A Head Start on Your Taxes !!

A Head Start on Your Taxes:
Getting organized is the key to filing an accurate tax return.
By Mary Beth Franklin, Kiplinger's Personal Finance

As you put away the holiday gifts, set aside an empty box to collect all the year-end tax documents that will soon begin arriving in your mailbox. Among the papers to look for:

Form W-2 from your employer, which shows your gross income, tax-deductible contributions to your retirement and flexible-spending accounts, and state and federal taxes withheld from your paycheck.

There's a flurry of 1099 forms from your bank, broker, pension and IRA administrators, and the Social Security Administration. These forms report taxable interest and dividends you received, plus any retirement income.

Form 1098 from your mortgage lender. It reports mortgage interest and real estate taxes you paid. If you paid college tuition or interest on a student loan, look for Form 1098-T or 1098-E.

Form 1099-G from your state if you collected unemployment during 2009. The first $2,400 of benefits received in 2009 is tax-free.

Form 1099-MISC. Independent contractors should receive one from each client who paid $600 or more in 2009. If you think you're missing a form, be sure to check your e-mail. And if you still haven't received a document by January 31, contact your financial institution or other provider.

You may already have some important documents that you'll need to prepare your taxes. For example, if you bought a new car between February 17 and December 31, 2009, check your sales receipt to see how much you paid in state and local sales tax on the vehicle; you may deduct that amount regardless of whether you itemize. And if you installed qualified energy-efficient home improvements during 2009, your sales receipt or installation contract will document your claim to a tax credit of 30% of the cost of materials, up to $1,500.

If you closed on a new home on or after November 7, 2009, you must attach a copy of your settlement sheet to your tax return to claim the home-buyer tax credit.