Tax returns can feel daunting, with a lot of paperwork involved. Your tax preparer is there to help you make sense of it all, but first, he or she needs all the information you can provide. It’s better to bring too much documentation than too little, and staying organized can help you to get the biggest refund.
While every taxpayer’s situation is different, here are some documents and information you should bring when you meet with your tax preparer:
Personal information
The IRS (and your tax preparer) needs to know your return is actually for you. Bring your Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) and a government-issued ID. If you have dependents, be sure to provide their SSNs and date(s) of birth too.
Previous year’s tax return
Even if your financial situation has changed over the course of the last year, your tax preparer can learn a lot by looking at last year’s return. Your income and deductions last year offer good clues for what to look for this year. If this is your first time visiting your preparer, they may also catch any errors or omissions and resolve them for you.
Wage statements
Any wages you earned last year must be reported. Your employer is legally required to provide you with a W-2 reporting wages earned in the last year by January 31. If they haven’t, be sure to ask them for that document as soon as possible. If you are an independent contractor, you may receive a 1099-MISC instead.
Additional income
You may have received additional income from secondary sources such as investments, unemployment benefits, alimony and scholarships. Bring any statements you have that report these other earnings.
Itemized deductions
There are deductions available for a wide variety of expenses, but you must provide supporting documentation. Bring any receipts or statements you having proving expenses related to medical bills, charitable donations, self-employment expenses and IRA contributions. Ask your preparer about the different types of deductions available; together you may discover even more savings.
Be aware that under the new Tax Cuts and Jobs Act, many itemized deductions have changed or been eliminated entirely, so if you itemized in past years, you might not be able to claim all the same deductions. In addition, with the standard deduction having doubled under the new rules, itemizing might not be in your best interest. Your tax preparation professional can provide you with advice for your situation.
Real estate documents
You likely qualify for even more deductions if you are a homeowner. Bring your preparer any documents related to a recent home purchase, statement of mortgage paid or home equity loan interest, and proof of property taxes paid. If you’ve made any updates to your home to improve energy efficiency, bring proof of the costs.
If you use your home as your place of business and would like to claim it as a deduction, be prepared to report the following information: square footage used for business, summary of utility expenses, office expenses, home improvement costs related to the office, cost of the property and date you began using the home as an office.
If you own a rental property, you’ll need to prepare your own statement summarizing gross income received, expenses and the rental start date and base costs.
Proof of healthcare
Some states require proof of health insurance. If you have health insurance, your provider should send you Form 1095-A. If you do not have health insurance, you may be penalized with a fine.
Preparing these documents ahead of time helps create an easy tax return experience. For more tips about preparing to meet with your tax preparer, contact us at MCG Solutions.