Information And Forms You Need To File Taxes
No matter what method you choose to file your taxes, there are certain items you will need to have on hand.
You need to identify yourself and your dependents by Social Security number. You also need to document your filing status, taxable income, the amount of tax you’ve already paid, and any deductions and credits for which you may be eligible.
Here’s what you’ll need to have handy:
- Names, dates of birth, and Social Security numbers for yourself, your spouse, and any dependents
- Form W-2, which you receive from your employer and which reports your income and taxes already paid by your employer on your behalf
- Form 1099-NEC , which you should receive if you earned more than $600 working for a non-employer entity, worked a contract job, or had a side gig
- Form 1099-MISC, which you would receive if you earned more than $600 in other income, including rents, prizes, fishing boat proceeds, or crop insurance payments
- Form 1099-INT, which you would receive from a bank or other financial institution if you earned more than $10 in interest during the tax year
- A record of your retirement account contributions
If you plan to itemize deductions rather than take the standard deduction, these are the records most commonly needed:
Providing Additional Income Support To Canadians
The Government of Canada has indicated from the outset that there would be no penalties or interest in cases where CERB needs to be repaid. However, we recognize that, for some individuals, repaying the CERB could present a significant financial hardship. For this reason, we will give Canadians more time and flexibility to repay based on their ability to pay. We will work with impacted individuals on a case-by-case basis. There is no deadline to repay COVID-19 emergency benefit payments.
If you mistakenly received COVID-19 emergency benefit payments, or your situation has changed since you first applied for one of these benefits, you can repay the CRA via My Account, online banking, or mail.
Newly announced on February 9, 2021, targeted interest relief is being provided to Canadians who received COVID-related income support benefits. Once individuals have filed their 2020 income tax and benefit return, they will not be required to pay interest on any outstanding income tax debt for the 2020 tax year until April 30, 2022.
Self-employed individuals who applied for the CERB and would have qualified based on their gross income will not be required to repay the benefit, provided they also met all other eligibility requirements. The same approach will apply whether the individual applied through the CRA or Service Canada.
Types Of Tax Credits And Benefits
There are two types of tax credits:
Benefits can help with various living expenses, such as raising children, housing, loss of income and medical expenses.
Read the Canada Revenue Agencys General Income Tax and Benefit Guide and Forms Book to learn more about which tax credits you can claim.
With the Ontario Child Care Tax Credit, you could get back up to 75% of your eligible child care expenses. It applies to eligible child care options, including care in centres, homes and camps.
The Low-Income Workers Tax Credit provides up to $850 each year in Ontario personal income tax relief to low-income workers, including those earning minimum wage.
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What Tax Documents Do I Need To Keep
It may be wise to keep your annual tax returns from at least the last three years. You’ll likely want to reference your prior year’s tax return when you file the current year’s return. You’ll also want to keep any receipts from charitable contributions, proof for tax deductions or tax credits you hope to claim, and any forms the IRS sends you year-round.
What Is An Ss
If you dont have an employer identification number, or EIN, use Form SS-4 to apply for one. The nine-digit number is assigned to employers, sole proprietors, corporations, partnerships, estates, trusts, certain individuals, and other entities for tax filing and reporting purposes. Use the IRSs Do You Need an EIN? to determine if you need to apply for one. You can receive your number more quickly by applying online.
Best for:Employers who answer yes to any of these questions, and others who need an EIN.
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If You Have One Or More Employers
If you work for someone elsemeaning, employment, and income taxes are deducted from your paychecksyou will need at least these two forms:
- W-2: Your employer will mail these forms to your house no later than January 31st.
- 1040*: Depending on the complexity of your taxes, there are three 1040 forms to choose from 1040-EZ, 1040A, or the original 1040. .
How Do I Know If I Qualify And What If I Don’t Owe Taxes
Whether or not a family owes tax money or has filed taxes before, they will need to file a return to get all or the rest of their money.
Eligible families who didnt receive any advance child tax credit payments during 2021 can still claim the full amount of the child tax credit on their federal tax return. Those families who are unsure of whether they’ve received payments, or potentially received paper checks that went uncashed, can visit the Child Tax Credit Update Portal, to see how much of the credit they should have received.
Additionally, families who received payments should have received a “Letter 6419, 2021 advance CTC” notice, which includes information on the amount of advance payments families have received and tax information for filing purposes.
