Don’t look at tax time as only April 15, but store and organize your documents throughout the entire year. This way, you’ll have easy access to everything when you take them to your accountant.
“These are some things you should keep on hand at all times, said Tim Cistone, CPA, of Bottom Line CPA, “so we’ve prepared a list of common items. Nothing is worse for the client than scrambling to find something, or even realizing at the last moment that you may have forgotten something; and nothing is worse for the accountant to have someone walk in with an unorganized bag of receipts. It’s a pretty common joke on television but, believe me, it’s no joking matter.”
KEEPING TRACK OF INCOME FORMS
- Social Security Numbers of all the immediate family
- Date of Birth
- Last year’s return or returns
- 1095s – Health Insurance Statement (NOTE: This one is very important because, under the current law, you can be fined if you don’t have insurance. We put it in this column, since there may be discounts that can qualify as income.)
- 1098s – Mortgage Interest and Student Loan Interest
- 1099s – Dividend Income, Interest Income, Retirement Plan Distribution, Sale of Real Estate, Capital gains, etc…
- 2439s – Undistributed Long Term Capital Gains
- Schedule K-1s – Partnership, S Corporation and Estate or Trust Income
Once you know which forms you will be using, designate a folder for this purpose and file them immediately so they aren’t lost. Most of these forms tend to come in at the end of the year, so you should receive them within weeks of each other.
KEEPING TRACK OF MONTHLY EXPENSES
This area is where you want to pay attention and not miss out on an opportunity to deduct, and failing to deduct can cost you money.
Each month take 30 minutes to file these papers in the correct folder, so it’ll be easy to find them when you need them.
Some expenses may include:
- Child and Dependent Care Expenses
- Educational Expenses
- Medical Expenses – including health insurance, hospital bills, co-pays, equipment transportation to medical facilities and medicines.
- Vehicle Taxes
- Real Estate Taxes
- Mortgage Interest Paid
- Charitable Contributions – including tithe and offerings
- Business and Employee Expenses – examples: purchase of a new phone, repair work on a computer, etc…
- Gambling Expenses
- Investment Transactions
- Retirement Contributions
- Foreign Earned Income and Taxes Paid
- Moving Expenses
THE SELF EMPLOYED
“This list varies from person to person, so it’s best to speak with your accountant first,” said Cistone.
These might include:
- Phone Service Payments
- Electricity Payments
- Water Payment
- Size of space used of the home
There’s general information your accountant will need in order to process your taxes in a timely and efficient manner.The friendly staff makes sure your order is completed in a timely and efficient manner, such as: bank Account and Routing Number for Direct Deposit/ Withdrawal and year’s Self Select PIN or Adjusted Gross Income
“Tax laws can be complex and the financial landscape is always changing,” said Cistone, “so the goal of any accountant should be to make your life more simple and successful.
Bottom line CPA offers outsourced accounting, as well as tax preparation. For additional information ot to contact, click here.