Getting ready for tax preparation: Helping your accountant help you

Now that 2013 is underway, there is one pressing issue to which we all must pay attention. We need to take care of our taxes. Some people think of tax season as a time to be dreaded each year, but luckily for you, we CPAs love tax season! Here are some pointers to help you get ready for this daunting task.

Step one: As official documents arrive, put them somewhere safe. If you aren’t sure what you need, save everything and ask your tax adviser when you meet with him or her. If you used a professional tax preparer last year, you can probably expect to receive an organizer from him or her if you haven’t already.

The organizer you receive can be a key resource to help you organize your information. Usually the organizers start with a list of questions. Don’t get overwhelmed by them. Typically this list contains general questions that are provided to everyone and that are not specific to your situation. If you don’t understand something, just note the question and move on. We are happy to go over these questions, as well as others, with you when we meet or go through your documents. Answering the questions, however, is critical to us. Each question is designed to lead to additional questions, when you have indicated that a change has occurred in your life.

Here are some of the most common pieces of missing information/problems we see at tax time:

Any life changes? Did you get married, divorced, have a child, have a child who became an adult, change jobs, or retire? These might be questions that seem obvious to you, and your tax adviser might be aware of these changes, but make sure you remember to give your adviser this information just in case it slips his or her mind in the heat of the busy season.

Non-cash charitable donations. You need to have supporting documentation (organization name and address, date of donation, specific/detailed description of items donated). Be sure to include these.

Mileage/employee business expense. All expenses need to be reasonable and necessary and sufficiently documented. Remember the five Ws from elementary school: who, what, where, when, and why.

Cost basis for stock sales. If you sold stock during the year, make sure that you have the cost for the shares sold. Although the new rules require that if stock was purchased during 2011 or later the cost basis will be included on the 1099, brokers are not required to provide this information for earlier purchases when they haven’t been given that information. If the 1099-B statement that you receive doesn’t show the cost of the stock you sold, contact your broker to see if he or she has that information for you. If not, you might have some digging to do.


Prepare your questions. There is no such thing as a bad question. As you gather your documents, make a list of questions that you have regarding any documents that you put together. It helps both you and the tax preparer to address questions upfront so that you aren’t surprised with the results once your return is completed.

Organize your documents the best that you can. If you have a number of cash charitable contributions, add them up if you can. Group business expenses by category or list items in an electronic spreadsheet/database document and bring in the file so that we can sort them in the order required for the tax return preparation. Paper-clip similar documents together and label them if not clearly evident.

Be prepared to discuss next year. We need this information to best assist you. Our goal is to help you prepare an accurate tax return, paying the least amount of taxes that you are obligated to pay. We offer our thoughts on ways to minimize the tax obligation and offer suggestions for the following year.

Remember, we love what we do and take great pride in doing it well. Your questions are always welcome.

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