Taxaway

TAX TIME!

Here's a guideline as to what documents to bring in, and some expenses you may be able to deduct.
Most of these items we've talked about or will talk about every year.

Click here if you want to print out a more detailed tax organizer/drop-off form.

Income documents:

  • W-2
  • 1099-INT (interest) or a summary if not issued
  • 1099-DIV (investments), 1099-B (stock sales); (often in a combined statement)
  • 1099-G (unemployment/state refund info)
  • 1099-SSA (social security), 1099-R (retirement)
  • W-2G (gambling and lottery)
  • and any other incoming-reporting documents (various W and 1099 series)

Those who itemize: bring a record of these expenses:

  • Medical and Dental: (think of all your senses)
  • eye doctor, contact lenses/solution, glasses; hospitals, outpatient fees, co-pays and premiums,
    out-of-pocket expenses, prescriptions, hospital/appts travel and parking, dentists, medical equipment
  • Expenses need to add up to more than 10% of your adjusted gross income to start counting.
    (Remains at 7.5% AGI threshold for age 65/older until 2017.)
    • Car excise tax; estimated State tax payments
    • Homeowners:
  • Form 1098: year-end mortgage statement
  • real estate tax paid
    (if from escrow, will be on the statement, otherwise it's not the fiscal year billing, it's what you actually paid)
  • points paid (deductible for acquistion/improvement loans; deduct over life of loan if refinancing/other)
  • new home purchase, bring in copy of settlement sheet, prepaid real estate tax can count
    • Record of charitable donations
  • IRS requires you to keep proof of cash donations (cancelled checks, letter from the charity/church)
  • if single donation over $250, letter acknowledging value of gift net goods/services received, etc., (must possess this by filing time)
  • if over $500 noncash, receipts showing date and items given
    • Employee business expenses
    Job-related:
  • professional or union dues, professional journals/subscriptions, specialized work uniforms, tools
  • job search (in same profession): resumes, interview travel, job counselor/head hunter fees
  • home office for the convenience of the employer (not simply your choice), and used regularly and exclusively for business
    (ratio of office to home, utilities, condo fee or rent, insurance, FMV/home purchase price)(mortgage int and r/e tax deducted in full regardless)
  • unreimbursed costs of business use of cell phone and internet; business purchases, office supplies, etc.,
  • auto expenses:
  •   travel to clients, different job locations, but not if only commuting between single work location and home
  •   actual expenses/standard rate methods require total miles, so record odometer Jan 1 and Dec 31
  •   actual expenses: ALL gas, oil, repairs, AAA, car wash, etc. for entire year (or) standard rate for business miles
  • client-related business meals and entertainment
  • Finance-related:
  • tax preparation, safety deposit box, investment fees

    Note: In two areas, IRS demands stricter substantiation in addition to the receipts:
      auto expenses: a (contemporaneous is best) written travel log and record of expenses
      meals/entertainment: receipts indicating date, place, and business purpose (ie, why and with whom)

  • Children:

    • New family additions: name, date of birth, social security number
    • Daycare: if different from last year, name and address, EIN (or SSN if person providing care)
    • Adoption costs
    Education:

    • Work-related deduction or post-secondary tuition credit, for self/spouse and dependents
      Note: Stricter documentation now required if claiming the undergraduate credit; you must have the 1098-T, similar as if a W2!
    • Student loan interest
    Other income:

    • Rental property:
    • if property being newly rented, date "placed in service" (ready and available to be rented), original purchase price (bring in settlement sheet) or if being converted, FMV of property at time ready to rent
    • any structural improvements and additions, appliances, etc., which are depreciated
    • repairs, maintenance, mortgage interest, real estate tax, water and sewer, insurance, and other related expenses, etc.

    • Self-employment: (also see list for employee expenses)
    • computer purchases, stationary, advertising, office expenses, % tax prep for Schedule C, etc.
    • meals and entertainment: purpose is to meet/entertain clients and prospective clients
    • gifts: maximum deduction is $25/client, no limit to any small advertising giveaways
    • Home office: room or area regularly used, and exclusively business
    • Health insurance, if you are not eligible to be covered through your/spouse's employer plan
    • Self-employed retirement plans (ie, SEP-IRA/Keogh); deductible amount may be limited by Schedule C income
    Odds and Ends: Do any of these situations apply to you?
    • Teacher classroom expenses (K thru grade 12)
    • National Guard reservist: travel over 100 miles/stay overnight, deduction for travel
    • Alimony: income is taxable and paying it is deductible
    • Traditional IRA or Health Savings Account contributions
    • Moved over 50 miles for a job-related reason
    • Foreclosure: Cancellation of debt may be excluded from income





    Use this information not as a comprehensive list, but as a reminder as to what documents you may need to organize.
    Also remember every year you can check out these sections for more tax information.
    (I usually post it after the summer when Congress passes and the IRS interprets the new tax laws.)




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