It’s time to get ready for tax returns. Darn, the Super Bowl is over and the year is already starting along at a fast pace.
Among the important things to do is collecting the tax forms and organizing the data. The W-2s, K-1s and 1099s will start showing up in the mail. Sort them out of the mail and keep them in an organized way. Handling the data only once increases the amount of free time you have to spend with family and friends. Use last year’s return as a guide.
Along with how to get ready for tax season, another question professionals are asked every year is how to avoid an income tax audit. One sure way to get audited is to omit any numbers from forms on your return. Computers work around the clock comparing data from the forms to the returns. So make sure all forms are accumulated and included on the return.
This year the FTB will have W-2 information on file. This is new. In the past you could only call the IRS to obtain W-2 information, but the CA Taxes withheld were a mystery. Now you can fill in the blanks by contacting both Agencies. However, this information may not be available until August, so contact your employer first.
For charity deductions, having a statement from the charity along with the canceled check is required. Documenting that the item donated was in good condition is required, so at minimum keep pictures.
Keep your records in any fashion that works for you. We provide a data checklist and an organizer on our website, for this purpose. We spend a lot of hours updating and customizing these each year, leaving leisure time with friends and family. Have a great year and a stress free tax season!
For more information, please call 661-253-3771.