Remember, tax planning and preparation is a year-round task. By accurately tracking income, expenses, deductions, etc. you will be better prepared to take advantage of available credits/deductions. You will also SAVE money by having all the needed documentation available for your tax preparer; if they need to contact you numerous times requesting information, billable time increases. Some tips for preparing your information:
- Get Organized
- Set up a filing system, in either paper or electronic (scanned) format
- From prior years return you can get a good idea of what your tax preparer needs
- Employment Income
- W-2
- Self employment income & expenses
- 1099 MISC
- Banking deposits
- Receipts to verify expenses
- Deposits/Invoices
- Investment income & expenses
- 1099 INT, 1099 DIV, 1099 R
- 1099 B
- K-1 from partnerships and trusts
- Employment Income
- Homeowner Data
- Mortgage interest paid Form 1098
- Equity loan interest paid
- Real Estate taxes paid
- Property Taxes paid
- Deduction documentation
- Medical expenses
- Charitable contributions and mileage
- Unreimbursed employee expenses
- Investment expenses
- Job hunting costs
- Education related expenses
- Child care expenses
- Alimony paid
- IRA contributions
- Tax preparation fees
- Student loan interest
- Casualty and theft losses
- Gambling losses to the extent of winnings
- Payments
- Estimated tax payment verification
- Rental property
- Income from rent received
- Expenses related to rental income
- Settlement sheet if you purchased or sold investment property
Also, let your preparer know of any changes that affect your tax filing status. I recommend using a program – Quicken or QuickBooks to track expenses and income. With proper input of data, reports can be generated to make tax preparation easier.
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