| In six short weeks, whether you like it or not, your tax | | | | form in a pocket titled "Deductions." |
| return is due. There's no reason tax time has to be a | | | | March 17: Set Aside Proof of IRA Contributions & |
| stressful flurry of last-minute preparations capped off | | | | Check Deduction Allowances. In 2008, individuals under |
| with a sprint to the post office (or accountant). If you | | | | the age of 50 were allowed contribute $5,000 to their |
| take a few little steps each week, you'll be pleasantly | | | | IRA accounts, and those over 60 were allowed to |
| surprised at how much easier it all comes together on | | | | contribute $6,000. Gather either cancelled checks or |
| April 15th. But, unless you're a financial-type, you may | | | | account statements as proof of your contribution. |
| not be sure how to break down such a daunting task. | | | | Then check here for information on how much you |
| That is why we've put together this tax prep schedule. | | | | can deduct. Make a note of it and keep it with your |
| Although it may seem like a lot of steps, the average | | | | proof of contribution. Put both the proof of |
| "appointment" on the following list should take you no | | | | contributions and the amount you can deduct in the |
| more than sixty minutes to complete - and many may | | | | pocket named "Deductions." |
| take less than five. Stick to this schedule and you'll be | | | | March 18: Gather Relevant Work-Related Receipts. If |
| more likely to make it through this tax season gauntlet | | | | you spent money on anything related to work, like a |
| mistake-free and with sanity in tact. | | | | uniform or a computer, but were not reimbursed by |
| March 8: Book Time With Your Accountant and Buy a | | | | your employer for the expense, it is deductible. If you |
| Tax Organizer. If you are going to work with an | | | | are self-employed, many of the things you use to |
| accountant to prepare your taxes, and you haven't yet | | | | conduct or promote your business are deductible, such |
| met this year, call her today and make an appointment | | | | as: computers, phones, utilities, and office supplies. |
| to meet to review your return in about four weeks. | | | | Gather all relevant receipts. If you are unsure whether |
| Get yourself ready to wrangle all of the necessary tax | | | | or not an item is deductible, set it aside in a pile with a |
| paperwork by buying an accordion file, like the Tax | | | | question mark. Total the amount spent on items you |
| Filer, or a plain one with at least 10 pockets from an | | | | are sure you can deduct, note that on a piece of |
| office superstore like Office Depot. | | | | paper (or spreadsheet that you print out), paper clip it |
| March 9: Locate Last Year's Return. The best place to | | | | to the set of receipts associated with those items, and |
| start your tax prep work is with last year's return. | | | | put into the folder marked "Deductions." |
| Why? Because it will serve as a cheat sheet for this | | | | March 21: Gather Records for Charitable Deductions. |
| year's return. Most likely everything you put into last | | | | You can take deductions for money and goods |
| year's return you are likely to need again this year. So, | | | | donated to charities. However, you must include the |
| make a list of all income sources and every itemized | | | | receipts detailing the amount of money and/or items |
| deduction to serve as your master checklist for 2009 | | | | you donated with your tax return. Check with the IRS |
| returns. It will also tell you if you have a carry-forward | | | | to see what documentation is deemed necessary for |
| or how you treated certain income before. Once you | | | | monetary and physical goods and gather those today, |
| find it, make a copy of it and put it in your accordion file | | | | along with any pictures you might have that |
| in a pocket marked "2008 Return." | | | | substantiate the value of physical items given. Place |
| March 11: Gather Social Security Information. You will | | | | them in the pocket marked "Deductions." If you realize |
| need the social security information for any | | | | that you forgot to get a receipt for a particular |
| dependents claimed on your return, and your spouse if | | | | donation, contact the organization to get the |
| you are filing jointly. Gather that information now so | | | | necessary paperwork. |
| that you aren't running around like a chicken without | | | | March 22: Gather Proofs of Purchase of Energy |
| your head at the last minute. Put that in a pocket | | | | Efficient Goods. The federal government and the IRS |
