Planning Your Tax Return: A Checklist

0
Tax return checklist

Source: MSN

Tax planning and filing of returns can appear tedious but is necessary to ensure that you have claimed all the deductions and rebates you are eligible for.

Additionally, by filing accurate tax returns on time you can avoid fines, late fees, and penalties imposed by the IRS. To speed up the form filling process and ensure that it is accurate, you must ensure that you have all the relevant information before you sit down with the forms. Use a detailed checklist and cross off all the completed tasks to keep track of the work done.

General Taxable Income

The first set of papers you need to collect for filing your tax returns are those that deal with you general taxable income. These are:

  • W-2 forms for salary, wages, and tips
  • Forms 1099-INT and 1099-OID for statements about interest income
  • Form 1099-DIV for statements about dividend income
  • Form 1099-B for sales of stock, land, and so on
  • Form 1099-S for sales of real estate
  • Form 1099-G for state tax refunds
  • Form 1099-MISC for miscellaneous income received
  • Details of alimony paid or received
  • Details of unemployment compensation received

Retirement Income

If you are retired and receiving retirement income you need to collect the following papers.

  • Form 1099-R for retirement income
  • Form SSA-1099
  • Details of social security and railroad retirement income

Business Income

People who derive all or part of their income from running a business need to file income tax returns that reflect this. This requires you to collect the following papers and information. You need to collect all the relevant bills and receipts that will help you calculate the information required for this.

  • Business expenses and income
  • Rental expenses and income
  • Farm expenses and income
  • Form K-1 for income from partnerships, S-corporations, and trusts
  • Miles travelled for business purposes

Once you have collected all the information listed above and the relevant forms, you still need to ensure that you have the required information to claim deductions. The tax laws have been changed continuously over the years, so you need to ensure that you are aware of the lasts laws and how they affect you. Use the checklist provided below to ensure that you claim all the deductions you are eligible for.

As a rule, before you file your taxes, you should examine the tax laws in relation to your current situation. By calculating the taxes you will have to pay and the deductions you can claim under the various types of filing – single, married but filing separately, joint filing, head of household, and so on, you will be able to decide under which category to file to minimize your tax outgo. It is a fabulous idea to consult an accountant about your options if your situation is new. You can claim the cost of the consultation as a deduction when filing your income tax returns next year.

Tax Credits

  • Child care – name of provider, ID proof, amount paid or receipts
  • Adoption expenses – information and proof
  • Foreign taxes paid – information and proof
  • First time home buyer – proof and information

Tax Deduction for Expenses

  • Family medical expenses
  • Medical insurance payments
  • Prescription medicines and drugs receipts
  • Receipts for doctors and dentists payments
  • Receipts for hospital and nurse payments
  • Receipts for miles travelled for medical purposes
  • Form 1098 for home mortgage interest deduction
  • Receipts for interest paid on second home mortgage
  • Receipts for real estate taxes paid
  • Receipt for state taxes paid if you are itemizing the deduction instead of claiming standard deduction
  • Receipt for personal property tax
  • Receipts for contributions to charities in cash
  • Proof of fair market value of charities given in kind
  • Receipts for unreimbursed travel expenses incurred for volunteer work
  • Proof of miles travelled for volunteer work
  • Record of losses because of casualty and theft
  • Receipt for amount paid to professional tax preparer the previous year
  • Record of job related expenses that were not reimbursed
  • Record of travel miles incurred because of your job
  • Receipts for dues paid to unions and professional organizations
  • Records of expenses incurred for investment purposes
  • Records of expenses incurred when hunting for a new job
  • Record of contributions made to the IRA
  • Record of the amount paid as student loan interest
  • Receipts of expenses incurred from moving

Tax Estimate Payments

Another set of documents you need to collect before you prepare your income tax returns or approach a professional tax preparer for help relate to tax estimate payments. These documents include:

  • Estimate of payments made using ES vouchers
  • Previous year’s tax return overpayment applicable to this year
  • Proof of off highway fuel taxes paid

General Information

Apart for the specific financial and tax related information you need to complete filling your income tax returns you also need to have the following documents ready for use:

  • A copy of the previous year’s income tax return
  • Your and your spouse’s social security numbers
  • Educational expenses for both yourself and your spouse
  • Name of dependents, year of birth, and social security numbers
  • Details of the post high school educational expenses of your dependents
  • Child care expenses incurred for each dependent
  • Personal identification number for the previous year
  • Routing Transit Number
  • Bank account number

In general, you need to ensure you fill out your income tax returns accurately since you cannot revise them that easily once this form has been filed. Instead, take your time to collect all the required documents, allocate an uninterrupted time to complete the form, and revise the form again after a day to spot any errors, if any.

The Right Frame of Mind

This will help you claim all the deductions you are eligible for without any hassles. And then you can hope that the politicians of America realize that America is in need of a simpler tax system which would save billions of dollars and allow companies to hire fewer accountants and more employees that will help the firm grow. Right now, this is the system that you are plagued with and it is important you following these instructions because you do not want to compound the situation. It is stressful for everyone, not just you. We can only hope things improve in the future.

Share.

About Author

Benjamin is from Sacramento, CA. He has 2 master’s degrees and served 4 years in the U.S. Navy. He has worked at Wells Fargo Financial and has been investing in equities since 1995. He is a constant reader of finance articles and books related to business.


Few Credit Card offers from our Partners

Credit lines available from $200 to $5,000! Super Low Fixed 9.99% inter...


More Info

Receive Your Card More Quickly with New Expedited Processing Option; No...


More Info

Advertiser Disclosure

CREDIT DAD is an independent, advertising-supported website. Many debit cards, credit cards and other financial offers that appear here are from companies from which CREDIT DAD Websites receive compensation. This compensation may impact how and where products appear on this website (including, for example, the order in which they appear). CREDIT DAD Websites do not include all card offers in the marketplace.

Advertiser Disclosure

CREDIT DAD is an independent, advertising-supported website. Many debit cards, credit cards and other financial offers that appear here are from companies from which CREDIT DAD Websites receive compensation. This compensation may impact how and where products appear on this website (including, for example, the order in which they appear). CREDIT DAD Websites do not include all card offers in the marketplace.