Welcome to a New Tax Filing Season
By Freddy H. Robinson, CPA, Partner
Around my family for the past forty years or so, New Year’s Day football bowl games signal the start of a new season, Tax Season. This is when tax accountants no longer serve as authors for their clients’ income tax liability and become reporters by working to prepare and file income tax returns.
Beginning with 2018 tax returns, documentation for income tax preparation has been somewhat simplified with the elimination of miscellaneous itemized deductions. Listed below are some organizational suggestions that will facilitate collection of your data to be supplied to your 2018 income tax preparer:
- Complete the questionnaire provided by your tax preparer
- If provided to you, complete the Organizer sent by your tax preparer
- If no Organizer is provided to you, compare sources of income from your 2017 return to ensure you have accounted for the same payors in 2018
- List dates and amounts for all state and Federal estimated tax payments for 2018, including payments made in January, 2019
- Provide complete copies for all types of Forms 1099 you received. Use the payors listed in your Organizer provided as a checklist to determine you have received all applicable forms.
- Provide complete copies, including state reporting information, for all Forms K-1 received. Use the entities listed in the Organizer to ensure receipt for all of your entities.
- Summary of income (including any Forms 1099) and operating expense expenditures related to rental properties owned personally or by a single member LLC. Also include documentation for any capital expenditures such as a new roof, A/C unit, or appliances.
- Summary of income (including any Forms 1099) and operating expense expenditures related to any personal business activities. Also include documentation for any capital expenditures such as a new computer, furniture, etc.
- List all charitable contributions paid by check or credit card in 2018. For amounts $250 and greater, either provide the acknowledgement letter from the charity or note that you have received this required documentation and have retained in your records
- Documentation for non-cash charitable contributions such appreciated securities or clothing, etc. to organizations such as Goodwill including acknowledgement from the charity
- Medical expenses continue to be deductible in 2018 provided the total exceeds 7.5% of your income. If you have incurred significant medical expenses in 2018 that may be close or greater than 7.5% of your income, provide receipts/lists for qualifying medical expenses
- Form 1098 or equivalent to document home mortgage interest paid
In addition to the data collection suggestions above, a few tips to simplify this process for the future are:
- Consolidate small bank, savings and brokerage accounts. This leaves fewer things to keep track of for you and your heirs.
- Deliver stock certificates for securities held in your personal name to a brokerage account. This will greatly facilitate ownership transfer at death.
- If you have an existing revocable (living) trust, ensure all accounts and investments have been retitled
- If you are only missing one or two Forms 1099 or Forms K-1, go ahead and submit your information to your tax preparer noting the missing data that will be forwarded upon receipt
- Make sure your retirement account beneficiary designations reflect your current intentions
- Make sure your spouse or heirs have a well-documented trail of your assets, including pass words and safe deposit box access
April 15th will be here before you know it. Happy Tax Season!
Freddy H. Robinson Partner, CPA
Freddy Robinson is a tax partner and has been with Bernard Robinson & Company for over 40 years. He is responsible for tax-related services to individuals and closely held businesses. His areas of specialty include complex income tax issues, Internal Revenue Service examinations, mergers and acquisitions, business valuations, succession planning, estates and trusts, S […]