Happy New Year! And happy tax season, officially.<\/p>\n
January usually sees taxpayers in a holding pattern, waiting for paperwork from employers and government agencies. Most of these forms are due to you by January 31, so you shouldn\u2019t be waiting too long.<\/p>\n
In the meantime, there are a few things you can do while you wait for your paperwork to come in that will make it easier and more efficient when it\u2019s time to file.<\/p>\n
Whether you DIY or consult a pro, you\u2019ll want to start with a review of last year\u2019s tax return. You\u2019ll need your 2024 AGI for your 2025 return\u2014plus, a quick review of last year can let you know what forms to keep an eye out for.<\/p>\n
Let\u2019s review some of the most common ones we see at Tree City Tax.<\/p>\n
Taxpayers are most familiar with Form W-2, the Wage and Tax Statement<\/strong> provided by your employer. It includes the wages you were paid during the tax year, as well as your tax withholding, benefits, and retirement contributions.<\/p>\n Non-wage income is reported on a Form 1099<\/strong>, and there are multiple types depending on what kind of income it is. With 1099 income, there is usually no tax withheld in advance, so you should make quarterly estimate payments to the IRS to avoid penalties at tax time.<\/p>\n Last year\u2019s tax return can give you a clue about which 1099s you\u2019re waiting on.<\/p>\n Bank Interest & Dividends: <\/strong>A 1099-DIV reports income from dividends, while a 1099-INT reports earnings from interest on your savings accounts or other interest-bearing accounts.<\/p>\n Debt Cancellation: <\/strong>If you settled any debts in 2025 with a creditor, the amount forgiven will be reported on a 1099-C and is considered taxable income.<\/p>\n Freelance or Gig Income: <\/strong>You may see one or more of the following 1099s if you\u2019re a freelancer or gig worker, depending on how you were paid. A 1099-NEC reports non-employee compensation from contract work, and a Form 1099-K reports payments you received through a third party processor like Stripe, PayPal, Cash App, Venmo, Zelle, or other service. Finally, a 1099-MISC covers any other income that doesn\u2019t fall into a specific category.<\/p>\n Government Benefits: <\/strong>1099-G reports government income like unemployment benefits, tax refunds, or other funds that come from government sources<\/p>\n Qualified Education Programs: <\/strong>If you are a student and received payments from a Qualified Education Program or 529 Plan, you\u2019ll receive a statement of those payments on a Form 1099-Q.<\/p>\n Retirement Distributions: <\/strong>Income from retirement accounts will be reported on a 1099-R, including pensions, annuities, or other retirement plans. If you received social security benefits, those will be reported on a SSA-1099.<\/p>\n You may also need to wait on forms that allow you to take deductions or receive credits to help offset your tax liability. These are important to wait for\u2014don\u2019t rush filing your taxes only to realize later that you were entitled to a credit! (But if you do, we can always file an amended return).<\/p>\n Health Insurance Marketplace:<\/strong> If you purchased health insurance through the marketplace, you\u2019ll receive a Form 1095-A. This form is necessary to take the premium tax credit. If you had employer-provided health coverage and did not use the marketplace at all in 2025, you won\u2019t receive this form.<\/p>\n Student Loan Interest:<\/strong> If you paid at least $600 in interest on a federal student loan in 2025, you will receive Form 1098-E, a Student Loan Interest Statement. You can take a deduction of $2,500 or however much you paid in interest, whichever is lower.<\/p>\n If you had any changes in your family in 2025, such as a marriage, divorce, death of a spouse, adoption, or birth, you\u2019ll have to update your taxes accordingly.<\/p>\n If your marital status has changed, your filing status has likely changed as well. Taxpayers who got married in 2025 can file jointly, which generally provides the most tax benefits.<\/p>\n If you divorced, you may qualify for Head of Household filing status, provided you cover more than half the costs of maintaining a home for qualifying dependents. HOH filing status provides a larger standard deduction and lower tax rates than filing single.<\/p>\n If your spouse passed away in 2025, you can file jointly this year (if you did not remarry). For the following two years, you may file as a Qualifying Surviving Spouse if you meet the requirements:<\/p>\n Congratulations on your new addition! If you gave birth or adopted a child in 2025, you may see some changes on your taxes depending on your income and available credits.<\/p>\n First, you need to be sure you have the child(ren)\u2019s social security number (SSN), adoption tax identification number (ATIN) or individual tax identification number (ITIN) for your tax forms to claim them as dependents and qualify for credits and deductions.<\/p>\n The adoption tax credit allows you to claim eligible adoption expenses for international, domestic, private, and public foster care adoptions. Eligibility for the Child Tax Credit, Child and Dependent Care Credit, and Earned Income Tax Credit depend on income thresholds. See our article about tax breaks for parents to learn more.<\/p>\n For taxpayers who run small businesses, you\u2019ll need to be prepared to complete a Schedule C with your tax return. Organize your income and expenses to make it easier when you meet with your tax preparer. We\u2019ll dive into the details of small business taxes in our next article.<\/p>\n At Tree City Tax, we help you navigate all of these forms, credits, deductions, and more\u2014and we stick around all year long to answer your questions, advise on tax savings, and serve as your liaison with the IRS.<\/p>\nForms for Deductions and Credits<\/h3>\n
Assess Changes in Family<\/h2>\n
Marriage and Divorce<\/h3>\n
Death of a Spouse<\/h3>\n
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Birth or Adoption of Children<\/h3>\n
Organize Your Business Expenses<\/h2>\n
Let Tree City Tax File for You<\/h2>\n