Tax Preparation Checklist
& Tax Filing Documents
Preparing Your Federal Tax Return
To make your federal tax preparation flow as smoothly and as efficiently as possible and to arrive at optimal results there are a few preliminary steps that you would need to take. Whether you will be preparing the taxes yourself manually or online, or utilizing the help of a professional tax accountant, these preliminary steps will need to be taken. And these very same preliminary steps will have to be taken whether you are preparing your federal taxes as an individual, a sole proprietor, a partnership, a C or S corporation, a limited liability company, a trust or an estate.
The preliminary steps to be taken for the federal tax preparation for the year for which
you will be filing your tax returns are as follows:
Collect your federal and state income tax returns from the previous year.
Compile a list of the names, social security numbers and birthdates of all the individuals whom you intend to claim as dependents on your tax returns. These could be your spouse, your children, your elderly parents or parents-in-law, etc.
Amass any and all W-2s and Form 1099s along with all records of any additional monetary
compensation you received during the year. If you are missing any W-2s or Form 1099s, postpone
your federal tax preparation until you get them. You might want to contact the sources of
the missing W-2s or Form 1099s and inquire about the delay.
Accumulate any and all Schedule K-1s you have received from partnerships, S corporations, estates or trusts of which your have been an investor or a beneficiary.
Gather all paperwork and documentation regarding all business income and expenses from any unincorporated business or a sole proprietorship you operated during the.
Compile all documents related all your investment properties, including stocks, bonds and real estate, you sold during the. In addition to the description of the properties sold, you need to note the original dates of purchase, the number of units that you purchased, the purchase prices, the dates you sold them, the number of units you sold, and the sales taxes you paid at the time of the purchases as well as the sales tax you collected at the time of the sales.
You need to collect details and any available documentation regarding any other sources of income such as income from rents, royalties, trusts and estates, farming, unemployment compensation, social security benefits and any other income received during the year.
Make note and collect any available documentation that would show the dates and amounts of contributions made to any Individual Retirement Accounts (IRAs), Roth IRAs, Simplified Employee Pensions (SEPs) or Keogh. Note the names of the institutions or organizations that maintain these accounts and the account numbers of each.
Note the dates and monetary amounts of any and all distributions you received from any retirement plans during the year. If documentation is available, collect it.
Take note and collect documentation regarding any and all alimony and child support you either received or paid, as well as any medical expenses for which you received no reimbursements from an insurance company or any other entity.
Note and collect documents regarding significant medical, dental or prescribed medication expenses that were not covered by your health insurance during the year.
Compile any and all documentation pertaining to any non-income taxes such as federal and state income tax, self-employment tax, real estate property tax, boat taxes and car taxes you paid during the year for which you are preparing the tax returns.
Collect Form 1098 that is provided by your mortgage interest lender. If you bought a residence or refinanced a mortgage during the year, collect the settlement sheets that reflect any interest charges and points that you paid at the time of the settlement.
If you sold and purchased any personal residence during the year, you need to compile closing and settlement statements.
Note and collect any available documents and receipts for gifts you made to any charitable organizations whether in cash or in property.
Additionally, if you used your own vehicle when making these gifts, note mileage for travel to and from. The same applies to any volunteer work you may have performed during the year.
Collect documentation of any losses you suffered due to casualty or theft as well as documents reflecting insurance reimbursements you received from such losses.
Note and collect all documents regarding work related expenses, such as entertainment, travel, education, subscriptions and uniforms, you incurred for which you were not reimbursed by your employer.
Note and collect all documentation pertaining to any additional deductible expenses such as job-related moving expenses, professional dues, student loan interest payments, tax return fees, investment fees and gambling losses.
TAX PREPARATION—FORMS AND PERSONAL RECORDS
That tax preparation is a serious issue I am sure none of us need to be reminded. We all do, however, need to be reminded every once in a while to stay focused and to get organized. We all lead very busy lives and are simultaneously pulled in multiple directions by many entities for various reasons to perform different projects. Our minds are spinning a million miles an hour with data and details. We are torn between our personal and professional lives, we are pulled by family and friends as well as colleagues, affiliates and even strangers. With so much commotion it is no wonder that some things are forgotten every once in a while.
