All You Need To File Your Taxes! (Forms, Side Hustles, Interest, + more!)

All You Need To File Your Taxes!

Tax season is in full swing and I feel like I am knee-deep in all things taxes. I'm living, breathing, eating, and sleeping taxes, so I thought I would do a YouTube series on taxes! In today's video I’m going to be talking a little bit about what you need in order to start your tax return. This is the second video in a series of videos on taxes so if you haven't seen my first video I'm gonna link it here, so make sure you watch that video first then come back to this video because we're gonna use a lot of what we talked about in that first video here in this second video. Before we even get started with this video I am going to need a disclaimer.

This video is meant for entertainment purposes only, this is not tax advice, consider this general info I learned along my way. Please always consult a tax professional for your specific tax advice.

Let's get started! So I did a poll on my instagram page to figure out what kind of person we're going to use as an example for this video- so here is Mrs. Needs-to-file-her-taxes. I'm going to tell you a little bit about her and then we're going to walk through specific scenarios for her, and this could potentially apply to you or not, but you can use this as general advice for getting started with your tax return.

Mrs. Needs-to-file-her-taxes:

she is married
she has one kid
she has a traditional nine to five job
she has a side hustle
she has a mortgage
she has student loan payments

so if any of that sounds like you- I'm gonna walk through all of the forms that you need in order to file your tax return. Before we even get started you want to make sure that you have a copy of the prior year tax return available, either a hard copy or a digital copy. Mrs. Needs-to-file-her-taxes will be filing as married filing jointly with her husband, so she's going to need all of the specific information that she would for herself but also for her husband and for her child. She needs to have the following information: name, social security number, and date of birth. All of this would get filed on a 1040 form from the IRS and again (I went through all of these forms and definitions in my last video so if you need them you can find them there) From Mrs. Needs-to-file-her-taxes’ traditional nine to five job she would have already received as of January 31st a W-2, so that W-2 is really going to help inform the information that gets put onto her 1040 form. This is going to show her gross salary, it's also going to show a lot of other really helpful and important information like federal taxes paid, the state that you work in, and how much you paid to the state as well. I want to make sure that you are looking at all of this information and double checking it and cross-checking it with your paycheck stubs and anything else that was deducted in your paycheck. That could include health care and so if you did have health care deducted from your paycheck as part of an employer-sponsored program you're going to want to check box 12 and make sure that is code DD, because if you do not have that checked off you might actually get a penalty or a fee for not having health care insurance and we don't want any of that!

Mrs. Needs-to-file-her-taxes also has a side hustle so this is where she was doing maybe a side job and earning some income for other individuals. So potentially they sent her a 1099 NEC as a contractor and since it's a side hustle and she has income we're gonna go ahead and make sure that those are received from her clients. So it would be a 1099 NEC per client if you got paid more than 600 in the year 2020. You would add all of the 1099 NECs up and make sure that is included as your gross revenue on schedule-C. While you're doing that you want to make sure that you're including all of the expenses that went into your side hustle; this would include any types of materials that go into making a full product. If you are a product seller- for example if you made jewelry you want to make sure that you're including all the beads, strings and all the tools that you need, as expenses so that would lower your revenue which would in turn lower your taxable income. All of that is going to get reported on a schedule-C as you file your form 1040. I have a lot of high hopes for my fellow side hustlers who have all of their information in Quickbooks because Quickbooks is going to make this part of filing your tax return so super easy! Especially if you have been keeping up with doing your bank reconciliations and clearing out your bank feed in Quickbooks. You can go watch all of my Quickbooks tutorials and Quickbooks videos in order to get started with that if you need! But I hope that you were already done with that as of the end of December, so you could just grab those numbers and put them onto your schedule-C. Things like advertising, accounting, and marketing- make sure you include all your expenses that you used for your side hustle on to that schedule-C because that's really going to lower your taxable income. Next step for Mrs. Needs-to-file-her-taxes is the 1098 form, and this is going to be for your mortgage interest portion. Every month you pay your mortgage and a portion of that is to principal the note on your loan and then the other portion of that is to interest, so the portion that you paid towards interest is going to be reported on your form 1098. Make sure you have that and make sure that it matches your records. The next form is going to be the 1098 E for student loan interest, and this is going to be kind of a very similar thing to the mortgage interest piece of it. Regarding paying your student loans; let's say you didn't have federal student loans and you had some private loans or whatever kind of loans that you had for your college then whatever portion that you paid towards interest there's going to be a portion of that that's going to be deductible on your tax return. Make sure that your 1098 E matches your records as far as how much you paid towards interest on your student loan payments. According to the cares act from 2020, 300 in cash payments towards charitable organizations will be deducted on your tax return if you are not on itemizing. If you are taking the standard deduction then you want to make sure that you include 300 and that you have receipts to back everything up for your tax return so that you get that deduction on your tax return form 1040. Last but not least I want to make sure that Mrs. Needs-to-file-her-taxes will keep all of her tax documents in a secure location for three years to seven years. There's going to be certain stipulations in between if you can keep it for three years or if you can keep it for up to seven years, so i'm going to leave a link to an article from the irs.gov where you can actually read those stipulations for yourself to see where you fit along those lines. As a rule of thumb for myself I usually keep things for up to seven years. Now that we have all of our forms ready to go, we've double checked everything and we are ready to get started on filing our tax returns! So in the next video I’m going to actually walk you through several safe and secure ways that you can actually file your tax return. I am looking forward to showing you how to do that! Please share this video with people who you think would benefit from it! Alright friends I'll see you in the next video!

LINKS:

My FIRST video about taxes: https://youtu.be/78UxRo8_WAI

IRS Site about keeping previous tax records: https://www.irs.gov/businesses/small-...

My Quickbooks Tutorials: https://www.youtube.com/playlist?list...
Learn more on my website https://accountingbyedrina.com

My Budgeting course!: https://KnowYourBudgetCourse.com

My Instagram: https://instagram.com/edrinacalderon

My Twitter: https://twitter.com/edrinacalderon

My Facebook: https://facebook.com/accountingbyedrina

Featured