The tax filing season for 2024 is here, and the busy bees at Queen Bee Tax Services want to help YOU prepare for a smooth and stress-free tax return. Whether you have a job, retired, or self-employed, here are some helpful hints to get yourself ready:
🐝Have a job?
Generally, individuals are given a tax statement that show the amount paid and the taxes/benefits deducted from pay through the calendar year. These tax statements, including a Form W2, Form 1099s (including 1099-MISC, -NEC, -R) must be provided to the employee by January 31st. Individuals will receive one of these forms for each and every job they had in the year, even if it was only for one day. Ensure you have one of these statements for every job you had during the calendar year!
🐝Self-employed?
If you were paid on a 1099-NEC (Non-employee compensation), worked in the gig economy (like ridesharing, food delivery, dog-walking, or free-lance), or were otherwise self-employed, your tax return may be more complex. Ensure you have all of the 1099-NECs for any contract work you completed, all receipts for income, and receipts for potential business expenses. It’s helpful to use a chart with all twelve months and detail the amount you received each month, as well as the specific expenses you incurred that month. By doing this, you’re creating a type of Balance Sheet, which acts as supporting documentation for your tax return. Do this for each “type” of self-employment job you had, if you had more than one.
Some companies like Uber and DoorDash will send year-end statements in January to help determine the amount of income and expenses you incurred. These too act as supporting documentation for your tax return.
🐝Retired?
Retired individuals will receive a year-end tax statement called a Form 1099-R by the end of January. Ensure you have a 1099-R for each of the retirement accounts or pensions from which you received income. Individuals on social security will receive a Form SSA-1099 which details the social security benefits received in the calendar year.
🐝Student?
Individuals who took classes from an institution of higher learning will receive a Form 1098-T from the school, which details the amount of tuition received from the individual as well as the amount of scholarships provided to the individual. Generally, if the tuition amount is greater than the scholarship amount, the individual may qualify for an education credit. Otherwise, if scholarship amounts are greater than the tuition, the remaining amount is considered taxable income.
Students may have purchased textbooks, software, notebooks, computers, calculators, or equipment to be used exclusively for school. These are called qualified education expenses and may help increase the credit amount or lower the remaining amount taxed as income). Provide any receipts for things related to school! (Food, transportation, and lodging are not qualified education expenses).
If you paid interest on a student loan, you will receive a Form 1098-E. This will help lower your taxable income… provide this to your tax professional.
🐝Other Common Situations
- Had student loans, credit card, or any other type of debt cancelled?
- You will receive a Form 1099-C by the end of January with details regarding the cancellation of debt.
- Health Insurance through the ACA Marketplace?
- Even if it was only for one day, you will receive a Form 1095-A. This form is mandatory if you purchases health insurance through the Affordable Care Act.
- Sell any stock, cryptocurrency, or personal property?
- Brokers will send a Form 1099-B and composite 1099s by February 15th. These detail any interest, dividends, and gains/losses on stock you sold.
- If you sold your personal residence, provide the closing statement. You may also receive a Form 1099-S.
- For personal property other than your home (i.e. lawnmower, RV, boat, jewelry, tools/equipment, etc), include the amount or receipt included in the original purchases and the amount of the sale. If you sold the item for more than you bought it, you may incur capital gains tax. However, if you sold the item for a loss, you may incur a capital gains loss. This lowers your tax liability.
- Concerned about the new law, regarding income received via Venmo/CashApp/PayPal over $600?
- GOOD NEWS! The IRS has once again delayed the implementation of this law! (They know everyone is still confused)
- This law only relates to business income received through third-party payment apps. Sending non-business things such as rent, reimbursement to friends, or gifts are NOT included in this law and WILL NOT be taxed, as they are personal and not business-related.
- Currently, only individuals who received over $20,000 and has more than 200 transactions in 2023 will receive a Form 1099-K.
- Next year, the threshold decreases to individuals who received over $5,000 in 2024. Those individuals will receive a Form 1099-K.
🐝Have more questions, or ready to file?
Schedule an appointment with the Queen today! Our phone number is (904) 450-5250.
We offer in-person, virtual, or drop-off services—whichever works best for you and your busy life.