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Preparing for Tax Filings
February 2, 2010
It is that time of year again. Time to gather all your documents and throw them in a shoebox and take them to your accountant...well, not quite. In this article we will discuss different ways to help you get ready for tax time!
It is beneficial to you and your accountant if your tax documents are organized when you deliver them. It is also beneficial if the organizer that is sent to you in the mail is filled out to the best of your ability.
By filling out the organizer that was sent to you, the tax preparer can get a good sense of any activities that may have an impact on your taxes in the current year. When you go through the questions in the front of the organizer and answer "yes" or "no" to them according to your current year activity, this gives the person preparing the return a heads up to look for any new documents that you may have and also any questions that they may need to ask later.
Also, ensure that you have gathered all the tax information that has been sent to you throughout the year. This includes but is not limited to:
- W-2's given or sent to you by your employer.
- 1099's - These could include interest and dividend statements sent to you from your bank or broker. This could also include money you have received for services performed if you are an independent contractor.
- If you have sold any stock during the year, be sure to include a sheet which shows your basis in the stock and the date which you purchased it.
- K-1's for businesses in which you have an ownership interest.
- 1098 statements which show mortgage interest you have paid during the year.
- Real estate taxes paid in 2009 (these will typically be for 2008 real estate taxes).
- Statements for retirement accounts that show any contributions you have made during the year.
- Any student loan interest that has been paid and any expenses paid for higher education during the year. You may claim the expenses paid for your child if you claim them as a dependent.
- If you own your own business be sure to include any income received and expenses paid out during the year, along with a description of what they were.
- A summary of any charitable contributions, cash and non-cash, made to qualifying organizations.
A helpful hint for keeping this information organized and easily accessible is to set up a filing system for the information. This system can be customized to meet your individual needs, but a good starting place is to have separate folders for each company that sends you information. Then, when you receive the information, it can simply be placed in the folder to ensure all your information stays together.
It is also helpful to get your information in to your accountant as early as possible after receiving all your tax information. By getting your information in as early as possible it gives your accountant more time to get through your information, time to request any information that may be needed, and get any questions answered that they may have.
Organize your information by categories (income, schedule A deductions, etc). When your accountant receives your information neatly classified, they are able to get through your information more efficiently than if the information was not organized. This can benefit you by getting your tax returns done in a quicker and more efficient manner. This means you can sit back and relax on April 15th because your taxes have been done and filed already.
As always, if you have any concerns or questions please feel free to contact us.
by: Laura D. Beane
