Tax tip: Don't file until you get all necessary documents
2025-01-31
Category: economic

Tax filing season is underway and while many taxpayers may be eager to file sooner rather than later to get the process over with, they should be sure they have all the documents they need before doing so. The Taxpayer Advocate Service of the&#xA0;Internal Revenue Service (IRS) published a post encouraging taxpayers to wait to file until they&apos;re sure they&apos;ve received all of their tax forms to avoid having to file an amended return and face delays with receiving a refund. &quot;Amending your tax return after filing your taxes to report additional income missed on your original return&#x2026; can take months to process,&quot; the Taxpayer Advocate Service wrote. &quot;It really is worth waiting to file until all final income documents are received to avoid having to file an amended return.&quot; Among the common documents taxpayers should be on the lookout for is the W-2 form, which is provided by employers and contains information about a worker&apos;s total compensation, taxes paid, contributions to retirement accounts and other payroll deductions. TAXPAYERS LEAVING THOUSANDS OF DOLLARS ON THE TABLE AT TAX TIME: EXPERT  Another common tax document is the 1099 which comes in several forms, including the 1099-INT which reports interest income of $10 or more from banks and other financial institutions; 1099-DIV which reports&#xA0;income from dividends and other distributions; and the 1099-R for distributions of $10 or more from an annuity, pension, retirement account, or insurance plan. The 1099-K form reports income received from selling items through&#xA0;financial platforms like Cash App, eBay, Etsy, Paypal, Venmo and others &#x2013; and taxpayers whose transactions topped $5,000 in 2024 should be on the lookout for such forms. People receiving unemployment compensation will receive form 1099-G. Additionally, the 1099-MISC form reports miscellaneous income like royalties, rents, prizes and awards; while independent contractors who earn over $600 in a calendar year will receive a 1099-NEC. IRS ANNOUNCES START OF TAX SEASON &#x2013; WHAT TO KNOW  Retirees and taxpayers receiving&#xA0;Social Security benefits will receive form SSA-1099 or SSA-1042S to report the benefits they&apos;ve received. The 1098 form is another common document, which reports mortgage interest paid, insurance premiums and other details. The 1098-E variant goes to taxpayers with&#xA0;federal student loans and reports interest paid equal or greater to $600; while 1098-T goes to taxpayers who were paid for tuition and expenses, scholarships or grants. The Schedule K-1 form is provided to business owners, co-owners and partners,&#xA0;shareholders and investors, and people who receive income or assets from a trust or estate. The form reports the amount of income and losses that are passed through to each party with an interest in a business or trust. IRS INCREASES 401(K), OTHER 2025 RETIREMENT PLAN CONTRIBUTION LIMITS  Most tax documents should arrive from January through February, though there are some exceptions. Employers and financial institutions have to send W-2 and 1098-T forms, among others, by Jan. 31, while 1099 forms generally have a deadline of Feb. 18. The Schedule K-1 forms tend to arrive later than other tax forms. The Taxpayer Advocate Service says that if taxpayers don&apos;t receive their income forms by mid-February, they should contact their employer, bank, financial institution or other entity to request the needed form. The IRS also has resources to help taxpayers secure missing forms. &quot;Savvy taxpayers should make a list of the forms they expect to receive to ensure they&apos;re all accounted for before filing their tax returns,&quot; the Illinois CPA Society recommended. The group also&#xA0;published a guide to the various tax forms. GET FOX BUSINESS ON THE GO BY CLICKING HERE Taxpayers have until April 15, 2025, to file their individual tax returns or request a six-month extension to file. Those who request an extension still have to pay any anticipated tax payments by the deadline.