Simple 7 Steps for Tax Preparation 2015 (Express Tax)

Simple 7 Steps for Tax Preparation
There is still plenty of time left until the April 15 income tax filing deadline. But why wait until the last minute to get your affairs in order? By preparing now, you’ll make your and your accountant’s life a lot easier come crunch time.
In this article, we’ll give you 10 actions you can start right now to make sure that you have the right documentation and information necessary to file a timely and accurate tax return.

1. Collect Your 1099s and W-2s
Employers typically send W-2 wage information to their employees via regular mail by the end of January. At about this same time investment firms will send out 1099s as well, detailing any stock or bond sales you’ve transacted over the course of the past year.
Do yourself a favor: review these documents closely! Make sure the withholding amounts are accurate. Also make certain that the gross wages reported on the W-2 form match what you’ve earned. If for some reason there is a discrepancy, contact your human resources or payroll department as soon as possible, and make sure they re-issue you a corrected form.
Make sure to review each transaction on your 1099s carefully. Check that the proceeds reported on the document match your records. In addition, be sure to find out the cost basis of the securities you’ve sold so that when it comes time to file your return, you’ll have all of the information ready to go for when your tax returns are prepared. Incidentally, if you’ve earned any income from an international source, be sure to save bank deposit slips and/or other records that tally the income earned. Even though the employer is based outside of the United States, those wages must be reported on both your federal and state returns. In addition, income taxes may be due as well.

2. Collect Copies of Bank or Brokerage Statements
Suppose your accountant is reviewing your checkbook, and notes that in June of last year you deposited $1,000. He or she might assume that the deposit was earned income (as opposed to a gift you received from a relative). But by having your monthly statements available you’ll be able to show the accountant that indeed the transaction was a one-time gift, and shouldn’t be taxed.
Brokerage statements come in handy because they often contain data that may alert your accountant (or you) to any tax-loss carry forwards you might have from last year, as well as provide an idea about what types of gains and/or losses could be realized in the current tax year.

3. Find Social Security Information for New Additions to Your Family
Be sure to provide your accountant with the social security number of any children that you had or have adopted over the past year. Why? Because if you earn under $75,000 as a single taxpayer or under $110,000 as a married taxpayer (married filing jointly), you are eligible for a $1,000 tax credit for every dependent child that you support under the age of 17. But again, unless you provide your accountant with that information you likely won’t receive the credit.

4. Gather Work Related Receipts
If you purchased an item (such as a uniform) that you need for your job and your employer does not reimburse you for that expense, then the item is deductible. In addition, if you are self-employed,many items you use to conduct or promote your business may be deductible as well.
Deductible items for the self-employed typically include:

  • Computers
  • Desks
  • Manufacturing equipment
  • Tools
  • Advertising fees
  • Electricity
  • Gas

In short, save all receipts, regardless of whether you are an employee or a business owner. If there is a question regarding the deductibility of a given item, ask a tax professional. Again, documenting your purchases is key.

5. Gather Mortgage Receipts
While your mortgage company will provide you with a 1099 detailing the interest you’ve paid on your loan throughout the year (which is deductible), saving individual mortgage receipts also makes sense. Why? They can be used to reconcile the year-end 1099 (in other words to check its accuracy) and provide your accountant with some sense of the size of interest deductions that might be realized in the coming year. This allows for better tax planning.

6. Tally Co-Pays
Most employees have the cost of medical insurance deducted from their paychecks on a pre-tax basis. Therefore, these amounts cannot be deducted again on your tax return. However, any doctor or hospital bill that you co-paid throughout the year is deductible and should be itemized on your return. Save your receipts!

7. Locate Last Year’s Tax Return
Before completing your taxes this year, be sure that both you and your accountant review last year’s tax return. Why? The return will provide you both with a wealth of information that can be valuable to this year’s return, including:

  • Tax loss carry forward information
  • Withholding information
  • Information about how certain income may have been treated, such as capital gains or traditional income

Not surprisingly, most taxpayers neglect to go over last year’s return. But it is worth the time because very often you’ll find a carry forward or some other nugget of information that might be beneficial to this year’s return.

Article written by Glen Curtis

We offer Bookkeeping, QuickBooks and Tax Packages at affordable flat rates, no contracts, no cancellations fees.
Save Time and Money when you outsource our “Virtual” accounting services!.

 Businesses are increasingly hiring specialized service firms that perform services that they used to provide for themselves. Outsourcing saves time and frees up resources, which in turn gives your company more time to increase customer satisfaction. Growth is the underlying need for outsourcing which is driven by several factors including the ever-increasing aspect of management complexity due to competition.
Listed below are cost saving benefits by using our services. The elimination of out-of-pockets expenses are: 
 

  • Personal days off
  • Sick Days
  • Unemployment
  • Medical Premiums
  • Workers compensation and other payroll costs 
  • Office space and furniture
  • Equipment, or equipment maintenance
  •  Reduces your overall operation costs

The elimination of these expenses will increase your net profit.

Our services will help you increase your overall productivity as well as lowering overhead costs. 

 

Copyright © 2015 ETBS, LLC, All rights reserved.
Thanks for the Facebook Like! Enjoy the tutorial
Our mailing address is:

ETBS, LLC

2436 N. Federal Hwy #310

Lighthouse Point, Florida 33064

Add us to your address book

Follow Us
Categories
Free Consultation to Business Owners

Call 954-788-2870, or fill out our form below.





First Name (required)

Last Name (required)

Your Email (required)

Phone Number (required)

Subject

How Can We Help You?

Site Secured by SSL