What To Bring To Your Accountant At Tax Time
Youll need all this information and documentation whether you prepare your tax return yourself or if you decide to use a tax professional. The difference with the professional is that youll have to take all pertinent information with you to your appointment or gather it together in advance to send through fax or electronically. Youll also need some additional documentation if youre using a tax professional for the first time.
Your tax preparer will require identifying information for you, your spouse , and your qualifying dependents, if applicable. This means Social Security cards, although you can typically take a copy of your most recent years tax return instead. This will detail all your identifying information unless youve since acquired another dependent who wasnt listed on that return.
Of course, you wont have to bring all of this with you if youre using the same professional youve used before. Theyll already have everything at their fingertips.
Its a good idea to take your previous years tax return with you to meet a tax professional, even if you have Social Security cards for everyone in your family. This should give your tax preparer an accurate picture of your personal tax situation, in addition to the identifying information it includes.
While it may seem like a lot of paperwork, gathering and organizing it will be worth it, especially if your tax situation is complex and requires a great deal of documentation.
Get Organized For Next Year
If you end up with a big tax refund or a large tax bill, you probably want to go ahead and adjust your withholdings so that youre not taking too much or too little out of your paycheck for taxes.
And one more thing: Once your taxes are signed, sealed and delivered to the IRS, you might be tempted to celebrate by starting a bonfire and burning all those receipts and tax forms in a blaze of glory dont do that.
Instead, promptly file any tax documents and important receipts when you receive them so you dont have to search the house for them next spring. Buy a few manila folders, an accordion file or a filing systemthat will hold your tax documents and save those documents for at least three years. You might need them if the IRS comes knocking.
You Wont Have To File Taxes If You
- Earn income below the limit of the standard deduction. The amount of this deduction will depend on your age, type of income and filing status.
- Make an election to include your childs income on your return. Under certain circumstances, such an election may mean that the child doesnt have to file a return.
- Have a dependent child who has a combined unearned income of $1,050 or earned income up to $12,000 plus $350, whichever is higher. Typically, dependents can earn larger amounts of unearned income without having to file a tax return.
- Earned less than $400 in self-employment income.
As a rule, if in any year you dont owe the IRS any money, and if you do not qualify for any credits or are not expecting any refunds, then you may consider not filing taxes for that year. If the value of credits and/or refunds do not outweigh the time, effort and cost of filing, then you could consider not filing.
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Information About Your Income
- Income from jobs: forms W-2 for you and your spouse
- Investment incomevarious forms 1099 , K-1s, stock option information
- Income from state and local income tax refunds and/or unemployment: forms 1099-G
- Taxable alimony received
- Business or farming incomeprofit/loss statement, capital equipment information
- If you use your home for businesshome size, office size, home expenses, office expenses.
- IRA/pension distributionsforms 1099-R
- Rental property income/expenseprofit/loss statement, rental property suspended loss information
- Social Security benefitsforms SSA-1099
- Income from sales of propertyoriginal cost and cost of improvements, escrow closing statement, cancelled debt information
- Prior year installment sale informationforms 6252, principal and Interest collected during the year, SSN and address of payer
- Other miscellaneous incomejury duty, gambling winnings, Medical Savings Account , scholarships, etc.
You Have To File Taxes If You
- Received distributions from a health savings account, Archer MSA or Medicare Advantage MSA.
- Are eligible for, and would like to receive, a tax refund. This will allow you to recover any excess amounts you might have paid the IRS over the past year.
- Qualify for, and would like to claim, applicable tax credits such as the earned income tax credit or child and/or dependent care credit.
- Received wages from an employer who did not deduct withholding taxes on such payments.
- Earned over$400 in self-employment payments during the year and have to pay self-employment taxes.
- Owe any special tax such as the alternative minimum tax .
- Owe excise tax payments related to retirement plan assets, such as penalties on excess contributions to individual retirement accounts or distributions from such assets.
- Received certain types of income, such as tips or gratuity payments, on which you have not paid Medicare or Social Security tax.
- Earned $108.28 or more from a church or other qualified organization that is exempt from deducting Medicare or Social Security tax.
- Sold your primary home and it resulted in a gain of more than the prevailing primary home sale exclusion limit set by the IRS.
The following table sets out the filing requirements for a typical taxpayer.
Canada Tax Checklist: What Documents Do I Need To File My Taxes
Picture this. Tax season has snuck up on you once again and youre scrambling trying to find all the documents you need, trying to make sure youre not forgetting anything.
