Thursday, January 24, 2008

Getting Ready for Tax Season--Part 2

Yesterday, I blogged about getting ready for tax season by helping you decide whether to hire a CPA or do it yourself. Today, I'll provide some tips on getting yourself organized to make your work go smoothly. Of course, everyone's tax situation is different, but these are some basics to get you started. If you have specific questions, contact a tax professional or contact me for a referral.

First, gather your W-2 and 1099 forms sent to you from your employers, of course. Then, if you have any investments or bank accounts, you will need your 1099-B (for stock transactions), 1099-DIV (for stock dividend payments), 1099-INT (for interest on bank accounts and CDs), and 1099-R (for IRA distributions).

Now, you will need paperwork to support your home expenses. Remember that money spent on real estate transactions for mortgage interest, "points" or loan origination fees, and taxes are deductible in most cases. (Additionally, if you spent money on home improvements, hold on to those receipts for the future sale of your home to offset the taxable gain on the sale). Finally, if you made any upgrades to improve the energy efficiency of your home, you might be eligible for a the IRS Energy Credit.

Need more? If your medical expenses were more than 7.5% of your adjusted gross income, you might qualify for deductions. And, you can even even claim your childcare expenses if you have the right paperwork. Make sure to get the name, address, social security number and amount paid for each provider. As for charitable deductions, you will need written acknowledgement from the organization if the amount is over $250. If it is less than that, gather receipts proving the amounts (even receipts for donated items to Goodwill and other organizations like that).

There are so many more, but these are some of the basics. Make sure to prepare your return early and go over it with a fine-toothed comb! (Is it signed and dated? Are your numbers and calculations correct? Is it neat and orderly?). And, please don't hesitate to contact me if you need a referral or would like to be on my monthly mailing list for valuable information like this. I'm always happy to help. I can be reached at 510-547-5970 x57 or

Wednesday, January 23, 2008

Getting Ready for Tax Season--Part 1

Each month, I send my regular clients a selection of tips and advice on real estate, home ownership, finances and other life issues. This month, we focus on getting ready for tax season. Today in the blog, I will look at whether you should hire a CPA or do your taxes yourself and tomorrow I'll blog about some of the paperwork you will need. (And, we'll get back to real estate next week!)

Every year, many of us struggle to select the best method of preparing and filing our tax returns. It is never too soon to start thinking about the upcoming tax deadline. In fact, the sooner you make your tax preparation plans, the better organized you will be and the more likely you are to prevent any mistakes or costly accidental omissions. But, do you ever wonder if it better to do your taxes on your own or whether you should hire a tax professional?


This might be the best method if you are itemizing your deductions or you expect your tax return to be complicated. Ask you friends or families (or me!) for a referral to a great CPA. The good thing is that tax preparation fees are deductible and can usually be recouped. Now, it does take time to organize your records to make the CPA's job easier, but he or she can probably tell you what will be needed.


If your tax return will be relatively simple, this is the way to go, especially if you just have one employer and standard taxes taken out of your paycheck. Preparing them yourself can save you money in the short-term but could also reduce your return or, worse yet, increase your amount owed. Also, this method can be more time consuming, but if hassle-free is your preferred approach, going solo on your taxes should work for you.

Another option is to mix it up! You can prepare your tax return and then pay a tax professional to review it before sending it to the IRS.

Tax season comes at the same time every year, but preparing your files early makes the process easier. I’m here to help make the tax season easier than ever! If you need a referral or would like to be placed on my monthly mailing list, just let me know. I'm always happy to help. I can be reached at 510-547-5970 x57 or