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West Michigan Woman West Michigan Woman Feb Mar 2013 : Page 24

fInAncIAl preparation fees, if your CPA doesn’t have to sort through shoeboxes full of information to determine what’s really needed to prepare your return. Here are a few commonly forgotten items: • Social security number for a new baby. TaX PRePaRaTIon T 24 taxes. to most people, that’s the equivalent of a four-letter word. But with a little preparation and organization, tax returns don’t have to be so aggravating. Whether you prepare them yourself or have a CPa prepare them, there are a few things you could do to make the process a little less painful. Withou Tea By adriane Schrauben, CPa • Closing statements on a refinanced mortgage or home equity loan. • Information for the Childcare Credit— daycare center tax identification numbers, social security number of an in-home daycare provider, addresses, phone numbers, etc. • Unreimbursed employee business expenses such as mileage, license fees, training costs, uniforms, cell phones required for business, etc. • Noncash charitable contributions, such as clothing donations to Goodwill—a list of items, the original cost, and the amount of deduction to be taken. • Adoption credit—social security number of child, and legal, medical, and transportation costs. • Job-seeking expenses (if looking for a job in the same field). • Government-issued notices. • Fixed asset additions or deletions for your business. orgAnIzE your InforMAtIon Not only is “Get Organized” a common New Year’s resolution, it’s also helpful in preparing your taxes. If you have a lot of different types of income or deductions, or own your own business, it’s helpful to organize the information you’ve already gathered. Since you should retain this information for seven years to support your return, creating a system of organization not only helps with the current year’s tax returns, but could also help save time in the future should you need any of it going forward; for example, refinancing your mortgage. Many people choose to organize their information electronically, but good kEEp trAck of your fInAncIAl rEcords Keeping track of your finances is important, for many reasons. Not only will it help you understand where your money is going and aid in preparing and maintaining your household budget, but it also makes tax preparation quicker and easier. Whether you use a software product like Quicken, a mobile application like Mint.com, or prepare your own Excel spreadsheet, it helps to look over your income and expenses to make sure you are gathering the necessary documentation needed to prepare your tax returns. For example, it’s easy to forget about a charitable contribution that was made in February of the previous year. Reviewing your financial records helps ensure you don’t miss anything. For business owners: Accurate, complete financial records are imperative for a quality tax return. They will also dictate how much tax you end up paying. If your records aren’t in good shape, you could either pay too little or too much in taxes, depending on whether all transactions were recorded. Neither situation is a fun one to be in if the IRS shows up at your door. Additionally, take steps to keep your personal finances and expenses separate from those of your business. gAthEr your InforMAtIon Once you’ve reviewed your records, you’re ready to start gathering your documentation. Most tax forms (W-2s, 1099s, etc.) are mailed to taxpayers by January 31, although there are exceptions for investment income 1099s. As you receive the information, open the envelopes! That may seem quite obvious, but it’s amazing how many times business owners hand over to their CPA unopened bills or mortgage statements mistaking them for a 1099. Your CPA should send out a tax organizer in early-to-mid January. Use it! It could be a great tool to help you gather your tax records. While it could be tedious, gathering all of your documents before tax preparation begins allows for a smoother and quicker process. It may even reduce your tax February/March 2013 : wMw www.westmichiganwoman.com

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