Ready or not…it’s tax time!!

It’s income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta ~ Dave Barry

2011 is history…the holidays are over…the New Year’s begun…

But along with the new beginnings, we are sometimes overcome by the burden of thinking about taxes!!

All those information returns (Forms 1099 and 1098, W2’s K-1’s and the like) begin flooding our mailboxes, and sometimes even our inbox. You need the forms as they are pretty important information, even if you typically wait until April 15 to worry about taxes.

So…what to do in the meantime?

Avoid the dreaded April 14th scramble by keeping all of your tax information for the year in one place. Have a clearly marked folder or box,into which you put all of your receipts, end-of-the-year bank statements and charitable donation forms as you get them. Divide the folder into categories like business expenses, charitable donations and office supplies to make everything easier to find later.

For you tech savvy folks, another option is to scan all of your paperwork and keep it in a file on your computer. This will take a bit more up front time, but could make it easier to get all of your tax info to your tax pro.  And for your iPhone addicts, yes, there ARE apps for that!

By early February you should have all your tax statements from your employer (if you have one), bank, investment or brokerage firm and any other institutions that handle your money. They are required to put your statements in the mail by January 31 (or the following business day if it falls on a weekend).

Depending on your tax situation, you can expect to receive any of the following:

• K-1: These forms report income from a small business, partnership or trust.
• W-2: This form from your employer shows how much money you made, tax and other deductions (including Social Security and Medicare) that your employer held from your paycheck, as well as your contributions to retirement plans, medical accounts and child care reimbursement plans.
• 1098: Your mortgage lender sends this form detailing your mortgage interest payments for the year (provided that you paid at least $600 in interest).
• 1098-E: This form details your student loan interest payments, if your interest is at least $600.
• 1099: If you’re an independent contractor, you’ll receive one of these forms showing your income from each of your clients.
• 1099-B: Your brokerage company will send you this statement of your investment account, as well as statements indicating when you bought and sold stocks, mutual funds or other securities.
• 1099-DIV: This form reports your earnings from stocks and mutual funds, including dividends and capital gains distributions.
• 1099-G: This form is your unemployment benefit statement.
• 1099-INT: This lists the interest income you received from your bank from your checking, savings and other accounts, if applicable.
• 1099-R: If you’ve taken a distribution from your pension or retirement account, you’ll receive one of these statements.
• 1099-SSA: This is your Social Security benefit statement.

It’s also a good idea to use a checklist or other tax organizer as you pull together your paperwork for  your tax pro.

Get your copy of our FREE Tax Organizer HERE.

For IRS recordkeeping requirements check out IRS PUB 552 HERE.

Feel free to leave your comments or questions below, and as always…

Thanks for reading BillOnBusiness.net!

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