Ways to Prepare for Taxes
It’s that time of year again! The New Year starts the countdown until April 17th, 2012 (i.e. the due date of your 2011 individual income tax return). The best way to make the preparation of your income tax return as painless as possible is to be organized and thorough. Here are some steps for doing so:
Collect all of the tax documents mailed to you in one file. Some common forms you may receive:
- Form W-2, Wage and Tax Statement – If you were an employee during 2011, this document must be provided to you by January 31st, 2012.
- Forms 1099-INT, Interest Income, 1099-DIV, Dividends, 1099-B, Proceeds – You probably won’t receive these documents reporting your 2011 investment income until the middle of February.
- Form 1099-MISC, Miscellaneous Income – If you were an independent contractor during 2011 or received rents, royalties, etc., this document must be provided to you by January 31st, 2012.
- Form 1099-R, Distributions from Retirement Plans, IRAs, etc. – This document must be provided to you by January 31st, 2012
- Form SSA-1099, Social Security Benefit Statement – This document must be mailed to you on or before January 31st, 2012.
- Form 1098, Mortgage Interest State – This document must be furnished to you by January 31st, 2012.
- Schedule K-1 – These forms are issued to S Corporation shareholders, beneficiaries of trusts, and partners in partnerships/LLCs. You could receive these forms anytime from February through October. It just depends on when the tax return for the S Corporation, partnership, or trust is prepared. Thus, you may need to extend your individual income tax return if you are waiting on a Schedule K-1.
These steps will help you whether you prepare your own return or provide this information to your CPA. Don’t hesitate to ask your CPA if you have any questions.