You may not have an idea of where to start and this is why having a tax checklist is important and a great way to stay organized. In this article, well go through everything you need to have handy when filing your taxes.
Who Has To File Taxes
Generally, the vast number of Americans will file taxes each year. However, the IRS weighs several factors when determining whether you must file a tax return. These include:
- Your age
- Your filing status
- Your income: The amount and type of income received determines whether you must file a tax return
- Whether you have a qualifying child as a dependent
The combination of these four basic criteria determines who must file taxes but there are several special circumstances that also goes into determining who must file taxes. The reporting requirements and filing eligibility criteria may change between tax years, so make sure you consult IRS resources online or speak with a qualified tax advisor before deciding not to file.
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What Documents Do I Need To File My Taxes
In addition to proof of your identity, and the identities of your family members, documents you should bring to a tax preparer include:
When Is The 2022 Tax Season
“Tax season” for the prior tax year is in the early months of the following year. For the 2021 tax year, the Internal Revenue Service will begin accepting and processing returns on January 24, 2022. Also, 2021 tax returns will be due on April 18, 2022, which is later due to the Emancipation Day holiday in the District of Columbia on April 15th. For those living in Maine or Massachusetts, the deadline to file is April 19, 2022, due to the Patriots’ Day holiday in those states.
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Do I Need To File Even If Im Not Required To By Filing Status Age And Income Level
In some cases, yesyou will still need to le a tax return if any of the following apply:
- You owe any taxes, such as alternative minimum tax, taxes on a retirement plan distribution, household employment taxes, and Social Security and Medicare taxes that were not withheld from income.
- Repayment of the First-Time Homebuyer Credit.
- You received a distribution from a health savings account, Archer MSA, or Medicare Advantage MSA.
- You had at least $400 in self-employment income.
- You earned $108.28 or more from a church or qualified church-controlled organization that is exempt from employer Social Security and Medicare taxes.
- You received an advance payment of the Premium Tax Credit for health insurance bought from a health insurance marketplace. You should receive Form 1095-A with the amount of the advance payments.
- Advance payments of the Health Coverage Tax Credit were made for you, your spouse or a dependent. You should receive Form 1099-H with the amount of the advance payments.
- You are required to file Form 965-A for an elected installment payment.
- You are claimed as a dependent, but your income exceeded the filing requirement threshold.
Educational Expenses For Any Age
College students are not the only people who can deduct education expenses from their taxes. Graduates pursuing continuing education are covered too.
Students of any age can benefit from the Lifetime Learning credit which is 20 percent of the first $10,000, up to $2000, spent on higher education. This credit is not available at higher income levels but does not have an age cap.
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Keep An Eye On Your Income
You need to file a tax return if you meet or surpass certain levels of income during the year. If youre employed, look at your pay stub for the year to date incomeand if you have more than one job, be sure to add up your income from all your employers. Remember to include income from other sources, too, such as money you make on rental property, anything you sell, investments or interest.
Itemized Tax Deductions And Credits
The government offers a number of deductions and credits to help lower the tax burden on individuals, which means more money in your pocket. You’ll need the following documentation to make sure you get all the deductions and credits you deserve.
- Child care costsprovider’s name, address, tax id, and amount paid
- Education costsforms 1098-T, education expenses
- Adoption costsSSN of child, legal, medical, and transportation costs
- Home mortgage interest and points you paidForms 1098
- Charitable donationscash amounts and value of donated property, miles driven, and out-of-pocket expenses
- Casualty and theft lossesamount of damage, insurance reimbursements
- Other miscellaneous tax deductionsunion dues, unreimbursed employee expenses
Properly documenting the taxes you’ve already paid can keep you from overpaying.
- State and local income taxes paid
- Personal property taxesvehicle license fee based on value
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Common Income Deduction Statements
Most taxpayers depend on the same basic data to file returns. If you work for someone else, the IRS expects you, and the agency, to get a statement detailing that income. The data are slightly different, depending on whether you get paid a salary or do contract work, but theres a form for either case.
W-2 This is the key form, and you need one from each employer you worked for during the past year. Your W-2 shows how much money you made, how much income tax was withheld, Social Security and Medicare taxes paid, and any benefit contributions retirement plans, medical accounts and child care reimbursement plans.