However, the IRS has said that some people may have received incorrect information on their forms. The portal can help people who want to confirm the correct amount they should have received. Despite any inconsistencies in documentation, the IRS advises that taxpayers should keep the letter, and any other IRS communications about advance payments, with their tax records.
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Documents That Support Tax Deductions
Identifying the documents youll need to claim certain tax deductions can be an arduous process. Ideally, youve been collecting them all year long as you paid certain expenses.
Its not necessary to provide your receipts to the IRS unless youre audited, but youll need them to ascertain how much you can claim for various deductions, and youll want to keep them on hand just in case. While you can take the easy way out and simply claim the standard deduction for your filing status, youll have to know how much you spent on qualifying expenses if you decide to itemize instead. Common itemized deductions include charitable giving, state and local property and income taxes, medical expenses, and health insurance.
A full list of available itemized deductions appears on Schedule A, which you must complete and submit with your tax return if you elect to itemize.
How Income Tax Works
Federal and Ontario income taxes are paid to the Canada Revenue Agency , which is part of the federal government.
Income tax is commonly taken off your pay by your employer, or off your pension, and sent directly to the CRA. You may also have to calculate the tax you owe and send a payment to the CRA.
Each year, you should file a tax return with the CRA to:
- report the income youve made
- ensure youve paid the correct amount of income tax
- access tax credits and benefits
Learn more about how much tax you should pay on each portion of your income.
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File Electronically In Just Minutes And Save Time
We know that filing your taxes can sometimes be unpleasant. That is why our helpful online tax preparation program works with you to make the filling process as pain-free as possible. Many filers can use our online tax software to electronically file their taxes in less than 15 minutes.
To use the E-file software, a visitor simply needs to create a free account , enter their taxpayer information, income figures, then any deductions they may have, and our software will calculate and prepare the return. Once a user has completed preparing their return they will be provided the option of either e-filing or printing and mailing. It’s as simple as that.
How Do I Apply For An Itin
If you want to file a tax return but cannot obtain a valid SSN, you must complete IRS Form W-7, Application for IRS Individual Taxpayer Identification Number. Form W-7 must be submitted to the IRS with a completed tax return and documents verifying identity and foreign status. You will need original documents or certified copies from the issuing agencies. The instructions for Form W-7 describe which documents are acceptable.
Parents or guardians may complete and sign a Form W-7 for a dependent under age 18 if the dependent is unable to do so, and must check the parent or guardians box in the signature area of the application. Dependents age 18 and older and spouses must complete and sign their own Forms W-7.
There are three ways you can complete the ITIN application:
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Adjustments To Your Income:
The following can help reduce the amount of your income that is taxed, which can increase your tax refund or lower the amount you owe.
- Student loan interest
- Medical Savings Account contributions
- Moving expenses
- Keogh, SEP, SIMPLE and other self-employed pension plans
- Alimony paid that is tax deductible
- Educator expenses
When Is The 2021 Tax Season
“Tax season” for the prior tax year is in the early months of the following year. So tax season for tax year 2021 will begin in January 2022 and end on the deadline date, April 15th.
Some residents and business owners in Louisiana and parts of Mississippi, New York, and New Jersey were granted extensions on their deadlines for filings and payments to the IRS due to Hurricane Ida. Due to the tornado in December 2021, taxpayers in parts of Kentucky were also granted extensions. You can consult IRS disaster relief announcements to determine your eligibility.
You’ll probably remember that the traditional deadline was pushed back for filing taxes in 2019 and 2020 due to the COVID-19 pandemic. However, no such change has been administered for the 2021 tax year.
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What You Need To Know For The 2021 Tax
Canada Revenue Agency
This year, the COVID-19 pandemic may have affected your tax-filing situation and may also affect the way you usually file your income tax and benefit return. Over 30 million returns were filed last season, and the Canada Revenue Agency wants to help you get ready to file your return this year.
Heres what you need to know for this tax-filing season, including filing options, COVID-19 benefits, and whats new.
Filing If You Received Covid
The CRA and Service Canada processed more than 27 million Canada Emergency Response Benefit applications, totaling more than $81 billion in payments to Canadians. The CRA also processed more than 2 million Canada Emergency Student Benefit applications that totaled more than $2 billion in payments.
