At the moment, you’re probably waiting for your 1098, 1099 and W-2 forms to come in the mail before you can start your tax preparations. But now’s the time to get ready for your 2011 tax return! The first place to look to get your info ready to take to your tax preparer or accountant is by reviewing your 2010 tax return. This will remind you of some general information that will allow you to get your files in order.
Get your return filed quickly and efficiently and don’t be a procrastinator, like many people out there who have not filed a tax return in three or four years! We don’t mind the extra revenue that we earn from that type of client, but it does not make their life easy with the taxman.
So don’t sit around just waiting for the mailman! Here is a list of things to do right now while you’re waiting for your 1098, 1099 and W-2 forms:
- Review your charitable contributions in your checkbook register—they won’t usually give out a receipt unless you give them more than $500*
- Search for DMV fees from the previous year
- Collate your medical expenses you had out-of-pocket over the previous year—you might have enough to take as an itemized deduction on your return
- Look for your child-care payments over the last year, even if you have pre-tax child care through your employer
- Look for other deductions you don’t get receipts for
- Find dividend, interest and other bank payments from your account records
- If you are offered a flexible-spending account from your employer, and you used it to pay for child care, gather those records
- Make a list of the banks or other financial institutions you might be getting 1098 or 1099 forms from
- Check to see if your financial institution actually will create your 1098 or 1099 for you in a form you can download directly from their website. Big banks like Bank of America and others offer this service.
- If your company uses a large payroll service like ADP or Paychex, you should be able to download your W-2 from their website, instead of waiting for your employer to send it in the mail
- If you have unreimbursed expense receipts, collect these to claim in your Schedule A tax return**
*Charitable deductions—don’t make this number up, or ask your accountant to write down the “maximum you can take without getting audited.” And don’t ask them “How much did I deduct last year?” so you can claim the same amount this year. And cash technically doesn’t count. The maximum you can claim in charitable deductions is 50 percent of your income (which is not feasible for most people!), so please take the time to compile your actual contributions. We know that people in Orange County are very generous
**If possible, always get your expenses reimbursed by your company. We stress this because if you just try to write them off at the end of the year, you are actually losing money. With company reimbursement, you are getting dollar for dollar. When you claim on your taxes, you’re only getting 35% of that money back.
And please don’t forget the little ones! If the stork brought a new dependent in 2011, please let your accountant know so they can update your tax return accordingly.
Worried you’re forgetting something? Don’t fret—the Simons Accountancy team in Anaheim Hills has your back. We’ll make sure to find every deduction that you can claim against your taxes, and make sure that your taxes get filed accurately and on time. If you have any questions, or need to plan that appointment for tax preparation, please call us now on (714) 637-4552.