Your 2020 Tax Document Checklist

By: Stacey Nickens

As I have written about before, it is important to get your tax return completed as soon as possible. You have until April 15 to file your return. However, the IRS has already said that there will be delays in sending out refunds. Earlier tax preparers will be more likely to receive their refund at an earlier date. Additionally, fraudsters are especially active right now. Submitting your tax return early will help protect you from becoming the victim of tax fraud.

All of that said, it can feel overwhelming to collect all of your necessary tax documents. I have thus compiled the below list to assist you in collecting the necessary documents to complete your return. Additionally, current Elm3 clients can access their tax document organizer by going to, clicking the tab titled, “Client Login,” and logging into SmartVault.

Without knowing your individual needs, the below tax document list may not be comprehensive. However, you can use this list as a starting point and set up a tax appointment to determine if you need to collect additional paperwork.

Documentation of Your Income
You will need documents that prove your annual income, including:

  • W-2: Employers must provide W-2s by January 31 to any employee whose income was greater than $600 in 2020 and who…
    • Withheld income, Medicare, or Social Security from their paycheck, or
    • Did not claim an exemption from withholding on their W-4 or would have had income tax withheld if they had claimed one withholding allowance
  • 1099s: Those who were self employed or worked as an independent contractor will use a 1099 as proof of income. Employers who paid independent contractors $600 or more in 2020 must provide the contractor with a 1099 by January 31.

Additional sources of income:

  • Wages and Tips
  • Form 1099-G: Unemployment income
  • Forms 1099-INT, 1099-DIV, and 1099-B: Investment, interest, and dividend income
    • You should also bring brokerage statements that show the dates you bought and sold stocks or bonds during the year. You will want to provide confirmation receipts of these buys or sales to show cost basis and fees paid.
  • Form 1099-R: Distributions/income from pensions, annuities, retirement or profit-sharing plans, IRAs, and insurance contracts
  • Form 1099-S: Income from real estate sales
  • Form 1099-C: Income that results from the cancellation of debt
  • Form 1099-Misc: Self-Employed Business/Farm Income and Expenses
  • Form 1099-NEC: Independent contractor income
  • Rental property income
  • Form SSA-1099: Social Security income
  • Form 1099-SA: Distributions from an HSA, MSA, or disability payments
  • Taxable alimony
  • Income from jury duty
  • Form W-2G: Income from gambling or lottery winnings
  • Schedule K-1: Income or loss from partnerships, S corporations, or estates and trusts.

Documentation for Deductions and Tax Credits
Tax credits reduce your tax bill by a certain amount, while deductions reduce your taxable income. Many people choose not to itemize their deductions and instead take the standard deduction. Click here to review the standard deduction for the 2020 tax year.

However, you may want to calculate your possible deductions to see if it is more beneficial for you to itemize your deductions or for you to take the standard deduction. You would start by needing to collect the necessary paperwork for the following credits and deductions:

