It's That Time |

It’s the last business day of the year. I’d suggest you start getting all your tax stuff in a folder to hand over to your tax professional. (We are ready and willing to help you ☺ ).

There are still a few things you won’t have yet- but you will by the end of January. Unless you are a stockholder in a pass-through entity; then you’ll have to wait until the 15^th of March for all your documents.

Source: WalletHub

Here’s a list of what you should be collecting and collating. (Consider the fact that you have a few days off – it’s the perfect time to get ready. And, remember, that the first day you can file your taxes is 23 January. Oh, your refund (if you are getting one) is going to come MUCH slower this year. Because the IRS is making sure that you are who you say you are…)

W-2’s	The IRS demands these be provided recipients by 31 January
1099’s for independent contractors and solopreneurs	The IRS demands these be provided recipients by 31 January
W-2P and/or 1099-R for pensions and annuities	The IRS demands these be provided recipients by 31 January
Schedule K-1 from pass-through entities	The IRS demands these be supplied by 15 March. However, businesses can request extensions. Which means you can be extensively delayed
1099-INT (interest from banks) and 1099-DIV (dividends and capital gains, stock sales, too)	The IRS demands these be provided recipients by 31 January
1099-G’s for unemployment compensation and/or state income tax refunds	The IRS expects these be provided recipients by 31 January
1099-SSA, Social Security Statements	These should arrive by 31 January
1098 for mortgage payments	The IRS demands these be provided recipients by 31 January
All your bank statements	Examine these for deductible items. For “regular taxpayers”, these would be donations, property taxes, educational payments (college tuition), estimated tax payments (and dates), child care expenses, health insurance, medical expenses, teacher expenses, etc. If you are a solopreneur, don’t forget to seek out office expenses, postage, and other business expenses
All your credit card statements	You would be seeking the same information as listed for bank statements, above.
Any charitable confirmation for items over $ 250	These are typically eMails or letters. Collect them all and keep together.
HUD-1, if you bought or sold a home	Remember that gains on the sale of a house are only taxed if there was more than $ 250K profit ($500K, if married). Don’t forget to add in improvement costs and deduct the costs of sale.
For solopreneurs- the contracts for purchase or sale of equipment or property – or its refinancing	Many of these costs can be rapidly depreciated via Section 179 (requires the filing of Form 4562)

Two other facts. If you are going to itemize (which means you have either a slew of medical bills- way more than 10% of your income, you have very high state income taxes, or pay mortgage interest over $ 10,000 (or a combination of state taxes and mortgage interest of that total or more), then consider sending some worthy organizations a charitable donation before the end of the year. I’m betting that donation will be worth way more this year than it can be next year.

And, take a look at the total amount of federal taxes you owed (not what was withheld) according to last year’s (2015) tax submission. Make sure that you have paid- via the total of your W-2 withholdings and estimated taxes- at least 102% of that amount. (That is unless this year was financially less lucrative than last year.) If not, you should make an estimated tax payment by 15 January 2017 to bring the total to that 102% level- that way you won’t get a penalty for underwithholding and/or underpaying. (No, you can’t wait until 18 April 2017 to make that tax payment!)

As a general rule, we recommend everyone use a bookkeeping system to track their finances. Quicken is one such program; it’s simple to use and can provide reports in a flash for every one of your tax needs.

Or, you could be using our app, which has you snap a photo of each receipt or bill and dictate to your phone the particulars. It prepares a running spreadsheet that makes tax reporting a breeze.