Papers for Taxes

Papers for Taxes: What to Bring Your Accountant

The better prepared you are, the more efficient the process will be

Whether you prepare your own tax return or let an accountant do all the work, the task of gathering your tax information together is unavoidable. In general, you should have documentation that supports all income, deductions, and credits that will appear on your return, but supporting documentation can come in many forms, as this listing, adapted from The Ernst & Young Tax Guide 1995 (John Wiley & Sons, 1994) makes apparent.

    Wages and Salaries: W-2 forms, usually provided by your employer.

    Dividends and Interest: Form 1099-Div and Form 1099-Int, usually provided by the bank or company paying the dividend or interest.

    Capital Gains and Losses: Broker’s statements for purchase and sale of assets disposed of during the year and Form 1099-B, usually provided bu the broker who sold the assets.

    Business Income From Sole Proprietorship, Rents and Royalties: Books and records. Form 1099-MISC may also be provided by the payor of the income.

    Business Income From Partnerships, Estates, Trusts and S Corporations: Form K-1, usually provided by the partnership.

    Unemployment Compensation: Form 1099-G, usually provided by the governmental agency paying the unemployment compensation.

    Social Security Benefits: Form SSA-1099, usually provided by the federal government.

    State and Local Income Tax Refunds: Form 1099-G; usually provided by the state or city that refunded the taxes.

    Original Issue Discount: Form 1099-OID, usually provided by the issuer of the long-term debt obligation.

    All Distributions, Both Total, and Partial, From Pensions, Annuities, Insurance Contracts, Retirement or

    Profit-Sharing Plans, and Individual Retirement Arrangements (IRA): Form 1099-R, usually provided by the trustee for the plan making the distribution.

    Barter Income: Form 1099-B, usually provided by the barter exchange through which the property or services were exchanged.

    Sale of Your Home: Form 1099-S, should be provided by the person that is responsible for the closing of the real estate transaction.

    IRA Contributions: Form 5498; provided by the trustee or custodian of the IRA.

    Moving and Employee Business Expenses: Receipts and canceled checks and Form 4782, if moving expenses are paid or reimbursed by your employer.

    Medica Expenses: Receipts and canceled checks.

    Mortgage Interest and Points Paid on the Purchase of a Principal Residence: Form 1098 or mortgage company statement, usually provided by the mortgage company.

    Business and Investment Interest:  Cancelled checks and brokers” statements.

    Real Estate Taxes: Canceled checks and mortgage company statements (if they are applicable).

    Other Taxes: Receipts and canceled checks.

    Contributions: Receipts and canceled checks; written acknowledgement from the charitable organization is generally required for contributions of certain amounts.

    What Not to Bring to Your Accountant: You need not bring all of your documentation to your accountant. For example, if you provide a summary of your dividends or charitable contributions, just provide your accountant with the summary of your dividends or charitable contributions, just provide your accountant all of your documentation, he or she will probably feel obligated to verify the accuracy of your summaries, which, as you probably well know, can be a time-consuming process. Your fee increases accordingly. However, you should be able to provide full documentation on request.

Broadway. Photo by Elena.