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STEP 1 - Gather Financial Records
It’s so much easier, and definitely reduces stress, if your financial documents are all together and ready to go. Here’s what’s needed:
- Gather all official tax forms (such as W-2s, 1098s, 1099s) from brokerages/investments, education, mortgage interest and don’t forget your 1095-A form if your insurance is from the Healthcare Marketplace. Remember, many tax forms are now only available online so you might need to log into your various accounts and download them. Some can even be imported directly into the TurboTax software.
- Collect your receipts for childcare costs, charitable donations and out-of-pocket medical costs. Even if some of these expenses can’t be deducted on the federal (IRS) side, many states allow deductions.
- Remember the little things such as bank interest and that little side gig you did. And it’s not a bad idea to peek at your bank statements (or that online store you frequent) to see if any of those expenses are deductible.
- For any business or side gig where you don't receive a W-2, be sure to gather your Profit & Loss (P&L) statement (or a record of all income and business expenses), along with your business mileage log.
PRO TIP: Make your own customized checklist of what you need and keep it for next year. Also make note of any life changes such as moves, marital status, dependent status, job changes, home or investment sales/purchases.
STEP 2 - Sort by Income & Expenses
Start by sorting your income by the form and type of income. It’s easiest to enter those forms in tax software first. For example all W-2s go together and maybe a stack for 1099-Bs, 1099-INTs, and 1099-DIV forms. Any income that doesn’t have a form number should be separated by the type of income it is and if it’s taxable. For example if you were paid for services you provided but didn't receive a W-2 as an “employee”, that’s taxable self-employment. If you were given a gift from a family member, that’s not taxable to you…but winning a prize is taxable.
Next, work on receipts and expenses and sort by type. For example out-of pocket copays for medical, dental, or vision in one group. Charitable donations should be separated by cash or property donated. Anything business-related (if you have a business) should be separated and categorized as well.
If you’re in doubt whether it should be included in your tax return, simply set it aside until your taxes are completed. Don’t worry! The TurboTax software is very thorough and will take you step-by-step so you don’t miss a thing! Then make a note for next year if it’s needed or not. Add it to your customized checklist that you create (see above).
If you start implementing the Pro Tip below, you can skip this step next year! Congrats!
PRO TIP: Organize as you go throughout the year. Keep physical receipts that are tax deductible in labeled file folders or scan and organize on your computer. Also, it’s a good idea to set up folders (or tags) in your email to categorize and immediately move emailed receipts into those folders. Even if you simply have one email folder that says “2026 Receipts” (or similar), it separates them out of regular email. And you can create one for each year!
STEP 3 - Prepare, File & Monitor
Follow the easy interview in TurboTax (make sure to read the Learn more and other helpful info). Start with federal and do your state afterwards. Do a final review and check for errors. Then file and monitor to make sure your tax filings were Accepted for Processing.
Enjoy your refund!
Done! (until next year)