What if I worked for multiple employers this year?

Gather a W-2 from every employer. If the total Social Security wages across all W-2s exceed the annual wage base, you may be eligible for a credit for excess Social Security tax withheld on your federal return.

Should I itemize or take the standard deduction?

Compare your total itemizable deductions (property taxes, mortgage interest, charitable gifts, medical expenses above 7.5% AGI) against the standard deduction ($15,750 Single, $31,500 MFJ for TY2025). Take whichever is higher. Note: NJ has no standard deduction.

What is the ANCHOR credit in NJ?

ANCHOR (Affordable New Jersey Communities for Homeowners and Renters) provides property tax relief credits for NJ residents. Eligibility is based on your filing status and income. Check the NJ Division of Taxation website for current income limits.

Can W-2 employees deduct home office expenses?

No. The Tax Cuts and Jobs Act suspended the miscellaneous itemized deduction for employee business expenses (IRC Section 67(a)) starting in 2018. This suspension is now permanent. W-2 employees cannot deduct home office costs.

W-2 Employee Tax Checklist - Documents You Need | Monaco CPA

Income Documents

All W-2 forms from every employer (verify count matches your records)
Check W-2 Box 12 codes: D=401(k), E=403(b), W=HSA, DD=health insurance
All 1099 forms: 1099-INT, 1099-DIV, 1099-B, 1099-R, 1099-G, 1099-SA, 1099-K
Prior year tax return for AGI e-file validation
IRS IP PIN if you have one

Filing Status and Dependents

Confirm filing status: Single, MFJ, MFS, HOH, or QSS
If Head of Household: documentation of qualifying person, 6+ months residency, and paying over 50% of household costs
Dependent information: name, SSN, relationship, and months lived with you

Deduction Records

Property tax bills (NJ deduction up to $15,000) or rent paid amount (18% deduction)
Mortgage interest statement (Form 1098)
Charitable donation receipts (federal only - NJ does not allow)
Medical expense records (if exceeding 7.5% of AGI for itemized; 2% of NJ gross income)
Student loan interest statement (Form 1098-E)

Credits and Other Items

Childcare expenses: provider name, address, EIN, and amount paid (for CDCC)
Education expenses: Form 1098-T, tuition receipts (for AOTC or LLC)
Estimated tax payment receipts if any were made

Education Credit Documents (If Applicable)

Form 1098-T from the educational institution
Tuition and required fee receipts
Enrollment verification (at least half-time for AOTC)
Scholarship and grant letters showing amounts received
Prior year Form 8863 (to verify AOTC has not been claimed for 4 years already)

NJ-Specific Items

Verify W-2 Box 16 (NJ state wages) - may differ from Box 1 if 401(k)/HSA excluded
Note: NJ has no standard deduction - personal exemptions only ($1,000/filer, $1,500/dependent)
Note: NJ does not allow the QBI deduction, charitable deduction, SE tax deduction, or student loan interest deduction
ANCHOR credit eligibility documentation
Note: NJ Social Security income is fully excluded

W-2 Employee Tax Checklist

Income Documents

Filing Status and Dependents

Deduction Records

Credits and Other Items

Education Credit Documents (If Applicable)

NJ-Specific Items

Frequently Asked Questions

Related Pages

Have Your Documents Ready?

W-2 Employee Tax Checklist

Income Documents

Filing Status and Dependents

Deduction Records

Credits and Other Items

Education Credit Documents (If Applicable)

NJ-Specific Items

Frequently Asked Questions

Related Pages

Have Your Documents Ready?

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