Want to take the stress out of getting your taxes done? The best way to have a stressless tax day is to come prepared. What does your tax professional need to get the returns out without having to ask you a lot of questions and take up his or her time (and your money)? We’ll tell you what to provide, but because you’re not the tax expert, you shouldn’t be the one deciding what’s allowable as a deduction and what’s not. Your accountant will tell you what’s not allowable to more quickly and accurately complete your return. The following list is a basic reminder of what is needed to complete your tax return:
- 1099s – interest, dividends, retirement/pension, state tax refunds,unemployment, sale of securities, oil and gas interests, etc.
- K-1’s – partnerships, S corporations, LLCs, LLPs, estates, trusts, etc.
- Social Security – benefits received
- Closing statements – for all real estate deals, buys AND sells, including Refinancings (points may be deductible and property taxes are often paid at time of refinancing)
- Estimated state and federal taxes payments – amounts paid and DATES
- Social Security Numbers – and dates of birth for new dependents
- Basis of securities sold – you don’t want to pay gains on the total amount of a sale! Provide the amount you paid for the investment, along with date purchased.
- Investment account statements – with enclosures (often there are little hidden deductions in those papers!)
- Mortgage interest statement – for all mortgages. Talk to us about second-home deductibility for boats, RVs, etc! Sadly though, you may only deduct interest on 2 mortgages unless additional mortgages are related to rental properties. Also, don’t forget mortgage insurance premiums paid.
- Real estate taxes – all real estate tax is eligible for deduction
- Personal property tax – car tax (for Connecticut residents)
- Charitable contributions – remember cash (check or credit card, too) as well as noncash items, volunteer work mileage and volunteer expenses! Also provide the purchase price for items you have donated.
- Child care costs – amount, name, address and Social Security number or tax id of the provider.
- Student loan interest
- Health insurance statement – If not provided by employer
- 529 Plan contributions – may be eligible for state deduction
- Tuition statements – college, graduate school, post-high school education of any kind
- Business income and expenses – for a sole proprietor. Income received whether or not it has been reported on a 1099. Expenses include auto mileage, travel, insurance, professional fees, etc.
Of course, it’s better to speak to your tax professional before year-end to ensure you get all the deductions you are entitled to. If you didn’t get a chance to, the above list should give your accountant the tools he needs for a stress-free tax day.
Felecia Sternbach and Ellen Rose are both CPAs with over 25 years of tax, accounting, and business experience. They are knowledgeable, client-focused accountants who make sure their clients get the best possible service and attention. Their accounting practice focuses on the needs of small businesses and start-ups. They are especially passionate about helping entrepreneurs succeed and thrive in today’s very competitive and challenging business climate.
Sternbach & Rose, CPAs – Where you’re never just a number.