Tag Archive for: tax preparation

How to Impress Your Accountant with Your Tax Preparation

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organize your taxes

 

Tax documents have started to arrive and it’s time for us to organize these pieces of paper or digital information. Even though the filing deadline is still a little ways off, and even though taxes are scary, it’s better to start to get organized now.  What do you need to bring to your tax preparer to be ready to file?  There are specific documents that are required and how you organize these can impress your accountant or bookkeeper and save you money in fees.

 

Gather your documents

As paper statements arrive in the mail, be sure to place these in a Taxes 2021 folder. Organize this information in paper or digital folders as you collect the documents according to Income and Deductions.

Income

Income documents confirm the money you received during the previous year. These include:

  • W-2 forms (Statement from your employer that includes how much you were paid, deductions for medical and social security.)
  • 1099 forms (Form 1099-Misc for contract work, Form1099-INT for interest, Form 1099-DIV for dividends and Form 1099-B for broker-handled transactions.)
  • Next year income from Venmo and Square will be included.

Deductions

Documents that help reduce your taxes are known as deductions. You will need to gather the information for this documentation, which may take time. Break this into chunks to make it easier to gather this information.

  • Property taxes paid by you or your escrow account
  • Mortgage interest on Form 1098
  • Charitable donations with receipts from those entities
  • Retirement account contributions up to a set limit. Look for these forms with your January statement
  • Educational expenses which are on a form 1098-T
  • Medical bills if they total more than 7.5% of adjusted gross income for most taxpayers
  • State and local taxes and sales tax which the IRS provides tables with average amounts you can claim.

Credits are similar to deductions.  Currently the primary credit is the Child Tax Credit for each child in your family

Keep a record of the estimated taxes paid for this year. Those are quarterly payments made to adjust for additional income throughout the year. As you pay these electronically or by check, record that date and amount paid.

 

Shortcuts for tax preparation

There are shortcuts to gather this information.

  • You can also gather this information online in your investment, mortgage, and online appraisal district accounts.
  • Use one check book register each year and record the information as you write the check. Highlight in your favorite color to be sure you see these.
  • Keep all tax papers all year long in a folder marked Taxes 20XX in your command center in the office or kitchen.
  • Scan receipts to a digital folder all year long. Keep this folder on your computer.
  • Take a picture with your smart phone and create a photo album of Tax Receipts 20XX
  • Set appointments with yourself the last weekend of January, February and March to set aside time for tax preparation.
  • Ask your doctors and pharmacy for payment records for the entire year.
  • Partner with another family member as you organize your documentation. Your college and adult kids will need this preparation for their own taxes.
  • Use a tax preparation check list.

Now that you have all the data you need, use file folders for each segment of information.

  • Your information, including name, address and social security numbers
  • Income
  • Deductions
  • Credits
  • Estimated taxes

 

You are ready to go to your accountant or tax preparer with everything you need and you are guaranteed to impress!

Simplify your tax preparation

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simplify your tax preparation

 

Tax preparation can be more easily managed with a few short cuts. Two of these include finding your paperwork online and itemizing donation receipts all year long.

 

Online access to tax documents

Access your important documents online.  It makes it easier than waiting for these documents and easier to find rather than sorting through piles and piles of paper.  The key is to know what to find. The documents include 1099s for income and dividend, mortgage interest and other loans expenses paid, and property taxes paid as a deduction.  These are available at your investment company, mortgage provider and from your employer.  You can find these quickly and print these yourself.

 

Donation receipts

Throughout the year you donate your cast off goods to a variety of charities. Simplify your donation list with these donation price guides. Both guides are accepted values by the IRS for use.

According to the IRS documentation, “you may deduct charitable contributions of money or property made to qualified organizations if you itemize your deductions.”  Itemizing is including a list of the items you donated, as well as their value. The value must be “good” to be an acceptable donation. Qualified items include clothes, household goods, furniture and miscellaneous.

 

Salvation Army

https://satruck.org/Home/DonationValueGuide

 

its deductible

 

https://itsdeductibleonline.intuit.com/

 

 

Keep your lists all year long with the donation receipt in your Taxes 20XX year in your files or in your command center.  It is an easy way to break your tax preparation into chunks and make it simpler to be ready to file your taxes.

Get a checklist

Get organized with a checklist. It is the list of what you need and how to find it.

  • This list is available online from H&R Block.
  • This list is available online with a video from Turbotax. 
  • Many tax accountants provide this with your preparation.

A check list makes sure you have all the documents when you file.

 

Tax season fills us all with a sense of “just one more big thing to do.” Get your taxes ready and filed more easily with small, manageable chunks.

