Tax season is around the corner. Ideally, you should have started preparing for your taxes a month ago. But it is not too late, as you still have a few weeks at your disposal. We understand that preparing for taxes is not an easy job, as it requires a lot of work. To make matters easy for you, we have devised a checklist for your tax preparation.
Remember that this is just a beginners’ checklist to put things into an order. Practically, you may need a few more documents/ data to complete the process of filing taxes with the IRS.
So, let’s get started with our tax preparation checklist for North Hollywood, CA. This checklist may be useful for other parts of the states as well.
Tax Preparation Checklist For North Hollywood, CA
1: Personal Information
To get started, you need to provide the IRS with all the required personal information. You need to tell the taxman who is filing the return, and everyone who is covered in the tax return. Hence, you need to be able to provide names, date of births and social security numbers for you and your dependents.
2: Your Income
Nothing surprising here as you are filing your income tax returns. Specific income-related information may vary from person to person, as circumstances differ. However, here is a list of some of the most commonly required documents and data about one’s income.
- Your and your spouse’s W-2 form. It provides information about income earned from jobs.
- Different 1099 forms, if you earned income from investments.
- Taxable alimony received.
- Documents and data about any income received from business activities. This may include statements of profit & loss and capital equipment.
- SSA-1099 for social security benefits.
- Distribution of office and home expenses (and office-house size ratio), if you use a portion of your home as an office.
- Income and expenses related to rental properties.
- Any other misc. income, such as scholarships, Medical Savings Account and gambling.
You are not liable to pay taxes on all of your income. A range of qualifying expenses/ contributions made during the year can help reduce your net taxable income. Following are some of the common tax adjustable expenses that you should be aware of:
- Contributions into a Medical Savings Account.
- Various self-employed pension plans.
- IRA contributions.
- Interest paid in respect of student loans.
- Tax deductible alimony paid during the period in question.
- Payments related to health insurance premium (for self-employed individuals).
- Moving expenses.
4: Tax Credits and Itemized Tax Deductions
Similarly, the federal government also offers various tax credits and deductions to minimize tax burden on deserving individuals and families. Following are some commonly available tax credits and deductions:
- Child care costs.
- Adoption cost.
- Home mortgage interest paid – 1098 form.
- Form 1098-T – Education cost.
- Charitable donations.
- Medical expenses.
- Energy credits.
- Union dues and reimbursed expenses to employees (such as travel, uniform, education, seminars and supplies etc.).
5: Taxes Already Paid
Some taxes are deducted at source, for example when receiving salary. These taxes are, then, adjustable at the time for filing tax returns. Be advised to keep track and documents of all these taxes, as they help in greatly minimizing annual tax liability. These may include state taxes, personal property taxes and real estate taxes already paid during the year.
Last but not the least, you may also want to consult a professional tax accountant in advance to know about other data and documents that may be relevant in your particular case.
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Zee Maq is a content writer who specializes in writing business and finance content. She has nine years of experience and loves to provide problem-solving content to help people tackle challenges in their everyday lives.