What to Bring to Your Tax Appointment
| Published: October 14, 2010 – 2:22 pm
It may seem obvious that those envelopes marked “Important Tax Documents Enclosed” contain something you want to bring to your accountant. There are many other items, however, that may be necessary to complete your tax return, even if it doesn’t seem very complex. The following is a suggested list of documents that will help make compiling your important tax information easier.
Income:
W-2: This popular form reports wages, tips, and other compensation from your employer.
1099-INT and 1099-DIV: These forms report interest and dividend income.
1099-B: If you trade stocks or mutual funds, your brokerage firm should provide you with the proceeds from the sales on a Form 1099-B. However, this is only half of the transaction. To determine the gain or loss, you must also know the cost or other basis. Your brokerage firm should be able to provide this information to you in the form of a gain and loss report.
1099-MISC: This form reports income that you may have earned as a non-employee.
1099-G: Reports unemployment benefits or other government payments received.
1099-R: Reports distributions from pensions, annuities, retirement accounts, etc. which may or may not be taxable and/or subject to penalties.
SSA-1099: Reports social security benefits received, of which the taxable amount is figured based on a calculation using your adjusted gross income.
1099-Q: Reports distributions from qualified education programs. Also necessary is the amount spent on qualified expenses, which for this purpose include tuition, fees, books, supplies, equipment, room and board.
1099-SA: Reports distributions from a health savings account.
K-1: This form reports income or loss from partnerships, S-corporations, estates or trusts.
Business (Schedule C): A summary of business income and expenses is necessary for taxpayers who operate sole proprietorships. See http://loecpa.com/deducting-auto-expenses/ for information about auto deductions.
Rental Property (Schedule E): A summary of rental income and expenses is necessary to complete this schedule.
Real Estate Transactions: If you bought, sold, or refinanced real property during the year, the escrow company should have provided a Closing Statement, also known as a Settlement Statement or HUD-1 Statement. These transactions may have tax implications, so it is important to provide the closing statements to your tax preparer.
Other Income: Any other income received during the year is probably taxable and should be reported on your tax return, even if you did not receive a form. If you are not sure whether something is taxable, ask your tax preparer.
Above the Line Deductions:
Form 5498: This form reports IRA contributions made during the year and the account’s value at the end of the year.
1098-E: Reports student loan interest paid.
Moving Expenses: Certain moving expenses may be deductible depending on the distance and purpose of the move.
Schedule A Itemized Deductions:
Medical Expenses: These include medical, dental, vision, health and long term care insurance premiums. Over the counter items are not deductible. It is important to note that medical expenses must be significant to make an impact on an individual’s tax return, as only those expenses above 7.5% of adjusted gross income may be deducted. Self-employed individuals, however, may deduct the entire amount of their health insurance premiums as a business expense. IRS Publication 502 provides detailed information about what qualifies as a medical expense. http://www.irs.gov/publications/p502/ar02.html
Taxes Paid: Foreign, Local, or State Income taxes; Real Estate Taxes; Personal Property Taxes; State and Local Sales Taxes (particularly for large ticket items, such as vehicles or home improvement materials); and motor vehicle taxes.
Form 1098: This reports the amount of mortgage interest paid during the year, which may be taken as an itemized deduction.
Charitable Contributions: See http://loecpa.com/deducting-charitable-contributions/ for information about this topic.
Miscellaneous Deductions: Several other items may be listed as itemized deductions on the Schedule A. These include:
- Unreimbursed employee expenses, such as travel, education, required uniforms or equipment
- Union dues
- Investment expenses
- Tax preparation fees
Credits
Child Care Credit: You may be able to claim this credit depending on the age of the children and your employment status. To claim the credit, you must provide the names, addresses, and employer identification numbers or social security numbers of the providers, and the amounts paid. If the child care provider will not provide receipts, you cannot claim the credit.
First Time Homebuyer Credit: Taxpayers who have not owned a home for the last 3 years may qualify for an $8,000 credit. Taxpayers who have occupied the same home for 5 consecutive years of the last 8 may qualify for a $6,500 credit. A binding contract for the sale of the home must be entered into by April 30, 2010, and the sale closed no later than September 30, 2010. One of the following is necessary to take this credit:
- Settlement statement
- Certificate of Occupancy
- Statement that certificate of occupancy is not available, home construction documentation, and proof of occupancy, such as a utility bill
- For taxpayers who must prove five consecutive years of occupancy, mortgage interest or homeowners’ insurance records for that period.
Qualified Higher Education Expenses: Tuition and fees paid are reported to the taxpayer on a form 1098-T. There are several different education credits and deductions available. Depending on which credit the taxpayer is eligible to take, books, equipment, and materials may also qualify. Educational institutions frequently prepare these forms incorrectly, so check the amounts reported against your own record of tuition and fees paid.
Residential Energy Credit: Taxpayers may receive 30% of the cost of energy efficiency improvements to their homes as a credit, not to exceed $1,500 in 2009 and 2010 combined. The cost of materials qualifies for the credit, but installation costs do not. If you think an expenditure may be eligible for one of the energy credits, ask the retailer to provide documentation at the time of purchase.
There may be other income, deductions, or credits that apply to taxpayers with unique or unusual circumstances. This list includes the most common. If you have questions about whether certain tax provisions apply to you, do not hesitate to contact your tax professional.
