In this week’s episode, I discuss the last minute scramble to get the information needed to complete your tax return before the October 15th extension deadlines.
For most people, the information needed to complete the tax return is fairly simple. However, there are those taxpayers who wait until the last possible minute to complete the tax return which us the tax preparer along with broker advisor scrambling to pull the information together from the taxpayer.
Here is my list of the ten things that a taxpayer is usually scrambling for to finish their tax return preparation.
1. Partnership, LLC (Limited Liability Company), Trusts, Estate K-1s
The taxpayer will sometimes find themselves trying to find that K-1 they may or may have not yet received. While the IRS receives K-1 with the tax return(s), sometimes the taxpayer forgets to forward that information on to the tax preparer. Additionally, the taxpayer may have a new investment in a partnership or LLC.
2. Charitable Contributions - Taxpayers will sometimes need to locate the cash and noncash charitable contribution(s) receipts and letters that they’ve given during the tax return year.
3. Medical Expenses - Taxpayers will bring in dental, medical, doctor, hospital, long-term care insurance, health insurance, eye care, assistance care living expenses to itemize on Schedule A.
4. Property Taxes - Although most local governments have websites for you to view property taxes paid during tax year to itemize during the tax year, there are still a few local governments agency that do not. Sometimes, we can find this information on the Form 1098 Mortgage Interest Statement.
5. Rental Income and Expenses - Rental income and expense will sometimes be one of the last pieces of information that we the tax preparers are waiting on. Additionally, some taxpayers may add a rental property or sale one of the property to their rental property portfolio.
6. Estimated Tax Payments - When it comes to estimated tax payments, tax preparers need to know whether or not an estimated tax payment was made.
7. Schedule C Income and Expenses - Did the have business income and expenses to report on Schedule C?
8. Child care credit - In order to complete the Form 2441 for Child Dependent Care, tax preparers need the child care provider, taxpayer id, address, amount of child care expenses.
9. Gain (Loss) Basis - Brokerage statements will sometimes not report the basis in an investment that the taxpayer has sold. Without the basis, the investment’s sales proceeds becomes all taxable income. Basis is the amount (cost) that you paid for the investment.
10. Post mark the paper tax return before October 15th - October 15th is the extended deadline to file an individual tax return. For the majority of tax preparers, we are required by the IRS and the States to file the taxpayer’s tax return electronically unless the taxpayer opts out of electronic filing.
If mailing the tax return, I normally recommend sending the tax return by certified mail and/or return receipt. It’s not required but if you’re mailing the return on October 15th, certified mail and/or return receipt is proof of mailing.
