About this time of year, we begin to collect all the information we will need to properly file our income tax returns. Since it’s been a year, I have listed below some of the items you will want to find.
Your employer is required to send you your W2 form by Jan. 31. If it looks wrong, please contact your employer. If you can’t locate your employer, you will need to collect your pay stubs.
You will need to locate the 1099-INT and 1099-DIV forms for each account that pays interest or dividends. Even tax-exempt interest must be listed on the return. Many brokerage firms will not be sending out their 1099’s until mid or late February.
Sales of stocks, bonds or mutual funds are listed on Form 1099-B. You will need to research your original cost and purchase dates for stocks and bonds and obtain a cost basis statement for the mutual funds you sold.
If the company does not furnish you with a cost basis statement, you will need to assemble a complete history of your time in the fund, including deposits, redemptions and reinvested dividends. Your financial planner should be able to help you with this.
Form 1098 reports the interest you paid on your mortgage last year. If you refinanced last year you will want to get the Form 1098 or settlement statement showing the points you paid.
If you have a seller-financed mortgage, you will need their Social Security number in addition to name and address.
You will need to know the date and amount of estimated taxes paid.
If you sold property, you will need the settlement statement, plus a record of the improvements made to the property over time.
If you had childcare expenses, your preparer will need to know the name, address, telephone number and tax identification number of the provider in addition to the amount paid.
Student loan payments are reported on Form 1098-E and tuition is reported on Form 1098-T. Both can be used to lower your taxes.
You will want to assemble all the necessary records of your charitable contributions, everything — cash, checks and non-cash (stuff).
If your non-cash contributions total more than $500, you will need the date contributed, items donated, the receiving organization, its address, the value of the items and how you determined it. If a single gift is more than $250, you should have a receipt from the charity for it.
If you donate a car, consult your preparer for special requirements.
If you are receiving Social Security, you will need the Form 1099-SSA which lists your gross benefits before the deductions.
If you expect to receive a K-1 from a partnership, S corporation, trust or estate, you may not receive it until March or April; so you will want to wait for it before filing your final return.
If deducting business mileage, you will want to make sure your log showing dates, miles driven and business purpose is in order. This expense is a frequent audit target.
When you make a purchase of equipment, furniture or vehicle for business use, you need to list these items separately and show the date bought.
January is a good time to get started on the sometime demanding task of assembling your records.
Now is a more relaxed time to contact your tax preparer to ask questions regarding the records and documentation required to ensure you receive all the deductions to which you are entitled.