So it’s tax time. While that thought might conjure up images of lots of receipts in a shoe box, you don’t want to be that person. With a little preparation, you can help make your visit to your accounting professional less expensive and more enjoyable. Here are a few tips to help you prepare.
Use your firm’s tax organizer to get, well, organized
The organizer provides a step-by-step process to help you collect the source documents your CPA will need to complete your tax return.
Double-check for missing documents or information
Don’t forget to include all required documents – such as 1099s for interest and dividends and basis to establish the purchase price of stocks sold (to determine capital gains). And remember to tell your preparer about estimated tax payments that you already made.
If you make estimated tax payments, provide your preparer any estimated taxes you paid in January – these payments don’t show up on your QuickBooks records from the prior year, but still count toward your tax return.
Other documentation to consider including:
– A mileage log that includes dates, locations driven and total commuting and personal miles for the year
– Retirement plan information, including contributions
– Health insurance premiums paid
– Mortgage interest, closing statements if you refinanced or documentation relating to any new loans made during the year
– Charitable donations
– Payroll tax returns for business tax returns
– 529 college savings plan contributions
If this is your first visit to a CPA, he or she may ask for the previous three years’ tax returns along with business documentation such as partnership agreements, incorporation or limited liability company documents.
Wait until you think you have all of the needed information before bringing it to the preparer
Try to bring all of your information at once. It becomes less efficient – and creates confusion – when you bring in items on multiple visits.
Don’t’ try to put it together in one sitting
If you follow the steps of your CPA’s tax organizer, there’s no rule that says you have to complete it all in one sitting. By breaking up the information into manageable sections, you can make this task less stressful and you’ll feel more productive as you check off the information you gathered.
Remember that your CPA can help you with tax planning, strategic planning and business referrals. Use your time with your CPA to look not only at this year’s return, but discuss your longer term goals too.
Your return will be done much more efficiently when you take a little extra time to organize.