  • Student Loan Interest Deduction: You can deduct up to $2,500 from your income for interest that you paid on student loans. You should receive a Form 1098-E showing how much interest you paid during the year.
  • Real Estate or Personal Property Taxes Deduction: You can deduct amounts paid for real estate and personal property taxes from your Adjusted Gross Income. You must show your tax preparer proof of tax payments.  If your mortgage company pays real estate taxes for you from an escrow fund, they will send proof of this payment on Form 1098 by January 31. To get the amount paid for Personal Property Taxes, contact your taxing authority and ask them to give you the amount paid during the year. Depending on the state, Personal Property Taxes may or may not be deductible.
  • Mortgage Interest Deduction: You can deduct interest paid on your mortgage loan. You should receive Form 1098 by January 31, which will show the interest you paid on your mortgage in 2020. The information may also be found on your mortgage bill. Make sure to show your tax provider your mortgage bill or Form 1098.
  • Refinancing Deduction: If you refinanced your home in 2020, you may be able to deduct a portion of the points paid on your loan. Make sure to collect your Closing Disclosure form provided by your bank or title company. This form will show the points that were paid. If you are refinancing a loan that was from a prior refinance, give your tax preparer the Hud1 from the previous loan.
  • Closing Expenses Deduction: You may be able to deduct allowable closing costs. Show your tax preparer your Closing Disclosure to make sure you have been given credit for all allowable closing costs that you can deduct.
  • Rental Property Deductions: You can deduct certain expenses for acquiring, maintaining, insuring, and operating a rental property. You will want proof of…
    • Mortgage interest paid
    • Real estate property taxes
    • Insurance
    • Cost of the property (separate out the land cost)
    • The cost of HVAC and other short-term assets: If you can itemize the cost of HVAC and other short-term assets that are a part of the building, they can be depreciated with a shorter life and provide more deductions in the first years.
    • Maintenance
    • Repairs
    • Auto Expenses – Mileage or Actual expenses
    • Supplies
    • Utilities (including cell phone if used in the rental activity)
    • Computer and internet expenses
    • Management fees or commissions
    • Legal and Professional fees including tax preparation
  • State Income Taxes or Sales Tax Deduction: You can deduct either Sales Tax or State Income tax. Depending on your situation, you may have the option to claim one or the other. If you claim sales tax, bring documentation of major purchases, such as the purchase of a car, truck, boat or similarly-large items.
  • Sale of Real Residence Exclusion: You need to report the sale of your main residence only if you have a gain for which part of the gain is taxable. If you owned the home and lived in it as your primary residence for at least two years, you may be able to exclude up to $250,000 ($500,000 if Married Filing Jointly) of the gain from your income.
  • Medical Expenses Deduction: You can deduct unreimbursed medical expenses if they amount to more than 10% (or 7.5% if 65 years and older) of your adjusted gross income. You would want to provide your tax preparer with proof of your doctor and dentist bills, your prescriptions, your mileage from driving to appointments, and your insurance premiums.
  • Charitable Donation Deduction: You can deduct donations to qualified charities. Bring a record of these donations and their amounts, whether they were made directly or through employer withholdings.
  • Educator Deduction: Educators can deduct up to $250 in related expenses.
  • College Expense Credits: You can use the American Opportunity Tax Credit (up to $2,500 per student) or the Lifetime Learning Credit (up to $2,000 per student) to earn credits for college expenses. Bring the amount you paid for higher education (1098-T) to your tax preparation appointment.
  • Child and Dependent Care Tax Credit: You may qualify for this credit if you paid someone to care for your children while you worked or searched for work. You can receive a credit for up to 35% (or up to $3,000) of the costs associated with this childcare. Dependents can be children under the age of 13 or spouses or parents who require care. To file for this credit, make sure to bring the care provider’s name, address, and Taxpayer Identification Number (TIN) to your tax preparation appointment. You will also need to document the total amount of expenses you paid to your care provider during the year.
  • Adoption Credit: For each adopted child, you may be able to credit up to $14,080 in adoption-related expenses.
  • Earned Income Tax Credit: The maximum Earned Income Tax Credit for low and moderate-income workers and working families is $6,728. The size of the credit depends on your family’s size, your filing status, as well as other factors.
  • Alimony Expenses: If you paid alimony, it is deductible on your income taxes. You will need to give alimony recipient’s Social Security Number to your tax preparer.

Depending on the deduction or credit, a provider may send you documents to support you in filing for the credit or deduction. For example, mortgage companies often send a document that you can use to file for a Mortgage Interest Deduction. However, for other credits and deductions, you must keep receipts. For example, educators must document their expenses with receipts.

Those who are self-employed can deduct business expenses. Beyond collecting any documents necessary for claiming the below deductions, you will also want records of any estimated tax payments you prepaid during the year. Some self-employed deductions include:

  • Home office expenses, such a portion of your mortgage, rent, or utilities that you use to cover your business. You will need to record your home size, office size, and utility expenses.
  • Car mileage and business travel expenses: If you travel for your job, you may be able to deduct related expenses.
  • Necessary business technology and supplies.
  • Half of the meal expenses for client meetings or business travel

Last Year’s Federal and State Tax Returns
While last year’s returns are not strictly necessary, you or your tax preparer can use last year’s returns as a reference point.

Identification Cards and Information

  • Social Security Card(s) or Numbers: Your provider will likely need your Social Security number as well as those of your children. Additionally, if you have changed your name due to a marriage, divorce, or other reason, you will need to inform your provider of the last name that the Social Security Administration has on file for you.
  • Current Driver’s License: Your provider will need your driver’s license to verify your identity.
  • Voided Check: In order to set up electronic tax refunds, your provider will need your bank routing number and account number.

As you collect the necessary documents, I encourage you to reach out and schedule your tax preparation appointment as soon as possible. During this process, Elm3 will also guide you in finding and collecting the necessary documents to complete your return.

Sources: Policy Genius