With just over four weeks left before the annual tax filing deadline is here, now is the time to check to see if you have all the tax documents you need. Even if you’re someone who deliberately waits until the last minute to file because you owe the government money, don’t make the mistake of being one of those filers who sits down on April 14th only to realize they are missing a critical tax document.
If you are thinking that you can simply file an extension and deal with the whole thing in six more months, here is a tax law reality: delaying the filing of the return does not exempt you from paying the money that you owe. In other words you need to come up with a reasonable estimate of the amount you owe and pay it no later than April 15th. If you don’t the IRS will charge you interest on the amount owed plus add a penalty on top of that. If you intentionally pay them less than you owe you can be subject to legal action if it can be proven your intent was to defraud the government by filing a false return.
The first document you will need to check is your Form W-2. Most people who work for an employer will need this to fill in their total income for the year, the amount of federal income tax they have paid during the year, as well as any state tax that has been deducted. A reminder: the 2018 changes to the tax law have eliminated the state tax deduction for most taxpayers. If you have multiple employers you should have multiple W-2 forms.
January 31 was the deadline for all employers to send you the Form W-2. If you do not have one, you need to contact your payroll or human resources department and find out what happened to it. They are likely to say they sent it, even if they didn’t, but the goal is to get the form in hand and not start an argument about what you think of the company. There is still plenty of time left.
Now if your company really did suck and went out of business, you will have to find a point of contact, either in payroll or HR or the owner, and request it. The last resort is to estimate your annual earnings and taxes by using the previous year’s Form W-2 and filing the IRS Form 4852. It won’t be perfect but the IRS will give you some room until you can get an official document stating your actual earnings and taxes paid.
Then there is Form 1099. You should get a Form 1099 if you worked as a contractor or other non-employee position but made more than $600 over the course of the year. A second possibility is to get a Form 1099 from a bank or other financial institution where you made interest or dividend income. All are equally important.
The biggest difference between Form W-2 and Form 1099 is that many employers will send you Form 1099 electronically and skip the snail mail cost. Your email is the first place you should look for a missing 1099. If you get lots of spam during the year you will want to check your Spam folder first since in many cases that is where it ends up.
Next, if you still come up empty, follow the same basic procedure as for Form W-2 and contact the employer. You may not exist in the payroll department records, so find out who the best person is to contact to shake out the Form 1099 from. People who regularly do contract work keep their own set of records, in which case they can use those numbers in place of the 1099 if the employer does not respond in a reasonable amount of time.
As for banks and other financial institutions, you will need to call them directly and request a (second) copy. If they fail to respond in a timely manner, you can choose to file using any of your personal records and estimate the amount you received for tax purposes. When you finally get the 1099 you can file an amended return, if necessary.
The sooner you start to get your paperwork together, the sooner you can move on to other things. Don’t make the mistake of thinking that you will be the only one searching for missing tax documents a week before the filing deadline because it can cost you in real dollars.