Get Ready for Tax Filing

1040 Income tax return

With the 2017 tax filing deadline approaching, it’s never too early to start going through your documents and getting your paperwork in order. You are the one responsible for providing the necessary information to submit a tax return, regardless of whether you’re filing your own taxes or paying a tax preparer to do them for you.To ensure smooth processing of your 2017 tax return and to avoid a delay in getting your refund, here is a comprehensive list of the tax preparation items you’ll need.

Basic Information

To file your tax return, you’ll need a few key pieces of personal information, including your name, date of birth, social security number and bank account information (if you’re signing up for direct deposit). You’d be surprised at how many people have their taxes rejected for providing the wrong basic information. Don’t forget to spend some time and check yours carefully before including it correctly on your tax return.

Income Documents

In order to file an accurate return, you’ll need to report all of the income you received for the 2017 tax year. This figure encompasses more than just your salary. Interest and dividend payments, freelance compensation, social security checks, retirement plan benefits, and any other earnings you collected during the year are all considered part of your total income.

Some common forms and documents you’ll need are listed below. Typically, these forms start arriving by mail in January. Check them over carefully, and if any of the information shown is inaccurate, contact the payer right away for a correction. Double check to be sure all tax forms have been issued before filing. If a tax form arrives after you have filed you will need to file a corrected return. It will save you a headache to double check that all the forms have been issued before filing.

Tax Form Information Included on Form
W-2 Wage and tax statement
1099-MISC Miscellaneous income
1099 INT Interest income
1099-DIV Dividends and distributions from investment
1099-C Cancellation of debt
Alimony Payment Summary Alimony amount paid to you by your former spouse
Business Profit and Loss Statement Profit and loss information if you own your own company
Rental Profit and Loss Statment Income and Expenses related to your ownership of a rental property

Adjustments to Gross Income

Adjustments to income can help you reduce your total income to a lower adjusted gross income (AGI) and thus lower your tax burden. They are often referred to as “above the line deductions.” The following are common items that count towards the adjusted AGI.

Income Adjustments  Reson for AGI Adjustment
1098-E Wage and tax statement
5498 Pre-tax retirement plan contributions
 Educator expenses  Teachers can deduct up to $250 per year for our of pocket school supplies
HSA contributions Pre-tax amounts contributed to a health savings account
Premium Health Insurance Payments If self-employed amount paid for health insurance premium
Moving Expenses You can deduct some aspects of long distance moving expenses
Alimony Paid Amount of alimony paid to a former spouse

Tax Deduction and Credits

You may choose itemized deductions instead of standard deductions if your qualified expenses are over $6,500 for single taxpayers ($13,000 for married couples) for the 2017 tax filing. And don’t forget to take advantage of credits to maximize your tax benefits. You’ll need the following documents to capitalize on these.

Deduction or Credit Reason for deduction or credit
1098 Mortgage interest summary
1098-T Tuition expenses
Unreimbursed Medical Expenses Amount exceeds 10% of your AGI
 Child Care Name, address,  and SSN or EIN # of the provider
Charitable Contributions Cash and non-cash contributions made to qualifying charitable organizations
Unreimbursed Work Expenses Ordinary and reasonable and not reimbursed by your employer
Home Expenses Improvements or use of home

Tax Payments

The taxes you pay throughout the year can also impact the amount you owe or are owed. To prepare a 2017 tax return, you’ll need a record of property taxes you paid, the estimated tax payments you made during the year, and the taxes you had withheld from your retirement plan distributions, which can be found on Form 1099-R as mentioned above.

In addition to everything listed above, the Internal Revenue Service (IRS) advises taxpayers to keep a copy of their 2016 tax return and all supporting documentation for a minimum of three years. Doing so will make it easier to fill out a 2017 return this year, and taxpayers using a software product for the first time may need the AGI amount from their 2016 return to properly e-file their 2017 return.

Don’t wait until the last minute to get started. With the clock ticking, it’s better to plan ahead and give yourself ample time to gather all of the necessary documentation. If you have any questions or concerns, feel free to contact us!


Written by Moyan Lu, CPA