What Do I Need to Bring to My Tax Appointment?

Tax Time Clock - 2018 Tax Documents

Filing taxes can be very overwhelming. Just when you think you understand the process and are prepared, your situation changes: maybe you just got married, had a baby, or changed jobs.

For tax year 2018, even if your situation did not change, the tax forms did. Most of the major changes under the new tax reform passed in December 2017 take effect starting with taxes filed for 2018. With just a little planning, you can organize your documents and be prepared to sit down with your accountant. Keep reading for a detailed list of documents you need to bring to your tax appointment.

How to Organize Your Tax Documents

There are many ways to organize your tax documents. If you are tech savvy and prefer using the computer or apps, there are many programs and methods available that will allow you to download an annual report to give to your accountant. Also, you can just keep all your information in a spreadsheet that you can print out when it is tax time.

If you are a new client at Gudorf Tax Professionals, they provide a tax organizer to help you get started. It can be found here and will help you know what information you need to track to qualify for tax credits and deductions. If you are an existing client, contact the office to request a "proforma" tax organizer that includes your prior year information and carryover data (or download our organizer from www.gudorftaxgroup.com).

If you prefer keeping track of your tax documents in paper form, some of the simplest ways are best. Develop a checklist of documents you need and attach it to a folder or large envelope, where you can keep your tax organizer and documents throughout the year. A basic checklist of documents can be located on our website at www.gudorftaxgroup.com.

Regardless of how you organize your tax documents, keeping track of your information throughout the year will make it a lot easier than trying to organize it all at one time.

What the IRS Requires on Your Tax Forms

The IRS requires you to provide the following information on your tax forms:

Personal Information

The IRS requires the information on the person submitting the tax forms and information on the people covered under the tax forms including spouse and dependents. The information needed includes:

  • Full Legal Name;
  • Social Security Number (SSN) or Tax Identification Number (TIN);
  • Your Spouse’s Name and SSN or TIN; and
  • Name, Dates of Birth, and SSN or TIN for Each of Your Dependents.

If you do not have a Social Security number (SSN) or Tax Identification Number (TIN), you will need to submit the application for your TIN with your tax forms, if you do not qualify for a SSN. If you have any dependents, who do not have SSNs or TINs, you will need to submit separate TIN applications for them as well. Talk to your tax professional for help completing the TIN application and additional information you will need. If you have a SSN or qualify for one, you do not need a separate TIN to file your taxes.

If your tax professional is completing your taxes for the first time, it is important to bring a copy of last year’s tax return for your spouse, any dependents, and yourself. Although not required, your previous tax return will answer a lot of questions your tax professional has.

Income

The IRS requires you to report all income you earned during the tax year. One exception is if you completed contract work, for example as an independent contractor, and earned less than $600. If in doubt, it is best to bring in the documentation and discuss it with your accountant.

For your income information, the documents and forms mailed to you must be postmarked by January 31. If you are sure you have received all your documents, you can file sooner. Double and triple check! The last thing you want is to need to amend your tax return to add additional income. Or even worse, you completely forget and receive a notice from the IRS with interest and penalties for underreporting your income. You will need to bring any of the following documents you receive for your spouse, dependents, and yourself:

  • W-2 Forms from All Employers (Your accountant will review them to determine if your dependents will need to file their own, separate tax return.);
  • Investment Documents (Including: Interest Income (1099-INT or 1099-OID), Dividend Income (1099-DIV), Proceeds from the Sale of Stocks and Bonds (You may receive a 1099-B or year-end statement from your brokerage account. If you do not, you will need to keep track of this information yourself.), K-1s, and Income from Foreign Investments (You may receive a 1099-INT or 1099-DIV.);
  • SSA-1099 for Social Security Benefits Received;
  • 1099-S for the Sale of Property;
  • 1099-G for Unemployment, State or Local Tax Refunds;
  • 1099-C for Cancellation of Debt;
  • 1099-R for Distributions from IRAs and Retirement Plans;
  • 1099-MISC for Miscellaneous Income;
  • Alimony Received;
  • W-2, K-1, or 1099-MISC for Business or Farming Income (or Losses) and Capital Equipment Information;
  • Rental Property Income and Expenses and Depreciation Value/Information; and
  • All Other Types of Income Including: Hobby Income, Gambling Winnings and Losses, Jury Duty Pay, Medical Savings Account, Fantasy Football/Game Winnings and Losses, Scholarships, and Others. (Some of these may be reported on a 1099-MISC. If you do not receive a tax form, you will need to keep track of this information.)

Although it may not all be taxable, the IRS requires you to report most types of income with very few exceptions. If in doubt, it is best to review the income you received with your experienced tax professional.

