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15 Tax Filing Tips

The tax laws are complex, and they seem to change every year. Here are some suggestions that can help make filing your tax return an easier task.

1. Start early. Any unpleasant chore becomes more difficult if it's left until the last minute, so get an early start on filing your tax return. Get out last year's return and look it over. Your prior return or a tax organizer can be a real timesaver, and a moneysaver as well, since it jogs your memory concerning deductions you might otherwise overlook.

2. Summarize deductions. Go through your checkbook, credit card statements, and receipts for cash purchases looking for possible deductions. Add up the totals for medical expenses, union dues, mortgage and other interest, real estate taxes, charitable donations, work-related expenses, personal property taxes, and any other items that you think may be tax deductible. Plan to review these potential deductions at your tax appointment.

3. Gather tax documents you receive. Save all documents you receive that contain information you'll need for tax return preparation. Typical forms include:

  • Form W-2 - statement of wages.
  • Form W-2P - retired pay, pensions, annuities, etc.
  • Form 1099 - interest, dividends, royalties, etc.
  • Form 1099G - state and local income tax refunds.
  • Form 1099B and brokerage statements - sales of securities.
  • K-1s - income and deductions from partnerships, S corporations, trusts, estates.

4. Check other items that apply to you. Other income and expense items you'll need:

  • Alimony paid or received.
  • Unemployment compensation benefits.
  • Social security benefits.
  • Business income and expenses.
  • Rental income and expenses.
  • Farm income and expenses.
  • Employee business expenses.
  • Contributions to retirement plans.
  • Any estimated taxes paid.
  • Child or dependent care expenses. Be sure to have the social security number or employer identification number of the child-care provider.

5. Correct discrepancies before you file. The IRS matches the documents it receives from various sources with the information you report on your tax return - for example, the interest income as reported on Form 1099. If you receive information returns that are inaccurate, contact the issuer to get a corrected form. If you cannot get a correction, plan on attaching an explanatory note to your tax return.

6. Don't forget tax-exempt income. Don't forget to keep records concerning your tax-exempt income. The amount must be reported on your tax return, even though it is not taxable income to you.

7. Get required numbers. Your return requires that you give social security numbers for any dependents you claim.

8. Review children's filing requirements, too. As you gather information on your income and expenses, don't forget to review the same information for your children. Your children may have filing requirements.

9. Schedule your tax appointment early. Afterward, you may need time to chase down missing records or resolve other problems before the April 15 filing deadline.

10. Identify your tax payments. In order to have your tax payments properly identified and credited to you, put complete information on every check you send to the IRS. Include your name, address, social security number or business ID number, type of tax being paid, and the tax year involved. Don't combine two or more payments on one check; always send a separate check for each tax payment.

11. Notify the IRS when your address changes. The IRS has a change-of-address form - Form 8822. If you change your address between tax return filings, use this form to notify the IRS of your new address. If you don't, IRS notices and tax refund checks might not reach you.

12. Get prior year returns if you need them. You can obtain copies of prior year tax returns directly from the IRS. Send Form 4506 (along with the applicable fee) to the Internal Revenue Service Center where the original return was filed.

13. Don't ignore IRS correspondence. If, after filing your tax return, you receive an IRS notice asking for additional information or assessing additional tax, don't just set the notice aside. The IRS request should be handled quickly to avoid lengthy correspondence (and possible interest and penalty assessments).

14. Keep good records. Assume that your return could be selected for an audit, and keep good records. Keep bank statements, cancelled checks, and records supporting income and deductions for seven years from the date your return is filed (including any filing extensions).

15. Stay calm if you're audited. If you are selected for an audit, either randomly or because of unusual deductions, stay calm. Though an audit is no one's idea of a pleasant experience, good records and an accurate return will minimize the agony.

If we can assist you in any way in your tax and business affairs, contact our office.

Mary Currie & Associates, Inc
Accountants and Consultants
PO Box 7806
3308 Sunset Ave
Rocky Mount, NC 27804
(252) 937-2131
Fax: (252) 937-2373
Email: curriecpa@aol.com

Member of NC Association of CPAs #23907