1098 For most homeowners, mortgage interest is tax-deductible, and this document will tell you how much you paid last year. Your lender is required to send you one of these forms if you paid at least $600 interest. Actually, your mortgage company probably wont send you an official IRS form, but a document of its own design that contains the same data. In addition to the mortgage interest, other information often found on this statement includes amounts paid toward points to get the loan and escrow disbursements for real estate taxes and property insurance .
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How Long Does A Tax Return Take In Canada
Processing times for your tax return depend on how you filed it. For tax returns filed online, the Canada Revenue Agency strives to process most electronically filed returns within 2-4 weeks and paper filed returns within 8 weeks.
You can expect to get your tax refund within this time period. This timeline is only valid for tax returns completed on or before their due date. If you live outside of Canada and file a non-resident personal income tax return, your return may take up to 16 weeks.
Returns selected for a detailed review may take longer. If you select to receive your refund through direct deposit, you will get it faster than a check in the mail.
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What Tax Documents Do I Need To Keep
It may be wise to keep your annual tax returns from at least the last three years. You’ll likely want to reference your prior year’s tax return when you file the current year’s return. You’ll also want to keep any receipts from charitable contributions, proof for tax deductions or tax credits you hope to claim, and any forms the IRS sends you year-round.
Other Tax Documents Or Notices
- IRS Notice 1444, 1444-B, and/or 1444-C for your Economic Impact Payments
- IRS Letter 6419 for your Child Tax Credit advance payments
- IRS Letter 6475 for your 3rd Economic Impact Payment
- Form 1095-A if you had coverage through the Health Insurance Marketplace
- Documents from the IRS, Health Insurance Marketplace, your state tax agency, or anything that says IMPORTANT TAX DOCUMENT
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What Do Tax Accountants Do
Tax accountants have two primary roles preparing tax returns and tax planning.
Whether a tax accountant is self-employed or working for an accounting firm, they specialize in assisting clients with tax return preparations. They meet with clients to gather needed documentation like paystubs, proof of investments and other financial documents. To file these returns, an accountant needs to be familiar with the tax laws. They figure out how much tax is owed by looking at a clients tax deductions and credits.
Accountants who do tax planning often work with larger companies who work internationally. The objective of tax planners is to develop a strategy for corporations to avoid tax ramifications and minimize income tax. Internal and external accountants are hired by these companies to develop long-term plans to save them money over time.
Sign Up For Your Cra My Account:
If you havent done so already, do this first thing. It will allow you to check on the status of refunds, your outstanding balances, RRSP & TFSA contribution room, and as well keeping the Canada Revenue Agency up to date on your address and such. You will also be able to get any missing Notices of Assessment your tax preparer might require.
Life changes impact your income taxes in ways you might not be aware of. You need to tell your tax preparer what changed for you in the tax year.
Extra Tip: No matter whether you think it impacts you or not, be upfront, and make sure the details are known so you can be confident you are getting every credit and deduction that you qualify for.
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Save The Right Paperwork All Year Long
Stay on top of tax-related paperwork throughout the year it will make your life easier during tax season. You might want to keep receipts for things like charitable donations, work-related expenses and medical bills, or other items from step 4. You may also want to keep statements from student loans or investments and any grants or fellowships. Having these handy and organized can help you determine whether to itemize and make the process easier. You should keep your paperwork after you file, too. The IRS recommends keeping records for at least three years.
Information And Forms You Need To File Taxes
No matter what method you choose to file your taxes, there are certain items you will need to have on hand.
You need to identify yourself and your dependents by Social Security number. You also need to document your filing status, taxable income, the amount of tax you’ve already paid, and any deductions and credits for which you may be eligible. This means you will need to wait to receive all of your W-2s, 1099 forms, and other documentation, typically sent by end of January, before filing your taxes.
Here’s what you’ll need to have handy:
- Names, dates of birth, and Social Security numbers for yourself, your spouse, and any dependents
- Form W-2, which you receive from your employer and which reports your income and taxes already paid by your employer on your behalf
- Form 1099-NEC , which you should receive if you earned more than $600 working for a non-employer entity, worked a contract job, or had a side gig
- Form 1099-MISC, which you would receive if you earned more than $600 in other income, including rents, prizes, fishing boat proceeds, or crop insurance payments
- Form 1099-INT, which you would receive from a bank or other financial institution if you earned more than $10 in interest during the tax year
- A record of your retirement account contributions
If you plan to itemize deductions rather than take the standard deduction, these are the records most commonly needed:
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