Tax Season Is Here – You Ready?

Believe it or not, tax preparation still sneaks up on some people. Even though Tax Day falls on or about April 15 every year, many find themselves scrambling to gather all the necessary documents and sometimes forgetting about others – which could result in more tax savings, or raise an eyebrow of an Internal Revenue Service employee. Whether one uses tax software to file, or hires a tax professional, having all the documents in order and at the ready can save a lot of headaches – and potentially multiple trips to the tax preparer’s office.

Here’s a quick and easy list to keep at your fingertips for filing ease. And if you’ve already filed this year, there’s always next year …

A Basic Checklist

– Start with gathering information in one spot. Use a shoebox, large folder or envelope marked “Tax Documents” to hold every piece of information needed to prepare a tax return. If you’re not sure what documents may be needed, review the prior year’s tax return.

– Collect wages ( W-2 forms), interest and dividend statements (1099-Int and 1099-Div) and brokerage account forms (1099-B)

– For stock sales, determine if you have the cost basis (if not disclosed on the brokerage statement) and acquisition dates to accurately compute gain or loss from sales

– If self-employed, summarize business income and related expenses to arrive at a net self-employment income. Again, use the prior year tax returns schedule as a guide

– For rental property, summarize the rental income and related expenses (utilities, taxes, insurance, mortgage interest and repairs) to arrive at a net rental income or loss

– For flow-through entities (S-corporations, partnerships, limited liability companies, trusts or estates), make sure to include Schedule K-1 reporting documents

– For retirement, annuity or social security income, include the form 1099-R or Social Security Income reporting form

– Gather up all miscellaneous income (prizes, gambling winnings, miscellaneous payments). If you receive a reporting document such as a form W-2G or a 1099-Misc, report this income as it is being reported to the Internal Revenue Service.

Itemizing Deductions

If you plan to itemize rather than take the standard deduction, the information-gathering process grows exponentially.

– For your medical expenses, summarize out-of-pocket costs for insurance, doctor visits, prescription drugs and other medical costs. Tip: Contact your pharmacy to request an account summary detailing prescription costs

– Provide copies of paid real estate taxes on home and investment properties.

– If a “big ticket” item was purchased during the year (car, boat, appliance) , compare the actual amount paid to the standard amount allowed for sales tax based on income.

– Include in the folder any mortgage interest statements received on your primary residence, second home, motor home or investment properties.

– For gifts to charity (both monetary and non-monetary), keep the receipt from the charity. The IRS requires a copy of the donation be retained to substantiate the donation claimed on the return. Special rules apply to non-cash donations above $500 and an appraisal is need for non-cash donations above $5,000. The key here is to have adequate documentation from the charity to support your claim of a deduction.

– Place any other miscellaneous itemized deductions, gambling losses, investments fees and safe deposit box rental, unreimbursed employee business expenses (such as meals, tolls, travel and supplies) and union dues in your tax file.

– If you received an inheritance during the year and received income-producing assets, such as interest bearing accounts, investments or pension, compile all those associated documents.

If you are working with a paid income tax preparer, that individual will normally send out a tax organizer right after the year-end. This is a helpful guide which generally includes several pages of questions covering your filing situation. The Tax Organizer will also include prior year information to help you efficiently gather up your tax information for the preparer.

The goal is to have as much tax information in one place as possible to avoid a last minute rush to prepare your return, and hopefully reduce some of the stress related to filing taxes and avoid mistakes or errors along the way.


Chris M. Bott, CPA, CVA, MST is the president of Bott and Company, P.C., a Traverse City certified public accounting firm specializing in tax and business consulting services for individuals and closely-held businesses as well as succession and estate planning. With more than 30 years of experience as a certified public accountant, Chris also holds the additional designation of certified valuation analyst. He can be reached at