| named "Dependents." | | | | want to promote energy-efficient consumption. If you |
| March 12: Gather Your W-2s and Work-Related 1099s. | | | | purchased energy-efficient vehicles or items that |
| Most employers will have sent employees W-2 forms | | | | make your home more efficient, such as solar energy |
| and independent contractors 1099 forms by the end of | | | | systems, insulation, hot water heaters, boilers or |
| January. These documents detail the amount of | | | | thermostats, you may qualify for tax credits. Gather |
| money you earned during the previous year and the | | | | your proofs of purchase and put them in a pocket |
| amount of taxes withheld. Review all documents you | | | | marked "Energy Star." |
| have received to be sure that they are accurate, total | | | | March 24: Gather Receipts for Medical Co-Payments. |
| the income earned and taxes withheld on a separate | | | | While the cost of insurance deducted from your |
| piece of paper and then put that along with the forms | | | | paycheck is generally not deductible - any doctor or |
| in your file under a tab named "Income from Work." If | | | | hospital bill that you co-paid throughout the year is |
| you are missing one, contact the employer immediately | | | | deductible and should be itemized on your return. |
| to get your copy. | | | | Gather all receipts, add them up, note the total on a |
| March 14: Gather Forms for Investment Income and | | | | separate slip of paper and file in the pocket marked |
| Interest Earned. Investment firms will send out 1099-B | | | | "Deductions." |
| form to you, typically by the end of January, detailing | | | | March 28: Draft Your Returns. Now that you have |
| stock and bond trades you made throughout the 2009 | | | | gathered relevant documentation, actually filling out the |
| tax year. For each security sold, look up its cost basis | | | | tax forms should be more straightforward. Print out a |
| and note whether you held that stock for more or less | | | | set of federal, state, and local forms, grab a pencil and |
| than a year. Then calculate your total capital gains tax | | | | do a "rough draft" tax return. Don't worry about |
| liability using a calculator like this one we found on Also | | | | obsessively double-checking. Just fill out what you can, |
| gather any K-1 forms from partnerships, statements | | | | highlighting areas in which you have questions. |
| from banks/brokerage firms detailing interest income | | | | Week of March 29: Meet with Your Accountant. |
| earned, and records of rental income or other | | | | Review the draft returns that you have prepared and |
| supplemental income. Tally the net supplemental | | | | show the relevant documentation. Ask questions. Get |
| income earned on a separate sheet of paper and put | | | | direction on how to revise, or hand the returns to the |
| it with the tax documents in a pocket titled "Capital | | | | accountant to finalize. |
| Gains." | | | | April 4: Proof Your Return. Nobody but you is |
| March 15: If You Sold Your House This Year, Gather | | | | responsible for signing off on the final document. Go |
| Proof of Deductible Home Improvement Expenses. As | | | | back through your drafts and double-check all of the |
| long as you have proof that you incurred home | | | | figures and relevant back-up. The most common |
| improvement expenses, you can deduct them from | | | | mistake the IRS finds is miscalculated totals. Be sure to |
| the original basis of your home when determining the | | | | correct any mistakes. |
| taxable capital gain. Check with the IRS or an | | | | April 8: Fill In Your Final Return and Send. Put all backup |
| accountant if you are unsure which expenses are | | | | documentation back in the accordion folder, label the |
| deductible. Put the net income earned from the sale of | | | | outside of the folder 2009 Tax Year, and put away in |
| your home along with all relevant documentation in the | | | | a safe place. You will need to hold on to it for 7 years |
| folder named "Capital Gains." | | | | in case you are audited. As an alternative to snail mail, |
| March 16: Gather 1098 Forms for Deductible Mortgage | | | | consider filing electronically, as you will get your return |
| Interest. Your mortgage company will provide you with | | | | much more quickly. In the months ahead, use the |
| a 1098 form detailing the interest you've paid on your | | | | second accordion file that you purchased to keep the |
| loan throughout the year. Highlight the total interest | | | | receipts for the 2010 tax year organized from the |
| amount paid and double-check that against your | | | | start. |
| mortgage statements for accuracy. Then file the 1098 | | | | |