What Should Be On Your Tax Preparation Checklist?
With tax season right around the corner, the last thing you want to do is wait until the last minute to prepare for your tax appointment
. Nows the time to make sure you have your
tax preparation checklist ready to meet with your accountant. Why? Because thorough preparation will enable your tax accountant to complete your tax return quickly and easily.
Many of the items on your tax preparation checklist depend upon your unique personal and business tax situation. However, there are several things youll definitely need to make the process go smoothly. Although the following tax preparation checklist is not meant to be all-inclusive, it provides many common items and documentation you will need to bring to your tax appointment.
Your Tax Preparation Checklist:
* Bring your Social Security card and drivers license. Unless youre using the same tax accountant as last year, youll need these to verify your identity.
* Dont forget to include a copy of last years state and federal tax returns on your tax preparation checklist. The information on last years returns will help your tax accountant calculate this years tax return more quickly.
* Unless youre self-employed, you will receive a Form W-2, Wage and Tax Statement, from your employer. Employers are required to send your W-2 by January 31. If you dont receive it by February, make a note on your tax preparation checklist that you need to call and remind them to send it to you before your tax appointment.
* Bring all of your 1099 forms. Your tax accountant can explain all of the different types of 1099s, but generally these forms report income other than wages and tips. They are commonly used for reporting payments you made to independent contractors.
* The mortgage interest you paid in 2010 should also be on your tax preparation checklist. This is Form 1098, and enables you to deduct your qualified mortgage interest to reduce your tax burden.
* Bring records of your educational expenses and student loan interest paid. Tuition paid for college classes can provide tax credits, as can the interest you paid on any student loans in 2010.
* Donations made to charitable organizations such as churches, the Salvation Army, and Goodwill are tax deductible, so remember to bring documentation of your contributions to your tax appointment.
* Medical, dental, and eye care expenses may also be deductible. These include doctor bills, prescriptions, and health insurance paid out-of-pocket.
* You can deduct a portion of your DMV registration fees from your income tax. Put your registration costs on your tax preparation checklist and
consult your tax accountant for more information on registration deductions.
* Do you pay or receive alimony? If you pay alimony, you may qualify for an income tax deduction. If you receive alimony, you may owe income taxes.
* Add your childcare statement to your tax preparation checklist. Up to $3,000 per child can be claimed as an expense.
* You may have taxable income when a debt is cancelled, such as debts resulting from a bankruptcy or other financial crisis. Record all cancelled debt on your tax preparation checklist, and ask your tax accountant how your cancelled debt affects your tax burden.
* If you were laid off in 2010, note that unemployment benefits and severance pay are taxable. Any vacation or sick pay received after you leave a company is also taxable.
* Put your gambling winnings and losses on your tax preparation checklist, as they are also deductible. Gambling income includes winnings from lotteries, raffles, casinos, and horse racing, as well as the fair market value of any prizes you won in 2010.
* Remember to bring a profit and loss statement for each business entity if youre self-employed. You should also bring a profit and loss statement for any rental properties when you meet with your tax accountant.
While there will likely be many more items on your tax preparation checklist, this list should get you well on your way to being ready to meet with your tax accountant. For information and to setup your tax appointment, call 562.432.6100 or visit
www.Personal-Accountant.com.by: Dion Silva
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