Wednesday, January 10, 2007


Here are some examples of additional information needed if you had a “special tax situation” during the year:

IF YOU SOLD STOCK, BONDS OR MUTUAL FUND SHARES- The date of purchase and cost of the stock, bond or mutual fund shares sold. If shares were purchased over the years via dividend reinvestment - the amount of dividends reinvested each year. If the investment was inherited - the number of shares you inherited and the date of death of the person from whom they were inherited. If at all possible have your broker provide you with (or send directly to your tax preparer) a "profit and loss" statement for the year's trades that reconciles to the 1099B for your account.

IF YOU SOLD REAL ESTATE- The closing or settlement statements for both the purchase and sale of the property, plus the cost of capital improvements made to the property over the years.

IF YOU PURCHASED REAL ESTATE- The closing or settlement statement for the purchase of the property. For rental property - the separate amounts of the "assessed value" for land and improvements from the tax bill (or the post card you received from the municipality).

IF YOU REFINANCED A MORTGAGE- If you paid any points and, if so, the term of the new mortgage.

IF YOU ARE RECEIVING IRA DISTRIBUTIONS- The year-end statements for all IRA accounts.

IF YOU HAVE DEPENDENTS IN COLLEGE- The 1098-Ts you received, all the "Burser's Reports" for the year, and the student's status (i.e. freshman, junior) at the beginning of the year.

IF YOU RECEIVED A DISTRIBUTION FROM AN EMPLOYER PENSION PLAN- Did you roll-over the distribution to an IRA or did you just “take the money and run”.

IF YOU DONATED A CAR TO CHARITY- The paperwork you received from the charity, including the Form 1098-C, the fair market (blue book) value of the car on the date of the contribution, and the original cost and date of purchase of the car donated.

IF YOU ARE PAYING ALIMONY- The Social Security number of the person to whom you are paying the alimony, the amount paid for the year, and any other required payments (i.e. health insurance premiums, real estate expenses) that you are making on behalf of your former spouse.

IF YOU PURCHASED OR LEASED A CAR, TRUCK OR BOAT- The amount of state and local sales tax paid.

IF YOU PURCHASED A HYBRID CAR OR OTHER ITEM ELIGIBLE FOR AN ENERGY CREDIT – The cost of the item purchased and the “Manufacturer’s Certification” you received from the seller.

I tell first-time clients to provide me with copies of the past three years federal and state income tax returns. The prior year return (2005 return when preparing 2006) is an absolute must. I also review all three open returns to see if I can get any additional money back by filing an amended return.

I have always said it is better to give me too much information than too little. I tell new clients (I am not looking for any this tax season) to provide me with anything else they think will be helpful in preparing the return.


1 comment:

Peter C. Frank said...

Great list -- found it via Google. Suggestion: Link to part 1 (and if you have a part 3, link to that, too).