Tax Prepartion – Setting Up the File Now
Now is the time of year when tax forms come in the mail. If you have not already done so, set up a tax folder to hold all of these important papers. I find it useful to keep a tax folder in my file drawer all year round so as I make contributions, the documentation goes directly into this file.
The information in this blog comes from a newsletter I received from Tarantino & Co, CPA (http://news.resourcesforclients.com/?u=nXgAnmPNPASd&issue=65). They have given me permission to use their very helpful lists.
Watch the mail for your tax forms. W-2s, 1099s, 1098s, and the new 1095-As will start arriving. If you used the new Affordable Care insurance exchange to purchase your health insurance you will receive the new 1095-A form that recaps this activity.
Collect any receipts that you will use to document deductions.
Also look for:
any other forms that disclose possible income (jury duty, unemployment, IRA distributions, etc.)
business K-1 forms
social security records
mortgage interest statements
tuition paid statements
property tax statements
medical, dental, and vision expenses
records of any asset purchases and sales
health insurance records (including Medicare and Medicaid)
charitable receipts and documentation
bank and investment statements
credit card statements
records of any out of state purchases that my require use tax
records of any estimated tax payments
home sales records
educational expenses (including student loan interest expense)
casualty and theft loss documentation
If you are not sure if something is important for tax purposes, retain the documentation. It is better to save unnecessary documentation than to later wish you had it.
While looking at your W-2s decide if now is the time to have your employer update your withholding amounts.
Coordinate your deductions. If you and someone else share a dependent, confirm you are both on the same page as to who will claim the dependent. This would include single taxpayers, divorced taxpayers, taxpayers with elderly parents/grandparents, and parents with older children.
At this point in time, just put everything you find in your tax folder. As you start to prepare your paperwork for your CPA or yourself, pull out last year’s tax form to match the items you have with what you had last year. This way you can see if you are missing something.
Now, set a date on your calendar to actually do the grunt work of adding up your contributions, adding up your mileage, and putting all paperwork in the proper order.
Jonda S. Beattie Professional Organizer