Making Tax Season Pain-Free: Organize

Source: The Ethridge Team Times- February 2008

Filing electronically can be an effective and headache-free means of getting your return to the government on time. But it’s not foolproof, as 200,000 customers found last year after a database problem the evening of the tax deadline caused their returns to be delayed.

How can you make sure your return isn’t affected by potential technical delays? The answer is simple: File early. If you submit your return with a few weeds to spare, you ensure that any technical glitches will be worked out well before the tax deadline. If you can’t finish your return on time, make sure you file Form 4868, which gives you a six-month extension on the deadline.

W-2s

You’ll need on from each employer you worked for over the past year

1099-B

You’ll receive one from your broker or mutual fund company if you sold stocks, bonds or mutual funds during the year. In addition, you will need to know the original purchase date and purchase price for the sold stocks, bonds or mutual funds.

1099-G

You’ll be sent this form if you received a refund of state or local taxes last year.

1099-INT

Your bank will send you this form if you earned more than $10 in interest on a bank account or certificate of deposit last year, or if you cashed in saving bonds during the year.

1099-MISC

If you were self-employed and were paid $600 or more, you’ll receive a 1099-MISC form from the person or company for whom you worked.

1099-R

These are distributed to individuals receiving a pension or distribution from an IRA or retirement plan or who converted a traditional IRA to a Roth IRA or rolled over money from a 401(k) to an IRA.

Childcare records

If you paid a babysitter or daycare center, you’ll need the name, address, amount paid and Social Security Number for each provider.

Medical expense records

If your medical expenses were greater than 7.5% of your adjusted gross income and you itemize your deductions, collect all your receipts and cancelled checks to see if you qualify for a deduction.

Mortgage/ closing documents

In most cases, money spent on mortgage interests, points (sometimes called “loan origination fees”), real estate taxes and repayment penalties qualify for tax deductions. When you buy, sell or refinance a home, collect all related records and store them in a file. You might also qualify for a deduction for any premiums you paid on private mortgage insurance if you bought of refinanced your home this year.

Home improvement documents

Keep your receipts and records for home improvements. While in most cases these cannot be deducted each year, they can be used to reduce your taxable gain when you eventually sell your home. If you made energy-efficiency upgrades to your home, ask a tax professional if you qualify for an IRS Energy Credit.

*All information is general in nature, not legal advice and not warranted or guaranteed. Readers are cautioned not to rely solely on this information. Because tax law changes over time, it is imperative that you consult a professional tax advisor- such as an accountant- in you area regarding tax matters.

Proof of charitable contributions

For donations of $250 or less, gather your cancelled checks or receipts. For donations greater than $250, you’ll need a written acknowledgement from the organization to receive a deduction. As for items donated to nonprofit thrift stores, ask them to issue when you drop them off,

Receipts for non-reimbursed business expenses

Examples of such items are money spent on uniforms, travel, business-required education or dues that are not reimbursed by your employer.

Self-employment income/ expenses documentation

Gather and organize your receipts, or if you track such expenses on your computer, print out a year-end report.

Search
»

Article Tools
Print