Income Adjustments

The IRS allows taxpayers to adjust their income for specific types of payments they have made throughout the year. Taking advantage of income adjustments can help you decrease the amount of tax you owe or increase the amount of your refund depending on your circumstances. If you have made any of the following payments, make sure to keep your tax forms and information:

  • 1098-E for Student Loan Interest Paid;
  • 1098-T for Tuition Paid for Post-High School Education;
  • Educator’s Expenses (For example, classroom supplies purchased by teachers.);
  • Form 5498 - IRA Contributions (Most taxpayers will not receive this form until after June because the IRS does not require your IRA issuer to submit the form to the IRS until May 31. This is because many taxpayers contribute to their IRAs around the time they file their taxes. Since you probably will receive this form after you file your taxes, it is important you keep track of any IRA contributions you have made.)
  • Health Savings Account or Medical Savings Account Contributions;
  • Military Moving Expenses (Recommended to check with your tax professional first to determine if your moving expenses qualify.)
  • Self-employed Health Insurance Payments and Self-employed Pension Plans Contributions; and
  • Alimony Paid.

These are the most common income adjustments. Keeping track of these can help lower the amount of your income that is taxable.

Credits and Deductions

Credits and deductions help to further decrease the amount of tax you owe or increase your tax refund by either reducing the amount of your tax income (tax deductions) or reducing the amount of your tax liability (tax credits). Tax credits are better than tax deductions because they reduce your tax liability dollar for dollar, and some tax credits like the Earned Income Tax Credit are refundable even if you do not owe any taxes.

For example, if you owe $1,500 in taxes and receive a $1,000 tax credit, it will reduce your tax liability to $500 ($1,500 - $1,000).

In the same example above, if you receive a $1,000 tax deduction, it will reduce your taxable income by $1,000. This means if your tax rate is 10%, the tax deduction will save you $100 ($1,000 tax deduction x 10% tax rate).

The good news is they both save you money! Keeping track of the following credits and deductions will help keep more money in your pocket come tax time.

  • Medical Expenses;
  • Education Expenses;
  • Childcare Costs (You will need the name, address, and either Social Security number, tax identification number, or employment identification number (EIN) of the childcare provider.);
  • Charitable Contributions;
  • Qualified Business Expenses Including Home Office Expenses, if Applicable (You will need the square footage of your home office, home utilities, and other expenses associated with running your home office.);
  • Qualified rental expenses for Rental Properties; and
  • Adoption Expenses.

With the new tax reform, the IRS expects many more taxpayers to take the standard deduction this year because it has nearly doubled. This means many taxpayers will not need to keep track of most of this information because the standard deduction will be higher than if they take the itemized deduction. For additional information on whether or not you should take the standard or itemized deduction, read here, and schedule an appointment with an experienced tax professional to review your individual circumstances.

Payment or Refund Method

Depending on whether you owe taxes or the IRS owes you a refund will determine the additional information you need to complete your tax forms.

Payment

If you owe taxes, there are several ways you can pay. You can pay by check, money order, direct debit, or credit card. If you cannot afford to pay your taxes, it is still better that you file your taxes. The penalty for failing to file is greater than the penalty and interest for failing to pay. If you cannot afford to pay, your tax professional can help you set up an installment payment plan with the IRS. Depending on your circumstances, there may be other options available to you.

The majority of taxpayers, especially those who e-file, pay their taxes using direct debit from either their checking or savings account. The IRS allows you to chose the date the payment comes out of your account up to the last day to file taxes. If you want your tax payment withdrawn directly from your checking or savings account, you just need to provide the following information on your tax form:

  • Bank Account Number; and
  • Bank Routing Number.

It is best to bring a voided check, deposit slip, bank statement, or letter from your bank with this information. Also, before you sign your tax forms, double check and make sure this information is printed correctly on the form. If filing electronically, double check and make sure your accountant has the correct information.  

Refund

If the IRS owes you a refund either due to the overpayment of taxes or refundable credits, there are several ways you can receive your refund. The fastest and easiest way for many taxpayers is direct deposit. If you want your tax refund deposited in your checking or savings account, you just need to provide the following information on your tax form:

  • Bank Account Number; and
  • Bank Routing Number.

It is best to bring a voided check, deposit slip, bank statement, or letter from your bank with this information. Also, before you sign your tax forms, double check and make sure this information is written correctly on the form. If filing electronically, double check and make sure your accountant has the correct information. If this information is incorrect, it will delay your refund. The majority of banks will reject the electronic deposit if the name on the deposit does not match the name on the bank account. This is a very safe and fast way to receive your refund.

If you do not want your tax refund directly deposited in your bank account, the IRS will mail you a physical check. Most taxpayers choose direct deposit because it will take weeks longer to receive the check in the mail.

The Final Note

Be prepared, not overwhelmed! If you are a new client at Gudorf Tax Professionals, they provide a tax organizer to help you get started. It can be found here and will help you know what information you need to track to qualify for tax credits and deductions. If you are an existing client, contact the office to request a "proforma" tax organizer that includes your prior year information and carryover data.The tax professionals at Gudorf Tax Group will make filing your taxes easy by doing the heavy lifting for you. Do not spend hours trying to figure out your taxes on your own and wondering if you missed an important credit or deduction. Contact the tax professionals at Gudorf Tax Group today, before all the good time slots are taken.

Categories: Tax Preparation

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