With tax season looming, it’s time to dig through that file cabinet and sort through the documents you stuffed in there last summer as you rushed out to go swimming. But who has the time to devote to such mind numbing drudgery? And to top it all off, as soon as your accountant gets your packet, they’ll be calling you for more. This never ending cycle can drive anyone insane. It’s ok – we get it. To help ease the anxiety, we’ve developed a list of easily-forgotten, yet essential items to remember when putting together that packet for your tax preparer. These items will save you money, time, and perhaps even a call from your accountant this tax season.
First and foremost: don’t forget the questionnaire on the tax organizer we send you! Those questions are easy to overlook but really are essential to update every year when filing your tax return. They cover critical information we need to know, such as dependent status, marital status, and whether your dependent filed their own tax return.
Similarly, be thorough in filling out Sch C and E on the organizer, because it really helps to speed along the preparation of your tax return. Be sure to compare last year to this year on the organizer, and double check you’re not missing any expense categories. If you no longer have an expense similar to one listed on a previous year, please make a note of it on the organizer, so we know the page is complete.
Thirdly, we always need all pages of your 1099INT, 1099DIV, or capital gains statements. Every page must be accounted for, in order to report these on the tax return. However, good news, this doesn’t apply to your business 1099MISC if already included in revenue total, so please just total those up on the organizer. No need to send the full statements to us. There is an exception to this, however, if you do not have a business and received a 1099MISC please included it in your tax packet. We do need to see those.
Another easily forgotten item is your tax payments. Please confirm when and how much you paid during the year for your extension, as well as estimated payments for both your federal and state tax. We have no way of finding that information anywhere else, but is crucial for your filing. So if you just make a note on the organizer, the whole process will be so much smoother and faster. Don’t forget any payments you made in January 2020 that apply to the 2019 tax year!
Lastly, I’ve got one more time saving tip for you. Don’t worry about sending us your medical and prescription receipts. All we need is a total on the tax organizer and we’re good to go! This is the same for any cash charitable contributions you may have made. We only need a total on the organizer for each organization you donated to and that’s it! (If you have questions about the documentation the IRS requires for charitable contributions of items other than cash you can refer to my blog post titled “Can I still receive a tax benefit for donating assets other than cash?”)
While these topics may seem simple, it would surprise you how much they can smooth out the tax preparation process. Together, let’s rock this tax season!