Basically, there are thirteen categories of items that a tax preparer will organize for the tax return. Below is the tax season checklist:

1. W-2; (if you have worked for someone else and must pay you before the second week of January)

2. 1099 of all brokers, lessors and contractors;

3.1099 from all institutions that reflect interest and dividend income, stock information brokers, mutual funds, and in particular 401 (k) distributions and IRAs (these can be easily overlooked, never sent or filed in the wrong place as that arrive well the next fiscal year) and mortgage interest declarations (usually also on your December 31 return);

4. W2-P or 1099-R for pension and annuity income;

5. Schedule K-1 if you are involved in partnerships or S corporations;

6. 1099 and year-end statements for unemployment compensation, Social Security income, and state tax refunds or taxes paid;

7. Contracts for the purchase and sale of equipment (to be depreciated or accounted for as expenses);

8. Declarations of guarantee deposit for the purchase and sale of property;

9. Confirmations from charities for donations of $ 250 or more and / or written receipts from charities or bank records for donations of less than $ 250;

10. Unreimbursed expenses for nights away from home and the number of nights away from home to qualify for the daily deduction currently at $ 59 per night and eighty percent deductible;

11. Separate business expenses by category, such as fuel, repairs, tolls, supplies, hired labor, tires, insurance, telephone, faxes, copies, postage, travel, moving, small office machines, tools, additives, cleaning, any personal non-food items, truck / car washes, association memberships, licenses and special equipment;

12. Contributions to IRA, or SEP, contributions to simple IRA, Keogh and / or UNI 401 (k) plans. Contributions to these plans can be made until April 15 of the next year, as long as the plans are in effect from the previous year.

13. Other taxes paid, such as estimated (usually paid quarterly), property, sales, road use (2290), county, state, local, and capital gains tax.

There are two ways to calculate vehicle deductions. One is calculated per mileage, which will require a log entry per use or trip. The other is depreciation calculated from the percentages dictated by the IRS. Always remember to include interest paid on a vehicle contract even after depreciation is calculated if depreciation is the method of choice. Of course, the method that maximizes the commercial vehicle deduction from gross income would be the method of choice.

Some people make a spreadsheet and record all of their entries on their computer. Others use programs that classify their expenses for them and spit them into a tax program. Some diligent people will staple their receipts in a particular category along with their calculator tapes. Then there are those who do well to toss their receipt in a shoebox and let their wives sort them.

Just remember, the more you do, the less it will cost. Also, if you keep an eye on things, you will always be up to date on your tax situation. And always, always do it early!

Isn’t it wonderful how easy this all seems when broken down into categories? You are knowledgeable about what accountants, CPAs, the IRS, tax attorneys, and bankruptcy courts are looking for well in advance.