1. Take pictures of non-cash charitable contributions and make a detailed list: The IRS may ask for proof of your charitable contributions. Take pictures (no need to print unless asked), make a detailed list of the donations, and attach the list to the receipt. If you don't get a receipt (because you use a drop off location) note the location of the drop box and the name and address of the organization that the drop box goes to.
2. This one applies mostly to online filers: Print a hard copy of your tax return and keep it, and your supporting documents, in a safe place. When you move, these documents should go with you, in your car, and not in the moving van.
3. Update your address with the IRS every time you move: Not getting a notice from the IRS due to a move is no excuse for not responding. If the IRS has issues, they will notify you by mail, at the address on your tax return. In order to use another address, you must file Form 8822. It's simple, easy and IMPORTANT!
4. Have an emergency fund of 3 to 6 months of expenses: One emergency that can come up is an unexpected balance due for a current or prior tax year.
5. Have your tax returns checked by a professional at least every 4 years: If you make a mistake, and leave some money on the table, you have 3 years after that tax season to get it. Software is NOT reliable in providing accurate results. Find an Enrolled Agent or CPA that is an expert at your type of tax return, and ask them to check the return for free, with the caveat that you'll pay them if they find a mistake and you decide you want it fixed. Many will do this.
6. Use a mileage tracking app like Mile IQ if you drive for work or business: We all suck at record keeping, and this is the best way to track mileage. Many cost a small amount, but are worth it.
7. Contact their tax dude before making big decisions that could impact taxes: Before you take money out of your IRA or 401k, for example, call your tax pro to find out what might be taxable, how much to withhold, and how to avoid penalties.
8. Don't take tax advice from non tax professionals: EVERYTHING you hear about taxes is WRONG - until it is confirmed by a competent tax professional. Just ask a few Boeing employees what they think of the advice they got from their coworkers. Your banker is not a tax expert. Your financial advisor is not a tax expert. Your insurance agent is not a tax expert. I don't give investment, insurance or banking advice (at least not without telling you to talk to an expert in that field). Call your tax guy! Or email me: email@example.com (understanding that I might not know enough about your personal situation to give you the detailed advice your tax person could.)
9. Get an 8332 as a non-custodial parent at the time of divorce: If you get divorced, and are the non-custodial parent, you generally can't claim your child as a dependent. If your divorce decree says you can claim the exemption, the IRS will NOT accept that decree as proof (older decrees might be accepted - new ones not). The IRS requires Form 8332 be signed by the custodial parent. I highly recommend getting the 8332 signed at the time the divorce decree is signed, such that it covers all years the divorce decree specifies. (If you are my client and are the custodial parent I recommend NOT signing the 8332 at this time). This situation is complicated, so read my post on Divorce (or buy my book).
10. Buy my Book: Everyday Taxes 2016. Best tax book nobody is buying. 66 chapters covering the most common life events, and their impact on taxes. You can read them BEFORE you do something, and make sure you do it right for taxes.
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