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 MSmartt@jps.net.