5 Things You Must Bring to Your Tax Preparer’s Office

Don't get caught at your tax preparer's office unprepared. See pictures of taxes.
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The American taxpayer has plenty of options for filing income tax returns. If you have a relatively simple tax situation -- you make a modest income, work for someone else, and don't own a home or manage a lot of investments -- then online tax preparation Web sites are a safe bet. The services are inexpensive, quick and guaranteed to produce an accurate tax return. In addition to popular Web-based services like Turbotax, most of the brick-and-mortar tax preparation companies now offer their own online preparation services, too.

But not all tax situations are created equal. What if you're self-employed, manage some rental property, operate a farm or small business, or earn a lot of income from investments? In situations like these, you need a tax expert who can help you maximize your deductions and lower your overall tax burden. Your best bet is to hire an accountant or make an appointment at a local tax preparer's office. These folks know the tax code inside and out and can help you claim all of the deductions, exemptions and credits you deserve.

To guarantee a successful trip to the tax preparer's office, you need to do some preparation yourself. The following is a list of the five major areas you need to consider when gathering W2s, receipts and invoices to bring to the tax preparer's office. Let's start with one of the basics: identification.

5
Identification

You should bring a photo ID to the tax preparer's office to prove that you are, in fact, the person whose name appears at the top of the 1040. A driver's license, passport or military ID should work just fine. But more importantly, don't forget to bring your Social Security card and the Social Security cards of your spouse and everyone you claim as a dependent. If you're married and filing jointly, make sure your spouse comes with you, because he or she will need to co-sign the tax return before mailing it off to the Internal Revenue Service (IRS).

The Internal Revenue Service (IRS) requires a valid Social Security number or individual taxpayer identification number (ITIN) for each tax return. If you were born in the United States or born abroad to American citizens, you can apply for a Social Security number. But even non-U.S. citizens are often required to file federal tax returns. If you were born in another country and live and work in the U.S. as a resident or non-resident alien, and don't qualify for a Social Security number, then you need to apply for an ITIN to file taxes [source: Internal Revenue Service]. Bring your certified proof of identity and foreign status documents to the tax preparer's office and they can help you apply for the ITIN and file your taxes at the same time [source: Internal Revenue Service].

To claim dependents on your tax return, you will need their Social Security numbers as well as their full names and dates of birth. Every year, the IRS sends back hundreds of thousands of tax returns because the names and Social Security numbers on the forms don't match [source: Internal Revenue Service]. So double-check those middle names and match them with the spelling on the Social Security cards.

Speaking of dependents, things can get tricky if you're divorced with children. In general, the custodial parent is the only one allowed to claim a child as a dependent. But the custodial parent can waive that right by signing a release form (IRS form 8332) allowing the former spouse to claim the child as a dependent and collect a Child Tax Credit, too [source: Internal Revenue Service]. Your tax preparer will want to see form 8332 if that's the case.

The next thing you need to bring to the tax preparer's office is proof of every dime you earned in the tax year.

4
Proof of Income
The Internal Revenue Service wants to know where you get your income.
The Internal Revenue Service wants to know where you get your income.
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It's called income tax for a reason. Not only does the Internal Revenue Service (IRS) want to know about every cent you earned at your job, but income from every other source as well: self-employment, hobbies, investments, Social Security benefits, retirement income, sale of real estate and more. Not all of this income is taxed at the same rate and some of it won't be taxed at all. The IRS differentiates between earned income (salary and wages from a job) and unearned income (Social Security and retirement benefits, alimony, interest and dividends, etc.). Your tax preparer will help you differentiate between the two.

In most cases, you will be sent an official income statement from each income source. Earned income is reported as a W-2 from your employer or a 1099-MISC if you are self-employed. Each unearned income source has its own kind of 1099 statement, too, which you should receive as well. Bring those statements with you to the tax preparer's office.

Keep in mind that you may receive income from sources that don't generate official IRS income statements. Foreign companies may not report your income to the IRS, for example. Hobby income is often the same. Decrease your odds of an audit by honestly reporting all income, even that which the IRS may know nothing about.

Here is a partial list of the types of income you need to report. Bring along an income statement, pay stub, receipt, or other proof of income for each source:

  • Income from an employer
  • Self-employment income
  • Foreign earned income
  • Rental income
  • Retirement income from an IRA, pension or annuity
  • Social Security benefits
  • Investment income from sale of stock, interest, dividends, etc.
  • Unemployment benefits
  • Gambling earnings
  • Alimony
  • State tax refunds
  • Royalties
  • Prizes and awards [source: H&R Block]

Once your tax preparer has added up all of your income, it's time to start chipping away at your taxable income with deductions and exemptions. Keep reading to learn what you need to bring to document your itemized deductions.

3
Proof of Expenses

The number one reason for taking your tax return to a professional is to increase your itemized deductions. All taxpayers are allowed a standard deduction. Single filers get to subtract an automatic $5,800 from their 2011 income and married joint filers get to cut twice as much, $11,600, from their taxable income. But a savvy tax preparer, with the help of ample documentation of expenses, can shrink your tax burden even further.