 

 

Learn more about making tax preparation easy here!

Learn more on YouTube about your paper processes!

 

Organizing Tax Receipts and Papers

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scanning tax receipts

 

It’s that time of year when tax papers flood in. It’s the last task we want to do! But it’s much easier if we are organized. Tax papers arrive throughout January, February and March depending on IRS requirements. Many expenses occur all year that are tax expenses and deductions. If you have struggled with organizing your tax receipts and keeping up with tax documents, here are two options for you.

Paper Organizing

Many people have a designated location that holds their tax documents. It can be an actual drawer, a file in their cabinet, or a box once the year is over. Throughout the year, various tax documents arrive and are stashed in this spot. It’s a habit cultivated over the years. It serves you well as you always know where your papers are. Once the files are accumulated, organize them into categories and total them, possibly with an excel spreadsheet so that you know general total.

 

Digital organizing

It’s the 21st century and scanning your tax papers is the way to go. Not only can you scan tax documents in all year, you can track and categorize them. You can share these files with your accountant by sharing access to Dropbox where your tax files can be located. Tax information is easily accessible when you need it. There are lots of choices for scanning, including your ipad, multi-function printer, Neat Desk or Fujitsu SnapScan.  Keeping your papers digitally means you will never lose them.

Tax time can be less stressful knowing where all the documents you need are. Get started organizing tax receipts today to make this year much easier.

Simple Steps for Taxes Preparation

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Tax preparation tips

 

Its that time of year again for tax preparation. This can be very overwhelming and very stressful! Here are a few tips and resources to get you through.

  • Start with baby steps and early March is the best time to start.
  • Set up sessions for yourself for one or two hours at a time so you can work efficiently.
  • Write your sessions in your calendar and have a deadline well before April 15.

 

 

Not sure what to gather? Everyone has different items to gather, but generally these items are the following.

  • Income includes your W-2 and 1099’s.  These come in envelopes marked Important Tax Document and will be easy to find in your mail.  Or these can be found online from your employer or in investment accounts.  You may have already set up ways to find these documents easily online!
  • Expense/Deductions include home mortgage interest (From 1098), property taxes paid to your school district and county, and charitable contributions.  Property taxes may be escrowed in your mortgage, and you can find these payments listed on your monthly December mortgage statement.  Charitable contributions can be found in reviewing your checking account online.  Non-cash charitable contributions can be valued with ItsDeductible.com online too.

 

 

File online for the quickest return.   Keep your filed return forever, either on paper or electronically. Ask your accountant how long to keep the preparation documents.  There is differing advice on this but most say at least 3 years.  Get ahead for next year by setting up folders to use throughout the year for income and deductions.

 

 

Resources

You and Your Federal Return

http://www.irs.gov/publications/p17/index.html

Smead Tax Organizer

http://www.smead.com/Director.asp?NodeId=1445

AARP Top 10 Filing Tips

http://www.aarp.org/money/taxes/info-01-2011/irs-ten-tax-time-tips.2.html

AARP Tax filing assistance

http://www.aarp.org/money/taxes/aarp_taxaide/

Maximizing your medical deductions

http://www.bankrate.com/finance/money-guides/maximizing-your-medical-deductions-1.aspx

Last minute tax time tips

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last minute tax preparation

 

If you are paralyzed about tax time, here are a few ways to get started and unstuck.

Items you can get off the internet if you don’t have the papers you need.

  • Use your year end credit card statements.   These are already categorized for taxes.
  • Go online to your mortgage company and download your mortgage expenses and property tax for your 1098.  Property taxes  and mortgage expenses are the biggest deductions in Texas.
  • Use your online pay stubs to find the taxes you paid on your final paycheck for 2010.
  • Visit your online banking and print statements out needed for income and expenses.

If you have papers, but are overwhelmed and not sure where to start.

  • Go through your papers and mail to find all the 1099s, 1098s and any other envelope marked important tax document on the outside of the envelope.
  • Spend one hour sorting income and expenses.  Spend 30 minutes sorting income into interest and dividends and then stocks for capital gains.  Spend another 30 minutes sorting medical into doctors/dentists, labs, eyeglasses, out of pocket and deductibles.    Spent another 30 minutes sorting charitable deductions.  Spend another 30 minutes using  ItsDeductibleonline.com to tabulate your charity non cash donations. Finalize with 30 minutes of wrap up.
  • Group your credit card and other receipts by categories for your small business, such as advertising, meals (with the name of who you worked with and the work you did written on the receipt), office supplies, mileage and educational expenses.

The hardest thing about taxes is getting started! Just do it, jump on it, get help with a professional or tax software, and you will be very glad you did!