Here is what you need to give to your tax preparer.
* Full names, as they appear on the Social Security card, Social Security numbers and dates of birth for you, your spouse, and all dependents, the relationship of all dependents, and whether or not, and how long, they lived with you.
* 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.
* 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).
* All K-1s and all attachments and supplements 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.
* IRS Letter 6475 to report the amount of the 3rd Economic Impact Payment you received in 2021, or the amount of payment received, and IRS Letter 6419 to report any advance Child Tax Credit payments received in 2021.
* All year-end statements and information you received from brokerage and mutual fund accounts and any AVERAGE COST STATEMENTS received from a mutual fund on the sale of fund shares.
* How much of the principal of any mortgage loans represents “acquisition debt” (money borrowed to buy, build or substantially improve the residence) and how much represents “home equity debt” (money borrowed for any other purpose – such as to pay for college, pay down credit cards, or buy a car).
* A detailed listing of-
1. unreimbursed medical expenses,
2. charitable contributions,
3. rental income and expenses, and/or
4. self-employment income and expenses.
Your tax pro doesn’t need to see actual bills, receipts, or cancelled checks. For the most part I just need numbers. DO NOT give him or her a pile of medical bills and receipts and insurance statements and expect them to sort through them to determine your allowable medical deduction.
Your tax pro also does not need to see proof or acknowledgement of each of your individual cash donations. They only need a listing of your contributions. Do, however, provide any receipts, acknowledgments or listings for non-cash contributions –clothes, books, household items, furniture, etc. - to Goodwill, the Salvation Army, or your church.
Provide 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 tax pro “$1,023.50” or “$20.00 per week for 50 weeks” or “4638 miles”.
If any of the situations described on the next pages apply to you, your preparer will need additional information.
IF YOU SOLD STOCK, BONDS, OR MUTUAL FUND SHARES – The date of purchase and cost of the investment 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 the 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 provide 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 and if you rolled-over into another IRA account any of the distribution.
IF YOU RECEIVED DISTRIBUTIONS FROM A PENSION PLAN – Did you rolled-over the distribution to an IRA or you “took the money and ran”.
IF YOU ARE PAYING OR RECEIVING ALIMONY – The date of the divorce agreement, the Social Security number of your ex-spouse, the amount of alimony paid or received for the year, and any other required payments, such as health insurance premiums, real estate expenses, that you are made on behalf of your ex-spouse.
IF YOU PURCHASED A CAR, TRUCK, SUV, MOTORCYCLE, BOAT OF AIRPLANE – The amount of sales tax paid.
IF YOU REFINANCED A MORTGAGE – The Closing/Settlement Statement for the refinance, the term of the new loan, and what you did with any cash you received from 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 (slots, tables, raffles, lottery, racetrack, etc.), and any gambling log you kept.
IF YOU HAVE DEPENDENTS IN COLLEGE – All Form 1098-Ts received and all the “Bursar’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 provide the cost of room and board or if the student lived at home.
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 listed by chikd. You may be able to get statements from the provider(s).
Additional information may be needed for the state return.
Don’t give your preparer your “stuff” in installments. Wait until you receive all the necessary forms and information
If this is the first year with a new tax preparer give him or her copies of your 2020, 2019, and 2018 federal and state returns.
TTFN
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