Date: 02/05/05
Subject: Business / Financial News / Personal Finance / Consumer Interest
Media Contact: Larry Scheider / CLS Tax & Financial Planning, Inc.
(formerly dba AFTS / Associated Financial & Tax Services, Inc.)
480-839-0033 cell: 480-993-4679
Don’t put off getting those tax records together! Here are some helpful hints to make
gathering your tax information less hectic.
By Larry Scheider, CFP, (R) EA
President of CLS Tax & Financial Planning, Inc.
(formerly dba AFTS)
With the beginning of the new year, take some time now to begin pulling last year’s files together for your 2007 tax return. It’s one of those inevitable, annual, and usually unpleasant, tasks; so don’t make it worse by putting it off until the last minute! You can at least make tax time easier on yourself with a little bit of advance preparation. If you start compiling your information right away, it will be much less difficult when you do visit with your tax preparer.
Check your records. Think back over the past year. Review your checkbook carefully for both income and deductions. Make lists now of any missing items or questions you may have.
Read your W-2s carefully. Make sure they’re correct. Contact your employer if there’s a problem, or if one is missing after January.
Don’t forget those 1099s. You should have a 1099-INT or 1099-DIV for every account that pays interest or dividends. Even tax-exempt interest must be listed on your return. Other 1099s might include a 1099-S if you sold real estate, or a 1099-B if you sold stock. Your pensions will show up on a 1099-R. If you sell or transfer mutual funds or reinvest dividends, you’ll need a complete history of your activity. Bring all year-end statements, too.
Do you need a Form 1098? The 1098 is for mortgage interest from commercial lenders. (If you have a private loan, you’ll need your payment book or a statement from the lender to verify the amount).
Did you have other income? Be sure to look for other reports of income, such as state tax refunds, unemployment income, prizes, gambling wins, or any rent you collect.
Should you send 1099 forms? If you paid $600 or more to anyone for business/ rental services, you will need to report the total amount on Form 1099. Or if you were a “nominee,” i.e., named as receiving income, but a part of that income belongs to another individual (even as little as $10), you may need to file a Form 1099. Your tax preparer can help you with these forms, but don’t put it off.
What are you forgetting? Check your list against these frequently missed items:
Refinances (you’ll need a settlement statement or all the paperwork).
Estimated Tax Payments (dates and amounts for all payments).
Sale of Property (bring the settlement statement and all the paperwork).
Sales of Stock (you’ll need the “buy” slip to show the original purchase price and date). Brokers send Form 1099-B to show the sale price.
Business Records (be sure to separate purchases of major equipment from other supplies).
Contributions (be sure you have the proper receipts). They won’t be attached, but you must keep them.
Employer Reimbursements. If an employer reimburses any of your expenses, you can only claim the excess.
Partnership Information. You’ll need a Schedule K-1 from any partnerships.
Social Security Benefits. Be sure you have the actual Form 1099-SSA. You must declare the gross amount you were paid, not your monthly net benefit.
Remember, a little extra effort and planning now can save a lot of hassle later, so resolve to be well prepared this year, before you meet with your tax preparer!
Selecting the right tax professional will save you time, headaches, and oftentimes money. Larry and Cathy Scheider are Solera residents with more than twenty-five years of combined professional tax preparation expertise. They will be happy to answer your questions about this article or other individual or business tax concerns. You can reach them at 480-839-0033 or email: CathyCLSTaxServices.com
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