Have You Thought About Your Tax Year?

Tips To Get Prepared For Tax Season

After owning my own CPA firm for almost 14 years now, I know what it means when someone asks me, “Are you ready for tax season?”  To a CPA it means something completely different; longer hours, computer programs with bugs, last minute tax law changes and the general added stress that comes with preparing 1,200 returns, 3,000 W2’s, and 2,000 1099’s in 12 weeks.  However, preparing for tax season means something entirely different to our clients. You will be surprised at how many entries you find that will in some way impact your tax return. Did you change jobs?  Did you send your daughter off to college?  Did you start a small business? Did your employer require you to own a cell phone or drive back and forth to Asheville every day? These are just some of the examples of what my clients should be thinking about right now.

When getting ready for another year of taxes, I tell all my clients to sit down for an hour or so and think. What happened last year? Most people do not keep great records. They forget about the time last February when they refinanced their house. Or they forget about the time last July that they had to take money out of a 401K to pay fall tuition for a child.

What should you be doing to get ready for tax season?

In a word, thinking. Pull out your check register and annual credit card summary, whether electronic or manual, and flip through the entries. I find that this is the best way to get the tax part of your brain warmed up. You will be surprised at how many entries you find that will in some way impact your tax return. Remember when you visited that church while on vacation and wrote them a $20 check? It’s buried in your check register and is tax deductible.

Once you have gone through the register, it’s time to get serious. What else happened? Have you thought about…

What I have mentioned only scratches the surface of what some include on their tax returns. It’s easier, in my opinion, to think about what happened during the year. If you are a returning client, then we already know most of what’s going on. We know if you own a house, or have a small business or have a child in college. What we may not know is your husband had heart surgery last year. Oh, and in most cases, your medical deductions have to exceed 10% of your income, up from 7.5%. It keeps getting tougher to write off those doctor visits. If you are a new client, we encourage you to set up a tax consultation with either Debbie or Stacy. It’s easier to get the return right the first time rather than amend it in June.

So take a few minutes to think about what happened last year. Just because you have received your W2, mortgage interest statement and Social Security statement doesn’t mean you are ready to file your taxes. Take a few minutes to mentally review the tax year. Once you have done that, then you might be ready to file. Happy Tax Season!!