Who comes first?

When you file your tax return with your spouse, you should always put the same person first in order to avoid any problems in subsequent tax years.  You may receive a failure to file notice from Uncle Sam. Be careful to check your social security number and that it matches your card.

There have been cases where a return has been filed electronically and the taxpayer discovers that someone else has filed already. This happens when they fail to review the social security number before hitting send. The really sad part is the person who made the mistake in the first place doesn’t realize they haven’t yet filed.

Be sure to notify the IRS if your address changes too so they can forward any correspondence regarding your filings.

Nonresident or resident aliens would use their ITIN (individual tax identification number) to file their tax returns wherever a social security number is asked for on the forms.

Income Tax Compliance and Planning

It is important to use good tax resources to be sure that you have the latest information about tax compliance and planning. As I found out when I used an old form rather than the current one. I discovered that the rates had changed and the tax would have been less if I used a form published more recently. Another good reason to do away with paper forms completely. Digital forms are a good choice. They are more likely to be updated with current rates.

Preparing for your annual meeting with your CPA or EA

There are a few items you will need to gather before going into your tax preparer. Ensure that all forms w-2 and 1099s are available. It is important to compare the items from the previous year so that you don’t forget anything. There are many different types of 1099s. If you receive interest income you will receive a 1099-INT. If you receive dividends from stocks you own then you will receive a 1099-DIV. If you earn nonemployee compensation then you will receive a 1099-MISC. If you receive retirement income from a pension or and IRA then you will receive a 1099-R. All 1099s are needed to properly prepare your return. You will also need your social security income statement if you receive social security income. Income from partnerships, estates, trusts, and S-Corporations will come to you on a form K-1. If you receive a 1099-G that means you received unemployment benefits during the year.

You will also need all forms 1098. These are amounts you paid out that may be deductible. Such as mortgage interest or 1098-T for tuition, or 1098-E for student loan interest. Bring other items you would like to deduct such as property tax, auto tax, charitable contributions, employee business expenses, medical expenses, etc.

Also, bring your year end broker’s statements that might show sales of stocks.

If you receive a form and are not sure if it should be included in the information you provide to your accountant, bring it in and let them decide whether to include it or not.

Be certain that all of these forms have your social security number on them. Someone else who lives with you may need to file a return also.

Make a list of questions for your accountant.

If they provide you with a proforma, answer all of the questions even if you don’t fill in the rest because this helps your accountant to know which questions to ask and what forms will be required in filing your return.

For more information about selecting a tax preparer: www.etaxwiz.com