2012 New Year’s Resolution: Get Organized Now For Your Tax Return

Your annual tax return preparation doesn’t have to be an annual ordeal.  Most taxpayers share the same goal: pay the minimum amount of tax due, with a minimum amount of hassle. And that’s where getting organized can make all the difference: by minimizing your stress when taxes are due. 

So make your 2012 New Year’s resolution to get organized now and improve your chances of taking advantage of all potential deductions. Proactive actions save time for both you and your CPA. And remember, the earlier the better when providing your organized information to your tax preparer in order to ensure timely filing. 

Jump Start Your Resolution: Review Last Year's Tax Return

Your CPA will usually send you a Tax Organizer based on your prior year tax filing. (CRI typically mails these to our clients in early January.) The Tax Organizer walks you through the necessary steps for organizing your paperwork and typically covers the following categories:  

- Information about you and your dependents

- Income Information (if a joint return, include your spouse's income):

- Wages, Salaries, Tips, etc.

- Interest from Banks and Financial Institutions

- Income from Estates & Trusts

- Income from S-Corporations and Partnerships

- Gains and Losses from Sale of Property, Stock and Securities

- Sale of Residence

- Social Security

- Tax Refunds

- Alimony and/or Child Support

- Income from Rental Property

Taxes Paid and Other Credits

- Income Taxes

- Estimated Taxes

- State and local taxes

- Child or Dependent Care

- College or Tuition

Deductions

- Rental Property Expenses

- Medical Expenses

- Contributions

- Interest on Home Mortgage

- Business Deductions (if self-employed)

Some Assembly Required

First, you will need to report your income and make certain you have the required forms since the IRS will receive copies of these same forms directly from the issuer and match the amounts to your return. So go ahead and assemble the following documents:

- 1099s for Dividends, Capital Gains, etc.

- W2s for Wages, Salaries, Tips, etc.

- K1s for Partnership Investments, S-Corporations, etc.

Be Sure to Follow-Through: Deductions Are Worthwhile

When it comes to resolutions, follow-through is key. Do not overlook any legitimate deductions and give money to the tax man unnecessarily. Supporting documentation for itemized deductions should also be pulled together, including: 

- Medical

- Taxes

- Charitable Contributions*

*Non-cash charitable deductions must be in “good” condition to be tax deductible. For items valued at more than $500, you must provide additional information with your federal return. Items claimed over $5,000 must be accompanied by an appraisal (other than publicly traded securities). Remember that your time/services given to a charitable organization cannot be deducted. But your mileage can, so be sure to keep a mileage notebook.

Avoid Common Mistakes

The most common preparation mistakes are failing to provide your CPA with these important documents:

- Amounts of estimated tax payments made and dates of payment.

- Closing statements for any refinance or new home purchase.

- Personal property tax statements.

- Real estate tax statements.

- Investment advices.

- 1099s.

- Cost basis for investment sales.

And remember, while e-filing is being mandated more often by both federal and state tax offices, planning ahead is still required. Now more than ever, it pays to have a tax professional that is equipped with the latest technology to handle it.

Ask Questions

At Carr, Riggs & Ingram (CRI), our CPAs are available throughout Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, Tennessee, and Texas to help you actually accomplish one of this year’s resolutions. We have the expertise and the technology to make your individual tax preparation and filing, as well as business tax preparation and filing, run efficiently while garnering every deduction and credit you deserve—with no new gym membership or fad diet required. So run to see CRI today!