Tax Organizing Cheat Sheet

It’s tax season! In less than two months, one way or another, you’re going to do what needs to be done to stay out of tax jail.  

The first thing to do is to make a folder that says “Tax 2021” — either on your computer or a manila folder — and then put the following in there: 

• 1099s; K-1s; IRA distributions; if you’re a business, your Profit and Loss report and your Balance Sheet.
• A list of all your expenses plus any charitable contributions that are tax deductible.
• The records for any charitable contribution over $250. 
• If you pay dues to a religious organization, figure out your year-end total because that is a tax deduction. A lot of people don’t realize that, but I’m here to tell you that dues for any religious organization are definitely tax deductible.
• Records related to gambling wins and gambling losses — if they are wins they count as income, if there are a lot of losses, you can write them off. 
• Documentation of any debts that were discharged, because the IRS actually counts that as income.

It’s ideal to get everything to your accountant as early as possible. I highly recommend using an accountant for one reason: they are up to date on all the new tax laws. A lot of people try to do it on their own, which is probably okay if you only have a W-2. If you’re a freelancer, or just have a lot of other tax stuff, you definitely need an accountant. 

We can help. If you haven’t been tracking all year, we’re happy to help you put that all together. Recently our lifestyle division helped a client gather all her documents together and fill out her tax organizers for her, because taxes can be a little overwhelming for a lot of people. Contact us to learn more.