Looks like another six weeks of winter. Punxsutawney Phil saw his shadow, so no early Spring. So what do groundhog day and taxes have to do with each other? Unlike the characters in the Groundhog movie, you can avoid waking up each morning dreading that your taxes have not been prepared if you take steps today.
Many Americans peak out like Phil did this morning, then dive back into a hole and procrastinate about taxes. Then each morning, the tax task may loom large and spoil the sunrise. However, as soon as you have arranged to have your taxes done and begun collecting the necessary documents, you step lightly even if the temperatures have not yet thawed.
You will need your personal data, income data, self-employment data, expenses, financial liabilities and homeowner or rental data. Your personal data includes last year’s returns and all relevant social security numbers as well as other information. For employment and income data gather together W2 forms, 1099’s, interest income, dividend incomes, and state refunds just to name a few of the necessary items. For those who are self-employed, business income, schedule K-1, business expenses, business mileage and health insurance expenses are a few of the necessary documents. Expenses might include college tuition, expenses related to volunteer work, job hunting costs and others. Among the documents related to financial liabilities you might need information about auto loans or leases for vehicles used for business and student loans. Homeowner and rental information includes but is not limited to mortgage interest information, real estate taxes and moving expenses. These examples are not inclusive, so you might want to contact your CPA for a complete list of what you need customized for your situation.
By collecting all this paperwork, you will make your job easier as well as that of your preparation professional. Do something soon since it is already February and you don’t want tax preparation hanging over your head into April.
Les Merritt, CPA, prepares tax returns for individuals and companies and had done so for decades in North Carolina. He can help you reduce your bill or increase your refund by finding all your legitimate deductions. Call his offices today at (919) 269-8553 to schedule an appointment and make sure you are ready even if we have an added six months of winter weather.