Most people would rather visit the dentist than the taxman, but a good accountant can do wonders for ensuring you get all the deductions for which you qualify. You can make the experience less painful by preparing in advance for your meeting. This way, your taxes are complete and files as soon as possible and you spend less time worrying about them.
Step One: Hunt and Peck
If you haven’t followed my advice on paperless filing or on organizing your finances, you’ll need a Saturday or Sunday to find all those places your receipts and bills are hiding. Dig out the shoeboxes, file folders, tubs and bins where you keep those things and go through them all. Using last year’s taxes as a guide, you can see which documents you will need. Then double check you didn’t miss anything with the following checklist:
- Any IRS or state revenue department letters
- Last year’s tax filing
- All w-2 forms
- Schedule K-1 for each partnership, S-corporation, estate and trust
- Retirement form 1099R for each pension, 401K, IRA or other retirement plan income
- All forms ( such as 1099) reporting dividends and interest received.
- Form 1099B for any security sales
- All statements from stock, bond or other investments
- Form 1099 showing self-employment income from each client, gambling winnings, prizes, rents received and other miscellaneous forms of income.
- Form 1098 for mortgage interest and real estate taxes
- Copies of paid tax bills
- Form 1098-E for each student loan to show interest paid
- Form 1098-T for college tuition payments
- Closing papers for any property sales, refinance or purchase
- Massachusetts residents need to prove they carry health insurance with form MA 1099-HC.
- Receipts from charitable contributions, including itemization of personal property donated.
- Receipts and statements proving itemized deductions
- Bank routing and account numbers for direct deposit. A copy of a voided check is best.
Make Your Appointment
One you have gathered your papers and gone over the checklist, you need to set up your appointment. Some of you have tax preparers that set your appointment and just send you a card letting you know when it will be. Otherwise, you’ll have to call right away and schedule an appointment. The tax appointment should take about one hour if you have prepared well, but be prepared for up to two hours. Mark it on your calender and set up an email reminder. Missing that appointment will only cause headaches, especially if it is near year’s end.
Some documents are often forgotten when preparing for your tax appointment. Double check you have not forgotten any of the following important documents and bits of information:
- Proof of Health Insurance Form (MA only)
- All W-2 forms, not just your full time job
- Forms 1099-INT, DIV, G or E to cover bank interest, dividends, unemployment compensation (a big one this year for many!), state tax refunds, and student loan interest paid
- All 1099-MISC forms documenting self employment income, not just the big ones
- A record of state lottery wins and losses
- Form 1098 Mortgage and Real estate tax information
- HUD-1 Settlement Statement for new home purchase or refinance
- Childcare provider’s tax ID or social security number and amount paid
- Proof of amounts paid for stocks, bonds or mutual funds sold
- Itemization of personal property donations
- Union Dues, tools, uniforms and other non-reimbursed work expenses
- Mileage log or gasoline receipts for car or truck expenses related to work or commuting
- Social security cards for dependents and dependent children
- Direct deposit information
- Your checkbook to pay any taxes owed
Other Important Tax Filing Tips
Some common tax mistakes can be costly. Here are a few tips to remember for tax filing season:
- You might qualify for the earned income tax credit even if you don't earn enough to file taxes. You might get money back from the IRS, so make sure you check into the credit requirements.
- For the growing legions of self-employed workers, it’s tempting to omit some of your income, especially for clients who do not send 1099 forms because they paid you less than $600. How bad would it be to get a late form and then end up paying penalties for undeclared income? Report all your income to save yourself the worries, headaches and hassle.
- Stupid math mistakes can be costly. Recheck your accountant’s math, since you’re the one who will end up paying penalties for errors.
- If you are one of the rare few who had a good year, don’t forget to check on the Alternative Minimum Tax before filing. Form 6251 from the IRS will help you get all the information you need on this issue.
Jessica Bosari is an Internet copywriter and blogger for various publications and her own blog. You can read more of Jessica's work here. If you have any comments or questions about SavingTools or about saving money, leave your comments in the form below or email firstname.lastname@example.org. Thanks!