Making it Easy to File Your Taxes: 5 Prep Steps

Filing taxes is often one of those dreaded tasks that we all have to do, like going for an annual physical or visiting the dentist. And it can be especially painful if you don’t have accurate records or don’t know what your accountant might need. But it doesn’t have to be painful—if you’re prepared. Follow these five steps and have your paperwork in order before you visit and it’ll be a breeze.

  1. Know Your Status

Are you self-employed or are you a W-2 employee? If you own a business, are you a sole proprietor, LLC or a corporation? Knowing which category you fall under makes a world of difference because it’s simple to find the right forms and schedules to fill out based on your filing status. You also need to let your tax professional know if you’ve recently been married (or divorced), had a baby (or a child leave the nest), if you’ve recently bought (or sold) a house or changed jobs in the last year. We’ll take into account any major life changes you had in 2015, including any freelance or contract work you may have taken on to boost your income.

  1. Know Your Business Deductions

If you’re a business owner, do you know what your expenses are for mileage, auto care or travel? Keep in mind that you need to have verifiable records for each deduction, and you can’t just “ballpark” totals. There’s a long list of deductions you can claim if you’re a business owner, including part of your rent or mortgage if you work out of your home. Before visiting a tax professional, make sure to gather all of your records that can be used to help file with business and personal deductions.

If you’re self-employed, be ready to provide a profit/loss report and balance sheet for the year. Don’t have those? See why it’s so important to keep track of your bookkeeping for the year!

  1. Know Your Itemized Deductions

Do you pay property tax, or vehicle registration (depending on the state)? Donations, whether in the form of goods or money, are also often itemized on a Schedule A form, depending on your ownership status. Also, take into consideration any large, out-of-pocket medical expenses, as those may be Schedule A deductions as well. Remember, while the IRS has a high income threshold for deducting medical expenses, Arizona has no such threshold! While the IRS’s list of individual credits and deductions may help, a licensed tax professional can help you identify often-missed deductions to help save you money.

  1. Know Your Assets

Before filing your taxes, you need to know what your investments are worth. Investments can include your retirement or savings accounts (that are accruing interest), investment properties and other assets that affect your net worth. It’s a good idea to gather bank and investment account statements as well as the year-end tax forms you’ll receive for each of them. Additionally, if you’ve sold any securities investments (stocks or mutual funds), you’ll need to know your basis in these investments to report your gains or losses.

  1. Know Your Health Care Coverage

According to the Affordable Care Act, you must be able to prove that you’ve had health insurance for the past year when filing taxes, whether it’s provided by an employer, a state marketplace or Medicare. This health care worksheet will also help you work through health care in your household, so you have accurate information (and forms) to bring in during your appointment.

Once you’ve gathered and organized your paperwork, completed the tax information checklist and signed our tax preparation letter, schedule an appointment with us! We must receive all information by March 31, 2016 in order to ensure your return will be completed by April 15, 2016. If we do not receive your information by March 31, we reserve the right to file an automatic extension.

We look forward to seeing you again, and helping your tax filing go painlessly and seamlessly!