Tax Tips

April 15th will be here before you know it. Getting prepared today will set you up for the most peace of mind and give you the best chance towards keeping all the money you’re entitled to for the past tax year.

This exhaustive checklist will get you prepared to meet April 15th head-on. Go get it all together today!

Individual Info

• Tax Returns for the last 3 years

• Tax ID or SSN

• Alimony Paid plus SSN of ex-spouse as well as their full name

• Spouse’s full name and SSN

Dependents or Additional Adults in Household

• Form 8332 if the custodial parent has released their right to claim dependents

• Any income from other adults living in your household

• Records of childcare with the childcare giver’s tax ID

• All the SSNs of dependents and their date of birth as well as their full name

Records and Forms from Education Costs

• Receipts from educational costs that you wish to itemize and meet qualification criteria

• Any forms such as a 1098-T from an academic organization

• Records of student loans interests like form 1098-E, awarded scholarships or fellowships

Place of Work Forms

• W-2 form if employed

• 1099-MISC, Schedules k-1 as well as records of income that are not included in the 1099s

• All expense records (receipts, bank statements, etc.)

• Information on assets used for business to depreciate

• Home office info—square footage of home used exclusively for business and percent of home utilities used exclusively for business

Work Automobile Info

• Complete log of miles driven for work outside of normal commute

• Parking and Tolls Receipts

• For itemizing all costs, you’ll need receipts for all gas, maintenance, licenses and loan or lease interests

Proof of Income on Property You Rent Out

• Records of income from renters (bank statement etc.)

• Any records on assets that can be depreciated

Retirement Records

• 1099-R for IRA, Pension or Annuity

• 1099-SSA and/or RRB-1099 for Social Security and/or Railroad Retirement Board Income

• Form 5498 for IRA contributions

• IRA basis

Investments and Savings

• 1099-INT Interests

• 1099-OID Original Issue Discount

• 1099-DIV Dividends

• 1099-B Proceeds from Broker Sale

• 1099-S Proceeds from Real Estate Sale

• Dates of acquired investments/savings interests

• Records of costs associated with investments

• Records of sold property not reflected in 1099s

Records for Miscellaneous Credits and Deductions

• Job search expenses (LinkedIn Premium payments, resume creation and printing, interview travel expenses not reimbursed by the potential employer, etc)

• Estimated taxes paid

• Qualified deductions for energy efficient home upgrades

• Employment costs for trade publications, association fees, uniforms and so on

• Last year’s tax preparation costs

• Costs incurred as a result of investments

• Miles and Travel Expenses for Charity

• Assets Donated to Charity

• Money Donated to qualified non-profits

• Auto sales tax paid

• Property taxes paid

• Amount of both state and tax income paid not including taxes withheld

• 1098 Mortgage Forms

• Non-reimbursed moving expenses

• HSA Payments, Form 5498-SA

• Teachers out of pocket expenses for grades K-12

Any Records from Disasters Federally Declared  

• Name of the City, County that the property is in or your place of work was in

• Proof of losses such as restoration costs and appraisals before and after disaster

• Insurance reimbursements

• FEMA Assistance

With only one month left in the calendar tax year, now is the time to make some strategic moves to lower your taxable income for the year.

Before there year ends, you’ll want to give yourself the gift of savings on taxes. Below is a list of common tactics to take before the year’s end. See what applies to you and act on these now before it’s too late.

Defer Income

The IRS requires you to claim income made available to you within the tax year you are filing for. So if you received a year end bonus and you have the opportunity to take possession of the bonus, you must claim it for that year regardless if you took possession of the funds or not. However, if you structure your bonus in a way that you are not paid out until the following year, you can lower your taxable income for the year you are filing.

Incur Next Year’s Expenses

If you plan on incurring expenses in the next year, go ahead and make those purchases in December so you lower your taxable income for the year prior to the year you plan on making those purchases. Capital expenses though (expenses that are for items that last over several years) will need to spread out the cost over the how many years the expense will be. For example, if you buy an insurance policy that is good for 3 years but pay for it all up front, the cost will be spread out as expenses over the 3 years—the cost divided by 3.

Make a Charitable Contribution 

Not only is giving good for the community, it’s also good for lowering your taxable income. This doesn’t have to be monetary contributions either; you can give away assets and claiming the Fair Market Value of the assets as a deduction.

Set Up a Health Savings Plan

Contributions to a health savings plan (also known as a Flexible Savings Account) can be deducted from your taxable income.

If you’ve always been an employee and are just starting out on your own, you’ve probably started to hear more about this “quarterly taxes” thing. And with good reason and it’s something you need to take seriously for sure.

Here are a few reasons why you may need to make estimated quarterly tax payments:

• Your employer doesn’t withhold taxes and you incurred a tax liability from the prior year.

• If you expect to have to pay more than five hundred dollars at tax time and you are filing as a corporation.

• If you owed taxes more taxes from the previous tax year

• If you file as a Partnership, an S-Corp, or as a sole Proprietor, and you project to owe more than a thousand dollars in taxes at the end of the year.

To file quarterly taxes, you’ll need to use form 1040-ES. The dates for filing and their related quarters are:

• Jan. 1 – March 31: Due April 15

• April 1 – May 31: Due June 16

• June 1 – August 31: Due September 15

• Sept. 1 – Dec. 31: Due January 15 the following year

In 2013, the IRS launched a new method for claiming a deduction for the work-from-home workforce. Find out if it’s right for you!

Technology has driven the sharp rise in the remote workers over the past decade. This rise has also hugely increased the amount of paperwork for all involved: the worker, the tax preparer and the IRS. Claiming the deduction for working from home means tracking expenses, keeping tons of receipts, and then doing some math to figure out just what percentage of those expenses went to the home and what went to the business.

The new method for claiming the home office tax deduction is simply this:

1. Measure the square footage of your home office.

2. Multiply it times $5.

Home Office Square Feet x $5 = Deduction

One thing to note though is that the deduction maxes out at $1,500. This may not be as financially advantageous as the other (old) method might be.

For example, if your home has a low square footage of 900 and your mortgage/rent is $2,900 and your home office space is 180 sqft, using the new more simple method would only equate to a $900 deduction. The old way would be a deduction of $6,960! The older style of deducting is more work and more paper trails, but this is a case of getting what you pay for in a way.

Now, if you have a ton of square feet and low mortgage/rent (good for you), it may make more sense to go with the simple method. The new method is also a great option for those out there that have not been tracking expenses and saving receipts.

Call us with us with any question you have about your tax situation!

If you incurred a significant amount of healthcare and dental cost costs last year, you may be eligible for a deduction when making your itemized deductions.

There are several things that you can deduct provided your healthcare costs were over at least ten percent of your yearly gross income:

• Surgeries
• Hospital Stays
• Prescriptive Eyewear
• Prescription Drugs
• Doctor Visits (including therapists and medical counsellors)
• Travel Costs (if you had to travel for a specific treatment)

Note that the above is not a complete list, you can check out Publication 502 on the IRS page. It’s also important to note that the costs are the costs you incurred and not the total costs. For example, if your insurance company paid a portion of the bill, that costs the insurance company paid are not eligible.

We’re more than happy to make sure that you qualify for claiming medical expenses. It’s always best to have tax professional like us assess your unique situation so you don’t end up missing out on deductions you’re eligible for as well as deductions you’re not eligible for.