This is why they tell you to keep your receipts. The biggest deductions often come in the form of business expenses. The qualifications for a business expense are flexible enough that a creative accountant can pile up some serious deductions. The same is true for self-employed folks. A home office can be a fertile source of deductions, from the depreciation of office equipment to the Internet service through which you send business emails. But everyone can deduct medical expenses, childcare expenses, and certainly charitable contributions.

Here's a partial list of all of the expenses that qualify for itemized deductions. You will need receipts or other proof to claim each deduction:

  • Self-employment expenses (home office, gas mileage, equipment, etc.)
  • Business expenses (travel, gas mileage, client meals, etc.)
  • Education expenses (that directly relate to your job or field)
  • Medical expenses
  • Charitable contributions (cash and non-cash)
  • Mortgage interest
  • IRA contributions
  • State, local and foreign taxes (income tax, real estate tax, property tax, sales tax and qualified vehicle taxes)
  • Union dues
  • Job-hunting expenses
  • Tax preparation fees from previous year

This list only covers the most common expenses and deductions, but there are other, more unusual situations in which individual taxpayers can claim large deductions. We'll look at a couple of those situations on the next page.

2
Proof of Disaster, Theft and Other Unexpected Losses
If you've experienced a catastrophe, the Internal Revenue Service can help.
If you've experienced a catastrophe, the Internal Revenue Service can help.

Despite all appearances, the Internal Revenue Service (IRS) is not out to get you. In fact, there are several provisions in the tax code designed to help out folks who are victims of unexpected and expensive losses of property or cash.

For example, there are special deductions for people who are the victims of theft. For IRS purposes, that includes blackmail, burglary, embezzlement, extortion, kidnapping for ransom, larceny and robbery. To claim a loss from theft, you need to provide proof that you were the owner of the property and when it was taken from you. You don't, however, have to prove that a conviction resulted from the crime [source: Internal Revenue Service]. If you were a victim of theft, bring all related documentation to your tax preparer. Keep in mind that you must deduct any paid insurance claims from your losses.

The tax code also looks after people who are victims of natural disasters like fires, floods, earthquakes, tornadoes and hurricanes. In fact, there are special exemptions and deductions for people who live within federally declared disaster areas. To qualify for these deductions, you will need to provide your tax preparer with records of the lost property, clean-up expenses and rebuilding costs. You will also need to note any FEMA assistance or insurance reimbursements that you've already received.

Now that all of your deductions have been tallied, it's time to find out if you're getting a refund or paying even more to Uncle Sam.

1
Payment Method

April 15 is not the only day of the year that Americans pay taxes. If you're a wage or salaried employee, then a portion of your earnings are withheld every pay period to cover federal income tax, state and local taxes, and Social Security and Medicare contributions. In fact, when tax day rolls around, 77 percent of American taxpayers (111 million people) get a refund [source: Internal Revenue Service]. After all of the deductions, exemptions and credits are added up, the Internal Revenue Service (IRS) has to pay them back some of the money it withheld during the year.

If you're one of those lucky 111 million, you might want to bring your bank account information with you to the tax preparer's office. Instead of mailing you a check, the IRS can refund your money as a direct deposit to your bank account. All of the necessary information -- bank name, routing number and account number -- can be found on one of your checks.

If you belong to the other 23 percent of taxpayers who owe money to the IRS on April 15, then you should come prepared to make a payment. The IRS is happy to accept your tax payment in whatever form is most convenient: check or money order, credit card, or a direct debit from your bank account [source: Internal Revenue Service]. Remember that if you are married and filing jointly, you will need to bring your spouse to the tax preparer's office, too, because he or she will need to co-sign the tax return before mailing it off to the IRS.

For lots more information on tax returns, refunds and the IRS, see the links on the next page.

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Sources

  • H&R Block. "Tax Preparation Checklist." (Jan. 18, 2012.) http://www.hrblock.com/offices/tax-preparation-checklist.html
  • Internal Revenue Service. "Dependents & Exemptions." (Jan. 18, 2012.) http://www.irs.gov/faqs/faq/0,,id=199708,00.html
  • Internal Revenue Service. "Free Tax Return Preparation for You by Volunteers." (Jan. 18, 2012.) http://www.irs.gov/individuals/article/0,,id=107626,00.html
  • Internal Revenue Service. "General ITIN Information" (Jan. 17, 2012.) http://www.irs.gov/individuals/article/0,,id=222209,00.html
  • Internal Revenue Service. "Publication 547" (Jan. 19, 2012.) http://www.irs.gov/publications/p547/ar02.html
  • Internal Revenue Service. "SOI Tax Stats — Tax Stats at a Glance" (Jan. 18, 2012.) http://www.irs.gov/taxstats/article/0,,id=102886,00.html