Preparing for your individual tax return can be tricky and time consuming. The federal government estimates that 60% of individuals use paid preparers to complete and submit their tax returns. If you are one of these people, it’s important to get started right away so you can have a successful tax preparation meeting with the team from NGAS. This year, 2016 federal tax returns are due on April 18, 2017 because April 15th is a Saturday and Emancipation Day is recognized on April 17th. Even with this slight delay, you still need to start promptly and with a tax preparer you can trust.
Here at NGAS we want you to consider the following and gather up the necessary information and forms to bring with you to start your individual tax return. You will need time to gather and organize the information so your appointment will go smoothly. It is better to plan before of coming in to see us. We have put together these ten steps to take before coming in for your appointment.
1. Choose a preparer
If you don’t yet have a tax preparer, the sooner the better as appointment times will fill up quickly. A great way to find a preparer is to ask friends and advisers to make referrals. Be sure that the person you choose has a Preparer Tax Identification Number showing that he or she is authorized to prepare federal income tax returns. Also, inquire about the fees, which likely will depend on the complexity of your return; steer clear of anyone taking a percentage of your refund.
There are too many people that say they are tax preparers, but have little to no real training. Be careful when selecting the right person to do this work for you. Here at NGAS we are Enrolled Agents. We must maintain a high level of ongoing, yearly training to maintain our license. Enrolled Agents can also represent you to the federal or state government if there is an issue or tax matter just like an attorney. So, before you start your individual tax return with software or a tax in the box location, call us. At NGAS you will deal with a trained and licensed tax professional that is looking out for you.
2. Schedule an appointment
The sooner you meet with us, the sooner you can begin the process of getting everything ready to file. It may become necessary to gather other information before we file and you will need time for everything to get done. Even if you believe you will file an extension it is very important to get started early. If you wait too long to schedule an appointment, you may not get to see us before April 18, which could mean you won’t be advised of actions that can still lower your 2016 tax bill, such as your eligibility for making deductible contributions to IRAs and health savings accounts for 2016.
3. Gather your information for your individual tax return
By the end of January, you should have received various types of information returns that you need. For each form, verify that the information matches your own records.
Here are some of the most common forms:
• Form W-2 if you have a job
• Form SSA-1099 if you received Social Security benefits
• Various 1099’s to report income such as cancellation of debt (1099-C), dividends (1099-D), interest (1099-INT), and non-employee compensation paid to independent contractors (1099-MISC)
• Form 1095-A, B and/or C to report information regarding health insurance coverage
• Various 1098’s reporting mortgage interest (1098), student loan interest (1098-E) and tuition payments (1098-T)
• Schedule K-1’s from entities in which you have an ownership interest like S corporations, partnerships, limited liability companies, trusts or estates.
• If you have business income and expenses to report on a Schedule C, you’ll need to have your records from QuickBooks or other accounting system. The receipts for expenses, bank statements and credit card statements are very important also. The more organized you can be the less time it will take us which will translate into lower fees for our service.
4. Get your receipts together
The receipts you bring with you will depend on whether you choose to itemize your personal deductions instead of claiming the standard deduction. If you choose to itemize it will be a situation where it produces a greater write-off. Unfortunately, the only way to know for sure is to determine the amount of your itemized deductions and compare them with your standard deduction amount.
If you are itemizing your deductions or think that you might you will need to bring in all the receipts that pertain to these deductions for various expenses. Look for receipts for medical costs not covered by insurance or reimbursed by any other health plan like a flexible spending plan or health savings account, property taxes, and job-related or investment related expenses.
5. Gather records for charitable contributions
If you made donations to a charity and itemize your deductions, you will need specific records to claim any write-off. For example, if you contributed $250 or more you need a written acknowledgment from the charity stating the amount of your gift and that you did not receive anything in return. If you’re lacking this type of acknowledgment you will need to contact the charity and ask for it. If you need more information about these types of records you will find them in IRS Publication 1771.
6. Understand that some tax laws have changed this year
We will guide you through any changes that you will need to know about your tax situation. The team at NGAS is up to date about the many changes that happened this year. The individual healthcare mandate has made a lot of changes, including new forms for claiming the premium tax credit for eligible individuals who purchased coverage through a government Marketplace (exchange). We will also help you figure out the shared responsibility payment if you failed to carry coverage and did not qualify for an exemption.
7. Make a list of personal information
We will need Social Security numbers and dates of birth for you and your dependents. Who was in college and where? Did all your dependents live with you this year or part of the year and what dates? Please write down any other information that may be important to us as we work through your individual tax return. We will need addresses of vacation homes/rental property, dates you moved, information about property you bought/sold, including dates, what you originally paid, what you received on the sale and expenses you had, and other information needed to complete your return.
8. Do you need an extension
If we see or you feel that you will need more time to file your individual tax return this year we can request a filing extension to October 16, 2017. We will help you determine an estimate of what you owe to minimize or avoid any late fees, but remember there is no extension beyond April 18 for paying the tax that is due. It is just an extension to file your tax returns. Have no fear though we know how to make this process go smoothly for you.
9. What to do about your refund if you have one
If you expect a refund for your individual tax return, you have several options on what you want the government to do:
• Apply some or all the refund toward your next return. The fund will be used for estimated taxes, reducing or eliminating the first installment of estimated taxes due April 18, 2017.
• Send you a check or deposit the refund directly into your checking or savings account.
• Directly contribute some or all your refund to certain types of accounts like IRAs, health savings accounts, education savings accounts or bonds.
10. Find a copy of last year’s return.
If you used North Georgia Accounting Solutions for the previous year’s individual tax return then we will have the information on hand, if you are a new client to us it is very important to bring a copy of last year’s return with you to the appointment, as last year’s return serves as a reminder to some items we don’t want to overlook.