So, I must repeat myself—we need to stay focused and get organized. The best way to accomplish organization is by taking notes, by keeping lists, by writing things down and by keeping documents in one location. Where tax preparations and all its details and intricacies are concerned, a checklist is advisable. And such a checklist will make your tax filing process easier whether you prepare your taxes yourself or you have them prepared by a tax accountant.
- Personal Data:
Write down Social Security numbers for everyone who will be included in your tax forms: your own (write it down even if you remember it by heart), your spouse’s and all your dependents such as children, elderly parents, etc.)
If applicable, write down the names, addresses and tax IDs or Social Security numbers of your children’s childcare providers.
Employment and Income: Collect all the pertinent documents and forms and keep them all in a single folder or envelope.
All the W2 forms for the year for which you are filing.
Form 1099-G for unemployment compensation.
Form 1099-MISC for miscellaneous income including rent collected.
Schedule K-1 for Partnership, S Corporation and Trust incomes.
Form 1099-R for Pensions and Annuities.
Form SSA-1099 for Social Security Benefits.
Form RRB-1099 for Railroad Retirement Benefits.
Alimony you have received.
Jury duty payments.
Gambling and lottery winnings.
Prizes and awards.
Form 1099-G for state and local income tax refunds.
Form 1099-INT and Form 1099-OID for interest income statements.
Form 1099-DIV for dividend income statements.
Form 1099-B for proceeds from stock market transactions.
Form 1099-R for retirement plan distributions.
Homeowner or Renter: List and collect all the pertinent documents and forms in a single folder or envelope.
List all residential address or addresses.
Form 1098 for mortgage interest paid.
Form 1099-S and all records related to improvements or other expenses that may be taxable or reportable for the sale of a home or other real estate.
Second mortgage interest paid.
Home equity line or loan interest paid.
Real estate tax paid.
Moving expenses if related to work.
Self-employed (SE) information: List and collect all the pertinent documents and forms in a single folder or envelope and please keep your business related items separate from your personal.
Form 1099-MISC and/or records such as copies of invoices, checks received, merchant card
processing statements, etc. for business income.
Schedule K-1 for partnership SE income.
Receipts, invoices, bank records and other documents related to your business expenses.
Receipts, invoices, bank records and other documents related to your farm expenses.
Records of payments for employment taxes and all other business taxes.
SEP IRA if your wish to contribute to your retirement.
Expenses: List and collect all the pertinent documents and forms in a single folder or envelope.
Qualified written statements or receipts from any charity to which you contributed over
$250 for each single donation.
Unreimbursed expenses related to our job such as uniforms, union dues, travel expenses and subscriptions.
Unreimbursed expenses related to volunteer work.
Job seeking expenses.
Expenses for job related continuing education.
Medical savings accounts.
Adoption and/or childcare expenses.
Alimony paid (please note the Social Security number).
Tax return preparation fees and expenses.
IRA/KEOGH/401k and other retirement plan contributions.
Documentation for medical expenses.
Records for casualty or theft loss.
Student loan interest paid.
Documentation of auto loans and leases if the car is used for business.
Early withdrawal penalties on CDs and other time deposits.
Now that we have looked at the checklist of everything that you need to prepare and provide for tax preparation, we should be taking a brief look at the various IRS tax forms that are to be used where appropriate for filing the tax returns.
Forms 1040, 1040A, 1040EZ: Used for individual taxpayers to report annual income and expenses and are the most commonly used IRS tax forms.
Schedule C: Used for self employed individuals and business owners.
1040 Tax Rate Tables: Used to calculate amount of income taxes due.
W-3: Transmittal of Wage and Tax Statements.
W-2: Used by an employers of many employees.
1041: Estate and Taxes.
Form 990: Nonprofit organizations.
Form 2441: Child and Dependent Care Expenses.
Schedule EIC: Earned Income Credit.
Schedule R: Credit for the Elderly or the Disabled.
Schedule H: Household Employment Taxes.
Form 8822: Use to notify IRS of a change of your address.
Now, that was not so bad, was it? Stay focused, get organized and your task will not be nearly as difficult as you had feared.