Thursday, January 14, 2016

Preparing for the tax preparer

Here is a rather general list of the information tax preparers like to see:
On the income side:
• Forms W-2 (employee wages) and Forms W-2G (gambling winnings).
• Forms 1099 (all types: Int, Div, B, R, G, SSA, etc.).
• For those that have a sole proprietorship business filing on Schedule C, we need a well-organized and summarized schedule of income, expenses and fixed assets purchased.
• For those who have rental property on Schedule E, we need a well-organized schedule of rental income and expenses.
• If you sold or redeemed any stocks or bonds during the year, please provide a schedule of the dates purchased, cost basis, dates sold and sales proceeds of each security sold or redeemed. Oftentimes, your brokerage house will provide you with this information.
• All Schedules K-1 for pass-through investments such as S corporations, partnerships, limited liability companies, trusts, etc.
• A schedule of any other income (i.e., alimony).
• A copy of the prior year federal and state tax returns
On the expense side:
• All Forms 1098 (mortgage interest, student loan interest, tuition and related expenses).
• A schedule of real estate taxes paid.
• Copy of closing statements for any real estate purchases or refinancing.
• Schedule of medical expenses broken down by prescription drugs, doctors and dentists, medical insurance premiums, long-term health insurance premiums, insurance reimbursements, medical miles driven and any other deductible medical expense.
• A schedule of charitable contributions paid by check or cash.
• All receipts for noncash charitable contributions along with a schedule providing the date of the donation, cost and fair market value of the goods donated, and the method used for determining the fair market value.
• A schedule of any unreimbursed employee business expenses and auto usage including the type of vehicle driven, total miles driven, business miles driven, commuting miles driven and all related auto expenses (gas, insurance, repairs, lease payments, loan interest, parking, etc.).
 A schedule of any investment expenses (safe deposit box fees, IRA fees, etc.).
• A schedule of tax return preparation and tax planning fees paid.
• A schedule of any estimated income tax payments made listing payee, dates and amounts.
• A schedule of any gambling losses (only useful if you had gambling winnings).
Most importantly, for your tax return preparer, try to get the information to him or her as early in tax season as possible. There can be a great benefit for you in having your tax returns prepared early. If you are due a refund, you will receive it much faster, and if you owe money, you will have plenty of time to prepare for your April 15 payment.