Taxaway

TAX TIME!

Here's a guideline as to what documents to bring in, and some expenses you may be able to deduct.
Most of these items we've talked about or will talk about every year.

Click here if you want to print out a more detailed tax organizer/drop-off form.

Income documents

  • W-2
  • 1099-INT (interest) or a summary if not issued
  • 1099-DIV (investments), 1099-B (stock sales); (often in a combined statement)
  • 1099-G (unemployment/state refund info)
  • 1099-SSA (social security), 1099-R (retirement)
  • W-2G (gambling and lottery)
  • and any other incoming-reporting documents (various W and 1099 series)

Those who itemize: bring a record of these expenses:

  • Medical and Dental: (think of all your senses)
  • eye doctor, contact lenses/solution, glasses; hospitals, outpatient fees, co-pays and premiums,
    out-of-pocket expenses, prescriptions, hospital/appts travel and parking, dentists, medical equipment
  • If you have a flex-spending plan, pay for nonprescription drugs out of that.
    Starting 2011 you won't be able.
  • Expenses need to add up to more than 7.5% of your adjusted gross income to start counting.
    Starting 2013, they'll have to exceed 10%!
    • Car excise tax; estimated State tax payments
    • Homeowners:
  • year-end mortgage statement
  • real estate tax paid
    (if from escrow, will be on the statement, otherwise it's not the fiscal year billing, it's what you actually paid)
  • points paid (deductible for acquistion/improvement loans; deduct over life of loan if refinancing/other)
  • new home purchase, bring in copy of settlement sheet, prepaid real estate tax can count
    • Record of charitable donations
  • IRS requires you to keep proof of cash donations (letter from the charity/church is proof)
  • if over $500 noncash, receipts showing date and items given
    • Employee business expenses
    Job-related:
  • professional or union dues, professional journals/subscriptions, specialized work uniforms, tools
  • job search (in same profession): resumes, interview travel, job counselor/head hunter fees
  • home office for the convenience of the employer (not simply your choice), and used regularly and exclusively for business
    (need ratio of office to home, cost of utilities, condo fee, insurance, rent or mortgage interest, r/e tax and FMV/home purchase price)
  • auto expenses:
  •   travel to clients, different job locations, but not if only commuting to single work location and home
  •   actual expenses/standard rate methods require total miles, so record odometer Jan 1 and Dec 31
  •   actual expenses: ALL gas, oil, repairs, AAA, car wash, etc. for entire year (or) standard rate for business miles
  • client-related business meals and entertainment
    Finance-related:
  • tax preparation, safety deposit box, investment fees

    Note: In two areas, IRS demands stricter substantiation in addition to the receipts:
      auto expenses: a contemporaneous written record of those expenses and a travel log
      meals/entertainment: a record of date, place, and business purpose (ie, why and with whom)

    • Children:

    • New family additions: name, date of birth, social security number
    • Daycare: if different from last year, name and address, EIN (or SSN if person providing care)
    • Adoption costs
    Education:

    • Work-related or post-secondary tuition and fees, for self/spouse and dependents
    • Student loan interest
    Other income:

    • Rental property:
    • if property being newly rented, date "placed in service" (ready and available to be rented), original purchase price (bring in settlement sheet) or if being converted, FMV of property at time ready to rent
    • any structural improvements and additions, appliances, etc., which are depreciated
    • repairs, maintenance, mortgage interest, real estate tax, water and sewer, insurance, and other related expenses, etc.

    • Self-employment: (also see list for employee expenses)
    • computer purchases, stationary, advertising, office expenses, % tax prep for Schedule C, etc.
    • meals and entertainment: purpose is to meet/entertain clients and prospective clients
    • gifts: maximum deduction is $25/client, no limit to any small advertising giveaways
    • Home office: room or area regularly used, and exclusively business
    • Health insurance, if you are not eligible to be covered through your/spouse's employer plan
    • SEP-IRA, a self-employment IRA, deductible amount may be limited by Schedule C income
    Odds and Ends: Do any of these situations apply to you?

    • Teacher classroom expenses (K thru grade 12)
    • National Guard reservist: travel over 100 miles/stay overnight, deduction for travel
    • Alimony: income is taxable and paying it is deductible
    • Traditional IRA or Health Savings Account contributions
    • Moved over 50 miles for a job-related reason
    • Foreclosure: Cancellation of debt may be excluded from income
    • Energy-efficient windows/doors and insulation (maximum $200, ends 2011)
    		   














    Use this information not as a comprehensive list, but as a reminder as to what documents you may need to organize.
    Also remember every year you can check out the links on my website for more tax information.
    (I usually post it after the summer when Congress passes and the IRS interprets the new tax laws.)




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