We in the tax business remember quite well the stressful last weeks leading up to the annual tax deadline on April 15th. We know it was tough for you too. Is there anything that you can do now to ensure that the next tax season is smooth and stress-free? Here are some simple steps that you can take now to ease the pain next year.
1. Set up and maintain a current file of all your tax-related information.
This can be as simple as keeping a file folder to catch all your tax related documents throughout the year. Keeping records together in one place avoids the need to scramble and hunt for these at the last minute. Some of the records you will be collecting during the year:
- Records of the taxes you’ve paid during the year (estimated tax payments, sales taxes, real estate taxes, personal property taxes, etc.)
- IRA contribution information
- Medical expenses
- Charitable donations
- Business use of home documentation (square footage used, utility bills, repairs and maintenance)
- Unreimbursed business expenses (auto mileage, fuel, tolls, meals, travel, supplies)
- Rental property records (rental income, taxes, insurance, utilities, cleaning, repairs)
2. Make a checklist of accounts you have established. Use the list to review year-end statements (1098-E, 1099INT, 1099-DIV, 1099-B, 1099-G, 1099-R, K-1, etc.) as they are received. Take a look at last year’s tax return to help with this activity. Accounts to include in your list:
- Checking, savings and certificates of deposit
- Brokerage accounts
- Retirement plan or social security
- Partnerships or S-corporations that you have an interest in
- Mortgage interest accounts
- Counties/taxing authorities that collected real estate or personal property taxes
Don’t forget to read your annual statements and review for accuracy!
3. Early next year, complete your CPA’s tax organizer. Most CPAs send out a tax organizer packet or document that will likely include some information from the prior year’s tax return – valuable clues to what you’ll need for the current year! Attach the statements and other information you’ve been collecting all year long and send the complete package to your CPA as early in the tax season as you can.
For general tax information or to discuss your particular situation, please call your Aronson advisor at 301.231.6200. With CPAs on staff who are experts in accounting systems, we can provide assistance with setup and management of your personal information system.