If you received CERB, CESB, Canada Recovery Benefit , Canada Recovery Sickness Benefit , or Canada Recovery Caregiving Benefit payments, you will have to enter on your return the total of the amounts you received. You will receive a T4A and/or a T4E tax slip in the mail with the information you need for your return. You can view tax slips online as of February 8, 2021 in My Account. Residents of Quebec will receive both a T4A and RL-1 slip from the CRA, however, the RL-1 slip will not be available for viewing in My Account.
The CRA recognizes that receiving these slips might generate questions for Canadians. Individuals who believe they received a T4A or a RL-1 by mistake or believe there may be discrepancy with the information provided on these slips should contact the CRA.
If you received the CERB or CESB, no tax was withheld when payments were issued. If you received the CRB, CRSB, or CRCB, 10% tax was withheld at source. For Quebec residents who received the CRB, CRSB, and CRCB, 5% of the tax withheld will be reported on the T4A slip and the other 5% will be reported on the RL-1 slip.
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Documents For Claiming Tax Credits
Claiming some tax credits will require that you receive a Form 1098 for the paid expenses, most notably those that are available for education. Prior to tax season, youll want to keep detailed records of what you spend so you can support claiming other credits. Some tax credits are supported by your income documentation and your tax return.
A few of the more well-known individual tax credits that are available for the 2021 tax year include:
- Adoption credit: For a portion of expenses you paid to adopt a qualifying child
- American opportunity and lifetime learning credit: For qualifying educational expenses for you, your spouse, or your dependents, reported to you and to the IRS on Form 1098-T
- Child and dependent care credit: For expenses you paid for care by another individual for your child or disabled dependents so you could go to work, look for a job, or attend schoolyoull need the care providers tax identification number or Social Security number
- Earned income tax credit: For taxpayers with lower income
- Recovery rebate credit: For economic stimulus payments you were entitled to receive in 2021 but did not
- Savers credit: For contributions made to qualifying retirement plans
Why Is It Important To Understand Tax Forms
Nowadays, most people file their taxes using websites or other products that do the work of figuring out which forms you need to file and filling them out. But its not always cheap. Many of those services and software like TuroTax or H& R Block charge users depending on which forms they need to use.
For 2020 tax filings , anyone who made less than $72,000 a year is able to file for free as part of the IRS Free File program. Companies including Intuit, which makes TurboTax, H& R Block and others spent millions lobbying to bar the IRS from making its own free filing option while promising to create their own free products. But then, as ProPublica reported, they systematically undermined the truly free options by hiding search results and even though for many, theyre anything but.
If you havent filed yet, we recommend checking out our guide to filing your state and federal taxes completely for free, looking to see if you qualify for the Earned Income Tax Credit or learning how to track your refund. Though the IRS offers the option of paper filing, with the current COVID-19 state of affairs and a massive backlog of paper returns and documents the agency is encouraging taxpayers to file electronically to ensure prompt payment of refunds and avoid filing errors. Most paid and free tax prep services will tell you which forms you need to file, but if youre still confused, see below for a list of the most commonly used tax forms.
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What If I Live Outside The 50 States
While the coronavirus relief package included child tax credit benefits for residents of Puerto Rico, they were not eligible to receive the advance monthly payments. Instead, Puerto Rican residents can receive the full amount of child tax credit that they are eligible for by filing a federal income tax return this year. Additionally, residents of American Samoa, the Commonwealth of the Northern Mariana Islands, Guam or the U.S. Virgin Islands may be eligible for the full child tax credit payments, but they will need to contact their local U.S. territory tax agency.
Information About Your Income:
- Income from jobs: forms W-2 for you and your spouse
- Investment incomevarious forms 1099 , K-1s, stock option information
- Income from state and local income tax refunds and/or unemployment: forms 1099-G
- Taxable alimony received
- Business or farming incomeprofit/loss statement, capital equipment information
- If you use your home for businesshome size, office size, home expenses, office expenses.
- IRA/pension distributionsforms 1099-R, 8606
- Rental property income/expenseprofit/Loss statement, rental property suspended loss information
- Social Security benefitsforms SSA-1099
- Income from sales of propertyoriginal cost and cost of improvements, escrow closing statement, cancelled debt information
- Prior year installment sale informationforms 6252, principal and Interest collected during the year, SSN and address of payer
- Other miscellaneous incomejury duty, gambling winnings, Medical Savings Account , scholarships, etc.
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