With the IRS tax filing season open since January 31st and the quickly approaching April 15th deadline, now is a good time to get your tax documents in order. In addition to your W-2, 1099-INT, 1099-DIV, and 1098 Mortgage Interest statements, what other documentation do you need to gather so you are ready to prepare your taxes?
You should have received, or will be receiving over the next few weeks, all of the forms that you will need to file your 2013 tax returns. A good place to start is to use your 2012 return as a guide to aid you in gathering the paperwork needed. If you are using a tax professional, you may have received a tax organizer that will show you the information that you had on last year’s return. Here are a few notes on most common tax documents you will need.
Income Documents
First, make sure you have received all of your income documents. If you are an owner of an S Corporation, Partnership, or LLC, your K-1s may not be available until March 15th for S Corporations and April 15th for Partnerships and LLCs. If you are self-employed, you need to categorize and keep all of your business receipts for a complete record of your income and expenses. The more organized you are, the quicker you or your preparer will be able to file your return.
Tax Deduction Documents
Childcare and Education Expenses: If you work and pay for child care for your dependents under 13 years old, you may qualify for the child and dependent care credit. Make sure you keep record of how much you paid, as well as the address and EIN for the organizations, including summer camps and after school care or programs.
Gifts to Charity: Charitable contributions also need documentation. A receipt or cancelled check is sufficient for contributions of less than $250. If $250 or more, you need to receive a contemporaneous, written acknowledgement from the qualified charity listing the value of goods donated along with the wording that “no goods or services were provided by the organization in return for the contribution,” if that is the case.
I have been asked many times by clients about volunteering your time or services. While volunteering is a wonderful way to help in the community, your time or services are not deductible as a charitable contribution. Your mileage, on the other hand, is, so keep track of those miles that you drive for charitable purposes.
Personal Information
If you are using a tax preparer, make sure to have available the social security number, full name, and date of birth of the tax filers and dependents, as some credits, deductions, and penalties are based on age.
Final Review
Once your return is finished, make sure that you look the tax return over carefully. Many people say they don’t know what they are looking at, but take a common sense approach. Make sure your income looks reasonable and double check that your deductions look correct as it is imperative to provide accurate information. While we all want to save on taxes, filing a fraudulent return is not the way. Tax returns are open to review by the IRS for 3 years after they are filed, but if deemed fraudulent, there is no statute of limitations and the IRS can audit back as far as they want.
Stephen P. Priestley is a Certified Public Accountant, owner of Stephen P. Priestley PLLC in Downtown Hickory and a Macaroni Kid contributing author.
