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10 Steps to Tax Preparation

10 steps to TAX PREPARATION 1. 2. Collect your 1099s and W-2s Collect Copies of Bank or Brokerage Statements Employers typically send W-2 wage information to their employees via regular mail by the end of January. About this same time investment firms will send out 1099s as well, detailing any stock or bond sales you've transacted over the course of the past Brokerage statements come in handy because they often contain data that may alert your accountant to tax-loss you might have from last year. BROKERAGE STATEMENTS year. Review your Documents V Stock or Bonds Tax Credit VTax Losses V Securities sold V Income earned Tax Gains 3. 4. Set Aside IRA Contribution Proofs Find Social Security Information For New Additions To Your Family In 2011, taxpayers under 50 years of age are allowed to contribute $5,000 per person to their IRAS. Those over 50 may contribute $6,000.With that in mind, taxpayers should set aside proofs of this contribution. Be sure to provide your accountant with the social security number of any children that you had or have adopted over the past year. If you earn under $75,000 as a single taxpayer or under $110,000 as a married taxpayer, you are eligible for a $1,000 tax credit. SOCIAL SECURITY Deductibles Tax Credit IRA Contributions Dependent Children 5. 6. Gather Work Related Receipts Save Pictures, Receipts or Records of Charitable Donations If you purchased an item that you need for your job and your employer does not reimburse you for that expense, then the item is deductible. Both the federal government and the IRS encourage individuals to make donations to charities by offering deductions for donations. However, receipts detailing the items donated must be saved and included with your tax return. ARMY Deductibles goodwill Deductibles Uniforms Donated Goods Self-employed business 7. 8. Gather Mortgage Receipts Gather Proofs Of Purchase For Energy Efficient Goods While your mortgage company will provide you with a 1099 detailing the interest you've paid on your loan throughout the year, saving individual mortgage receipts also makes sense. New Electric vehicles purchased after December 31,2009 will come with a tax credit between $2,500 -$7,500 depending on the vehicle and the phase out calculation. Deductibles Tax Credit V Interest on Home Loans V Hybrid Vehicle V Mortgage '9. 10, Locate Last Year's Tally Co-Pays Tax Return Before completing your taxes this year, be sure that both you and your accoun- tant review last year's tax return. The return will provide YOU with a wealth of Most employees have the cost of medical insurance deducted from their paychecks on a pre-tax basis. Therefore, these amounts cannot be deducted again on your tax return. information that can be valuable to this year's return. INCOME TAX RETURN Deductibles V Tax loss information Doctor Bills Withholding information V Hospital Bills Capital gains PREPARE FOR TAXES Organize your papers and files long before tax time Your system is key to managing your finances. No matter how simple or sophisticated, develop a strategy that you'll actually use. Stay low-tech by just sorting receipts, pay stubs, W-2s and other information into file folders. APRIL 14 DEAD LINE If you put it off until April 14, you're more likely to make a mistake, and any tax preparer you work with may not have time to complete your return. Remember, if you file for an extension, you still need to pay up by the April deadline to avoid being assessed penalties and interest. Get a jump on your taxes. Sources: INFOGRAPHIC DESIGNED BY NationalPositions Associates, NC, TAX CONSULTANTS %24 %24

10 Steps to Tax Preparation

shared by InfographicMarketing on Sep 05
Everyone dreads the April 14th tax date deadline, and if you’re one who tends to put it off until the last minute, you know it can be especially stressful. Not only are you more likely to make a mis...


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