Tax Time-Ten Tips to Get Organized

Wicker Park Bucktown Chamber of Commerce - Friday, March 30, 2012

The following blog entry was contributed by: Albert Spenadel, CPA, MST, owner of Spenadel Tax and Accounting Services. He can be reached at alspenadelcpa@comcast.net.


The filing deadline of April 17 is almost upon us.  Here are few tips to avoid the last minute panic.

  1. Review your prior year return. (2010)  Look and see what W-2s, 1099s and Mortgage Interest Form 1098s that you need.  See if you filing status or sources of income have changed.

  2. If you use an outside CPA, attorney or tax preparer to prepare your return, ask for an organizer.  It lists all the forms (W-2s, 1099s, etc.) that you had last year.

  3. If you are self-employed or have a rental property, using a computer program such as Quicken can easily track and categorize your income and expenses.

  4. If you have stock, bond or other investments, be sure you have the most recent 1099 issued.  Most of the time an original 1099 is issued by a brokerage house, but then a second or even third “Corrected 1099” is issued. Watch the dates on the statements. Keep a separate folder for these 1099s.

  5. If you own stock in an S-Corporation or LLC, are a partner in a partnership or a beneficiary in a trust, make sure you have all the Schedule K-1s before preparing your return.

  6. Keep track of your deductions, such as charitable contributions with donation letters from charitable organizations and out-of-pocket, or unreimbursed medical expenses.  Don’t forget your real estate tax bills, if not paid out of escrow with your mortgage.

  7. If you use your car for business, be sure to keep a daily log, or at least a calendar, that you can track your business mileage.  Keep all receipts for business expenses as backup.  For each type of expense, use a manila folder and a small envelope for those small cash register receipts.  Get an annual statement from your credit card company that tracks most of your expenses by category.

  8. Make sure you get letters from child care providers for the expenses paid.

  9. If you use a tax advisor and are unsure whether an expense can be deducted, bring it to their attention. The worst thing a tax advisor can say is “No.”  Tax advisors are human and not mind readers.

  10. Finally, if you will not have all of your information to file your tax return by April 17, 2012, then you can file an extension, Form 4868 and give yourself six months until October 15 to file your tax return.  However, you must pay 100% of your tax due by April 17, so try to make a good faith estimate.  The IRS can disallow an extension if they determine you did not make an attempt to pay, when you knew a big balance due is owed.  For Illinois, you can file the Form 505-I or go online to the Illinois Department of Revenue website and make a payment there.

For more information, consult your tax advisor or see irs.gov and tax.illinois.gov.



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