The beginning of a new year is a great time to start getting organized for tax season. Here are four tips from our tax team to help you get started:
1. Find a home for your documents.
Create a folder on your computer’s desktop to save your electronic documents in PDF form to make it easier to send everything to your tax professional. If you’re working mostly with paper documents, “home” could be a shelf, drawer, or envelope to hold all of the documents you’ll need during tax season.
2. Double-check that you have all of the necessary documentation.
These documents might include W-2s, 1090s, profit/loss statements, expense reports, gambling winnings, scholarships, and more. Consider the following:
- Did anything unusual happen in the past year regarding your income or deductions?
- If something unusual did occur this year, do you have the proper documentation for it? (If you don’t – contact the company to request the missing information.)
- Do you have any rental properties? (You’ll need those receipts!)
3. Remember any charitable contributions.
Did you make any donations in the past year- cash or non-cash? Find those receipts, thank-you letters, and drop-off slips. Be sure that you include the value of non-cash contributions, like a clothing donation. With the passing of the CARES Act in 2020, taxpayers who do not itemize can claim up to $300 of cash contributions to charity so send in all charitable contributions.
4. Summarize your deductions.
Your tax professional will need a summary of any real estate taxes paid directly to the county (not through your mortgage), medical expenses paid, or political contributions made. We suggest making a spreadsheet of these expenses!
5. Check you mail every day!
Don’t forget to stay on top of your daily mail – especially those letters with the “important tax document” stamp – and your email during tax season.
Once you have everything together, connect with your tax professional. If you’re not a Corrigan Krause client yet, click here to get started.