You are so focused on what you are buying the kids for the holidays that you are not even thinking about taxes, right? Actually, you should be thinking about taxes all year long. In fact, except for your W2's that your employer sends in January, you could have absolutely everything else you need for tax season right at your fingertips. Then you can just hand the folder off to an accountant at a tax services office, or scan and download everything into a tax program from accounting software. Here is a checklist of what you should have so far:
1. Receipts from Charitable Donations
This includes receipts for donations of clothing and other household goods. It does not have to be just monetary donations, although you should definitely have receipts for those as well. The more you give, the less you pay in in taxes or, the bigger your refund will be. Give till it hurts; get and save the receipts.
2. All Medical and Dental Receipts
If you had at least $10,000 in dental and medical expenses last year, you could get a tax credit for this. Save all of your receipts, including your co-pays for doctor office visits and co-pay receipts for medications. Tally them up. If it looks like you are going to hit the ten grand mark for sure, put the medical receipts in your tax folder or enter them into your accounting software.
3. College Tuition Payments and Interest
If you are paying for college for your grown child or for yourself, save the receipts for payments made for tuition. If you took out a loan (or loans), save the receipts that reflect the accumulated interest. Both are tax write-offs when you pay for your college education.
4. Receipts for the Renewal of Your Car Title and Registration
If you own at least one car, you should be renewing the license and registration every year. Save the receipt from this, as this too is a tax write-off. This should go to your tax file right after you get the receipt so that you do not forget it.
5. Investment and Banking Statements
Save and download your monthly banking statements. They reflect the amount of interest you have accumulated through the year. Additionally, any fees that you incur as a matter of doing business are going to be on your banking statements. Both have to be entered and reported to the government on your taxes.
Likewise, investments you have made during the year have to be recorded. This is especially true if you made a profit. Some are tax-exempt, but the government will still want to see that. Contact a company like Balkcom Pearsall & Parrish CPA's PA for more information and assistance.