax preparing services get increasingly busy the closer you get to the April deadline, so think ahead. This doesn’t mean you have to do your taxes in February, but you should at least begin thinking about setting up an appointment. In a worst case scenario, accountants will be so busy come April that they may have to begin turning people away. If you thought your taxes were stressful enough, just wait until you’re two weeks out and you now need to try and find someone to fit you in.

A Little Preparation Goes a Long Way

So, don’t let things go down to the wire this year. Doing your taxes doesn’t have to be a stressful project. If you take the proper steps early to make sure you receive all of your necessary paperwork, and take a few minutes to organize all of your information, it will be incredibly easy to get through tax season. I generally do my own taxes with the help of TaxCut. It’s inexpensive, and they even have an option to do them right online without the need to download or install any software. If doing taxes on your own isn’t your thing, start asking around for referrals for a good accountant. Regardless of how you do your taxes, if you plan ahead, you’ll have no reason to fear April 15th.

Author: Jeremy Vohwinkle

My name is Jeremy Vohwinkle, and I’ve spent a number of years working in the finance industry providing financial advice to regular investors and those participating in employer-sponsored retirement plans.

6 comments
SStueve
SStueve

On May 1, 2012, I got an "Important Tax Return Document" - Form 5498. I filed my taxes already on March 31, 2012. Now what do I do?

MoneyTheory
MoneyTheory

I learned the importance of some of these concepts a few years ago when it was time to file my taxes, and I had to look all over the house for where I kept the forms that came in the mail. Now, I keep a folder just for them around this time of year, and as soon as they come in, they go right in there!

Craig
Craig

@Eric Thank you. I haven't received anything yet from either employer, so I will give it a month and then take action.

thomas
thomas

my w2 online showed up today. The first of many documents to come.

Eric J. Nisall
Eric J. Nisall

@ Craig:

The legal deadline to distribute both W-2 and 1099 forms is January 31st, whether by hand, e-mail fax, or mail. All companies should know about this, and if you do not receive yours by the middle of February, you should feel completely within your rights to inquire into the status of your W-2.

Craig
Craig

Should employers automatically know they have to send out the W-2 form or do you need to be proactive and remind them? I am at a new job so would need 2 forms and am not sure when the appropriate time would be to ask the old employer.

Eric J. Nisall
Eric J. Nisall

Being organized and planning is always one of the most essential elements for financial health, and especially during tax time. With documents coming from so many sources, in differing formats, and at different times it is important to have a plan for compiling tax information. Being in the field myself, I have seen how difficult it can be to complete a tax return when I am constantly calling a client to obtain missing information, and it can be quite frustrating on both ends. What I (and many of my contemporaries) do is provide clients with a tax organizer, which is essentially a checklist that contains all of the prior years information and enables clients to input their figures for the current year side-by-side. This enables the client to see what information they need to collect and to make arrangements to obtain that information should they be missing it. I also post a helpful checklist for staying organized while all of the tax documents start rolling in called Get A Jumpstart On Your 2008 Tax Return By Getting Organized Early