If you haven’t started preparing your taxes, it’s time to get cracking. After all, Tax Day is less than a month away, on April 17, 2012. Whether you are preparing your own taxes, or whether you are getting help from an accountant, it can help to be organized. Make sure you have everything you need before you start.
Here are some things to gather together as you get ready to prepare your tax return:
- All Social Security Numbers or Taxpayer Identification Numbers for you, your spouse and your dependents.
- Information about dependent care providers for children and elderly dependents. You’ll need name, address, and Tax ID numbers.
- Social Security Numbers related to paid alimony, if applicable.
- W-2 forms
- 1099 forms (MISC, K, G, DIV, INT, R, RRB, etc.)
- K-1 schedules for partnerships, S Corporations, and trusts
- Winnings from the lottery or gambling
- Pay from jury duty
- Amount of alimony received
- Prizes, awards, and scholarships won
- Current address
- Form 1098 (mortgage interest)
- Property taxes paid
- Information on business deductions
- Information on other expenses that might lead to a tax deduction (charitable donations, health care costs, job hunting expenses, moving costs, etc.)
Backing it Up with Documentation
Once you have the information and forms that apply to your specific tax situation, you also need to be able to back it up with documentation. Even if you don’t end up sending the documentation in to the IRS with your tax return, you should still keep it in a safe place with your copy of your tax return.
Keep receipts from expenses that you plan to deduct on your taxes, and keep other documentation. Investment year-end statements can help you figure cost-basis so that you know this information related to investments. If you travel a lot for business purposes, keep an accurate and up-to-date mileage log in your vehicle so that you are prepared to justify the deduction. You can also use other documentation to prove that you are eligible for a deduction or credit. Be sure to keep all pertinent information so that if you are audited, you can make a copy of your documentation and send it in.
Better Organization for Next Year
Having all the documents you need ahead of time can help you prepare your taxes more efficiently. And, if you have an accountant or other tax professional prepare your taxes, it is much easier and faster for everyone involved if you are more organized. Make sure that you have everything you need before you begin.
If you had trouble gathering your documentation this year, consider starting out with better organization for next year. Create a file on your computer for digital tax records. Or, if you prefer, you can keep a handy file folder for your receipts. Label it as “tax receipts” and as soon as you return from paying an expense, you can add the receipt to the folder. Keep other forms together as well, filing them together as soon as they come in. That way, you will be prepared next year, and won’t have to track down everything.