As we approach another tax season, we would like to help ensure that you are well prepared for it. Of course, there will always be areas unique to your situation, but there are a few items that we see year after year that may affect you. So as you are gathering your information together to bring to your tax preparer, keep these things in mind to minimize the time they will need to prepare your return, and in turn, this will help minimize the cost to you!
It is usually pretty easy to remember your W-2 when it comes to preparing your tax return, but there are plenty of other forms the IRS requires that you may have received. These forms typically include forms that begin with numbers like 1095, 1098, 1099, K-1, etc. Be sure to bring all these with you for your tax preparation.
You are required to have carried health insurance coverage for each member of your family for the entire year. If you did not have coverage for any month for any member during the year, we will need to know some further information. We will need the family member(s) who did not have coverage and which month(s) they did not have coverage. If you purchased health insurance from the marketplace, we will need a copy of the 1095-A you receive for the year. On a related note, let us know if you made any contributions to or received any distributions from a health savings account during the year.
Typically, when you donate non-cash items (i.e. clothes, furniture, books, etc.) to places like Goodwill and Salvation Army, they will give you a receipt signifying that you made a donation. What they often do not include on these receipts is item descriptions, the value of what was donated, and sometimes even the date of the donation. We will need you to give us all of this information if the total of the donations is over $500 for the year. We cannot determine the value of the items, since only you know what was given, how much was given, what condition it was in, etc. Note that if you donate a vehicle with a value over $500, you cannot claim a deduction unless you attach to your return a copy of the contemporaneous written acknowledgment you receive from the donee organization. Also, any one item or group of similar items you give that have a value of over $5,000 will generally need a written appraisal.
Employee Business Expenses:
If you have business expenses you paid for personally, and you are not reimbursed for these expenses under an accountable plan, there are some important things to consider. The most important of these is to keep some sort of record for all your business expenses. This record does not necessarily need to be extensively detailed, but it does need to document the what, who, when and business purpose of your un-reimbursed expenses. Note that these expenses will not be deductible for tax years 2018 and forward, so you may want to consider talking to your employer about being reimbursed for them.
You can claim an exemption for your child if he/she is under age 19, or a full-time student under age 24, if you provide more than half of his/her support during the year. You may also be able to claim an exemption for older children, other dependents in your home or those in certain care facilities. If you have children, parents or other dependents you would like to claim on your tax return, we will need to know the name, SSN, birth date, and how many months they lived with you during the year, for each dependent. If you have a joint custody agreement, you may also need to provide a copy of your Form 8332. If you or your dependent(s) paid tuition for higher education during the year, you will need to provide both the 1098-T from the institution and receipts substantiating your payments and/or loans.
If you are receiving a refund and would like to have it direct deposited into your account, we will need to know the account number, routing number and whether it is a checking or savings account. If you owe and would like to pay through direct debit, we will need the same information as well as what date you would like to pay the balance due (not later than the due date of the return). Please have this handy when you bring us your other tax information.
We look forward to seeing you and serving you this tax season and want to make your experience as pleasant as it can be. Our goal in your tax compliance is for you to pay all the tax you owe, but no more than that. If you have any questions about any of these items, please call us and we will be happy to discuss them with you.
-Heritage Accounting and Tax Services