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Cheat Sheet for Your Tax Documents

Many of us grew up using or hearing of others using Cliff Notes in school. These were helpful in providing a synopsis of the assignment and helped us cover a lot of ground in a short amount of time. Let us provide you with a cheat sheet for organizing your documents.

Essentially, the two main categories that make up either a personal or business tax return are income and expenses. There are a lot of different forms that comprise these categories, but these are the two main categories in which to sort your information. When a form is received, think about which category it falls into and set it aside as such.

Income - The basic forms that report income are forms W-2 and the various types of 1099. These forms have a new deadline of January 31, 2017 so they should be received more quickly than in the past. Income from foreign accounts, alimony, court awards, gambling income, and rental income are some that may not be reported on these forms, yet are essential to report to your tax preparer, so be sure to include these amounts.

Expense - The second category is expenses or things that you spent your income on. The IRS allows some of these to be deducted from your income before calculating the total tax due. A few documents, you may receive, that report expenses are: 1098 (mortgage expenses, 1098-C charitable donation of vehicles, 1098-E student loan interest, 1098-T tuition for higher education, etc.), Real Estate tax bills, charitable receipts, and 1097-BTC (bond tax credit).

Other expenses that can be reported but sometimes do not come on an official form are union dues, IRA Contributions, job-hunting expenses, child care expenses, gambling losses, medical expenses, moving expenses, realized losses from investments, and rental expenses. Many of these are limited, so be sure to include the totals and have the receipts to back up the amount reported in the case of an audit. Some expenses require that additional information be included, like child care expenses and moving expenses, so be sure to bring the details to the meeting with your tax preparer so that they can determine if they meet the requirements.

A few other items to note – Other than income and expenses, there are other items to include with your tax information. A few of these items are listed below.

  • Did you have a new baby in 2016? Be sure to apply for their Social Security Card so that you can include the number on the tax return.

  • Did you buy and/or Sell a home or land? Keep a copy of the HUD closing statement with your 2016 tax documents.

  • Did you receive form 1095 (A, B, or C). These forms will come from your health insurance company or your employer if covered by a group plan.

  • Did you make any estimated payments? Include the amount and the date paid for both federal and state payments.

  • Did you receive jury duty pay? This is taxable income but if turned over to your employer in exchange for salary pay, you can deduct the amount of money turned over to your employer.

**A Special Note for Business/Rental Owners** - If you own a small business that does not file its own tax return, or have rental properties, it is important to include both the income and expenses from these on your personal tax return. It is best to list these separately from your personal expenses as they are stated on a special form on the tax return. We have organizers available for both businesses and rental owners to help with breaking the expenses down into categories that are listed on the tax forms.

As we mentioned previously we have organizers/checklists available to aid in the details and to help ensure that you don’t overlook any income or expenses. The generic organizer is available here for download. If you are a current client and would like your personalized organizer uploaded to your client portal, feel free to contact us at Happy Gathering!

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