WHAT TO GIVE YOUR TAX PRO

Your tax professional wants to make sure you take advantage of all the deductions and credits to which you are entitled – but he or she can only do this if you give him or her complete and accurate information.  When providing your tax information be sure to include all of the following (if it applies to your situation):

* Full names, as they appear on the Social Security card, Social Security numbers and dates of birth for you, your spouse, and all dependents, and the relationship of all dependents, whether or not, and how long, they lived with you, and if they had health insurance coverage.

* W-2 forms (all copies) and the final pay-stub for the year for all of your employers.  Make a copy of your W-2s to keep with you before sending them to me.

* All 1099s (for interest, dividends, gross proceeds, pensions, distributions from a Qualified Tuition Program, and other income), 1098s (for mortgage interest, contribution of a motor vehicle to charity, student loan interest, and tuition and fees), and K-1s and all attachments (for partnerships, sub-S corporations, estates, and trusts) from all sources.

* Any 1095-A you receive regarding health insurance premiums and advance premium tax credits for insurance purchased through the government Marketplace.  You do NOT need Forms 1095-B and 1095-C to prepare your return.

* All year-end statements and information from brokerage and mutual fund accounts and any AVERAGE COST STATEMENTS received from a mutual fund on the sale of fund shares.

* A detailed listing of-

1. unreimbursed medical expenses, including travel for travel for medical care, local property taxes and state personal property taxes paid, and cash and non-cash charitable contributions.

2. rental income and expenses,

3. self-employment income and expenses, and/or

4. federal and state estimated tax payments.

Your taxpro doesn’t need to see actual bills, receipts, or cancelled checks.  For the most part he or she will just need numbers.  Do not send him or her a pile of medical bills and receipts and insurance statements and expect them to sort through the pile to determine your allowable medical deduction.

Your taxpro also does not need to see proof or acknowledgement of each of your individual cash donations - just need a listing of your contributions.  You should, however, provide any receipts, acknowledgments or listings for non-cash contributions such as clothes, books, household items, furniture, etc. 

When I say “He or she will just need numbers” I mean specific numbers for deductions you are claiming.  “Claim the maximum” or “Whatever I am allowed” or “Same as last year” is not appropriate.  The maximum is what you actually paid – and you are allowed what you actually paid!  Tell your preparer “$1023.50” or “$20.00 per week for 50 weeks” or “4638 miles”!

If any of the following situations apply you will need to provide additional information -

IF YOU SOLD INVESTMENTS – The date of purchase and cost of all investments sold.  This information may be in the Year-End Consolidated Form 1099 Statement you received from the brokerage firm or mutual fund house.  If cost basis information for all trades is not included on this statement have your broker provide you with a “profit and loss” report for all the year’s trades that reconciles to the Form 1099B for each account.  If you sold an investment you inherited, provide the number of shares inherited and date of death of the person from whom they were inherited.  

IF YOU SOLD REAL ESTATE – The Closing/Settlement Statements for both the purchase and sale of the property, plus the cost of improvements made to the property over the years and any expenses of sale paid separate from the closing.

IF YOU PURCHASED REAL ESTATE – The Closing/Settlement Statement for the purchase of the property.  For rental property identify the separate amounts of “assessed value” for land and improvements from the tax bill.

IF YOU RECEIVED DISTRIBUTIONS FROM AN IRA – The year-end statements for all IRA accounts.

IF YOU RECEIVED DISTRIBUTIONS FROM A PENSION PLAN – Did you rolled-over the distribution to an IRA or “take the money and run”?

IF YOU ARE PAYING ALIMONY – The Social Security number of your ex-spouse, the amount of alimony paid for the year, and any other required payments, such as health insurance premiums, real estate expenses, that you are making on behalf of your ex-spouse.  This does NOT apply for any divorce decrees or agreements executed after December 31, 2018.

IF YOU PURCHASED A CAR, TRUCK, SUV, MOTORCYCLE, BOAT OF AIRPLANE – The amount of sales tax paid. 

IF YOU HAVE A MORTGAGE OR HOME EQUITY LOAN OR LINE OF CREDIT – A detailed separate analysis of “acquisition debt” (money borrowed to buy, build or substantially improve the property) and “home equity debt” (money borrowed for any other reason, and any closing costs for refinancing that was added to the loan principal) for your primary residence and any personal-use vacation residences going back to the initial purchase mortgage for each property.  For detailed information see my “Mortgage Interest Guide”.  

IF YOU REFINANCED A MORTGAGE – The Closing/Settlement Statement for the refinance and the term of the new loan. 

 

IF YOU DONATED A CAR TO CHARITY – All the paperwork you received from the charity, especially the Form 1098-C, plus the original cost and date of purchase of the car.

IF YOU HAVE GAMBLING WINNINGS – All W2-Gs, details of all your gambling losses, regardless of the “category” of gambling, and any gambling log you kept. 

IF YOU HAVE DEPENDENTS IN COLLEGE – All Form 1098-Ts received and all the “Burser’s Reports” for the year that show tuition and other payments.  You may be able to print-out a financial report from the college’s website.  Also what was spent on course-related books, supplies, and equipment.  If you have taken a distribution from a Section 529 Qualified Tuition Program include the cost of room and board.

IF YOU PAID FOR CHILD CARE, WHETHER DIRECTLY OR THROUGH A FLEXIBLE SPENDING ACCOUNT – The name, address, Social Security or Employer Identification number, and amount paid for all child-care providers.  If you have more than one child, how much you paid for each child.  You may be able to get detailed statements from the provider(s).   

IF YOU PURCHASED AN ENERGY-EFFICIENT PRODUCT FOR YOUR HOME – A description of the items you purchased, the purchase price, and any Manufacturer’s Certification you received or confirmation that the purchase qualifies. Please independently verify that your purchase qualifies for the credit.

Additional information may be needed for your state tax returns.  Ask your taxpro. 

If this is the first year with a new tax preparer be sure to also give him or her copies of your 2018, 2017, and 2016 federal and state returns.

TTFN