Tax time is one of the most stressful times of the year for many people. The best way to make it as painless and easy as possible is to be prepared. That means keeping receipts, bills, and any necessary records all in one place throughout the year.
Unfortunately, many people do not find themselves in that category!
What can you do if you are among those individuals who have records scattered throughout your home or workplace?
- Start by scheduling a block of uninterrupted time (at least a few hours) to start gathering your information. Send the kids away for the day, turn off the phone, and dig in and get the job done.
- Pull out your bank statements or print them off the computer if you are ecologically minded and do not have paper statements sent to you. Your CPA may need these copies – you can check with him or her before printing. At the very least, you will want to go over each statement looking for deductions.
- Gather any utility bills that will be needed – crucial if you claim a home office.
- Gather your W-2’s, 1099’s, K-1’s, etc. Make sure to include 1099’s from banks, stockbrokers, and anywhere else.
- Look over last year’s tax return to see if you have forgotten to get anything, or if anything has changed.
- Compile a list of questions to ask your CPA or tax preparer so that you do not forget anything you want to ask.
- If you have sold stocks or property, you will need the purchase date, purchase cost, sale date, and sale price.
- When in doubt – ask! Send your tax preparer a detailed email with questions that will provide the answers of what you need to gather.
This is just some of the basic information you need to get started pulling it all together. Relax, once you do all of this your job is done. (You may want to start putting together a file for this year’s records so that you do not have to go through this all again next year!)