Prepaing a tax preparation check list

Tracy Bunner for Standard Examiner writes: To complete a tax return it is necessary to have required documentation available. Amended returns are usually required when information is left off of the original tax return.

Information such as gambling winnings, interest, dividends, withdrawals from retirement funds, W2s received after the return is filed, stock or securities sold and 1099 MISC income. Other information such as Cancellation of Debt (1099-C) is also frequent information left off of the original return.

Since information is usually received at staggering intervals it is important to be sure to have everything available when filing a tax return. It is much easier to submit a complete return than to come up with money when the IRS sends out a CP2000 telling the taxpayer that something was missing from the return.

To help with insuring a complete return is filed, the following is a list of items needed when beginning a tax return.

Income documentation consists of:

• W2s received for wages earned from all jobs

• 1099-INT is for interest received

• 1099-DIV is for dividends earned

• 1099B is for the sale of stock or securities

• W-2G for gambling winnings

• 1099-R distributions from retirement plans

• 1099-MISC for income as an independent contractor, rents or royalties and medical payments received

• SSA-1099 or RRB-1099 for social security and railroad retirement

• Schedule K1 – for partnerships, trusts or S-Corporations

• 1099-G for state refunds and unemployment benefits

• 1099-C for cancellation of debt

• Form 5498 – Health Savings Account distributions

• 1099-S sale of property

Income that needs to be reporte but may not have one of the above forms include, alimony received, income earned from self-employment, and rents from rental property.

Most of the income documentation must be sent out to the taxpayer by Feb. 2, 2015. However, 1099-B and 1099-S must be sent out by Feb. 17, 2015. As you can see the required documents are usually received throughout January but no later than Feb. 17.

Deductions and Credits information should be gathered prior to completing the tax return. This includes mortgage Interest (1098-Mortgage Interest Statement), Child Care Credit, expenses to be taken on either a Schedule A or Schedule C such as charitable donations and job-related expenses. In order to take the Child Care Credit, the name, address, phone number, Social Security or EIN number and amount paid to the daycare provider must be gathered. If taking mileage or work related expenses, documentation to support these deductions are needed.

If taking an education credit a 1098-T is required to report payments made to a qualifying institution. Receipts for books and materials needed to complete the course are also needed.

It is important to not estimate expenses such as mileage, work related expenses or charitable donations. Most audits performed select these deductions to verify the expense.

Another important form needed this year will be the 1095-A which will be sent out by early February to taxpayers who went through the HealthCare Marketplace for health insurance. This form will be required to complete a 2014 tax return.

Having all of the information needed to file a complete tax return will save many headaches associated with amended returns and payments back to the IRS.