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What to Take to Your Tax Preparer

Greg Bocquet

Taxes are a tricky and complex business for most Americans. Whenever you buy something big or send someone to college, it seems like there's a new form, a new receipt or a new statement to consider. Plus, there is the fear of being audited to add to the stress.

Jennifer Rempe, senior tax analyst for the Tax Institute, the research arm of H&R Block, says that while about 1% of all tax returns are audited, most of them are "correspondence audits" in which the IRS sends a letter asking for clarification of a certain piece of data. Such audits are almost always easy to resolve with the proper paperwork and having your documents in order can have other benefits too. You will lower your tax burden through maximum deductions, get your refund faster and save on the time needed to prepare your return. Plus, you will already have all of your documents ready to resolve any issues that arise.

Read on for the essential documents that everyone should bring to their tax preparer to save the most money they can.

Your Taxes Are Yours Alone

Even if someone else fills out and files your forms, no one but you will be liable for the information. Problems with the tax return go to the taxpayer, not the accountant or whoever signed the forms.

"If the tax preparer relies in good faith on the information the taxpayer provides for them, they can't be held responsible," Rempe says.

Bottom line: If you don't give your accountant the right forms, you won't get the right deductions.


Last Year's Tax Return

Whether you are an experienced record-keeper or just beginning to get organized, you can probably find a copy of last year's return somewhere, and it may be the most important thing you can give your tax preparer.

Other than all the Social Security numbers, names of dependents and addresses of property that are necessary for informational purposes, last year's return is a good blueprint for your tax preparer to follow. It will help him or her see what credits you have previously qualified for and identify red flags when the information is inconsistent.

Rempe agrees: "Barring serious life events, last year's tax return gives a good idea of what your tax burden will look like this year," she says.


If you work full-time, chances are you have taxes withheld from every paycheck to cover your tax burden for the year. If so, your employer will send you a W-2 form by Jan. 31 reporting your total income and the total amount that you have already paid in income, Medicare and Social Security taxes.

For people who had more than one job as a regular employee, each employer will send a W-2 to detail your pay. Unfortunately, if you moved during the year your former employee might not have your current address and your W-2 may never reach you. But keep in mind, your Social Security number didn't change, so while the IRS will know how much you made, employees might need to call their former employers to ensure they get their tax forms in time.


Simply stated, 1099 forms are issued for all additional income that has not yet been taxed.

Freelancers and temporary or contract workers typically don't have their taxes taken out at the source. Instead they are paid per job, often by multiple employers, and are responsible for paying the appropriate taxes on that income. Instead of a W-2, this income will be reported on a 1099-MISC form, which is considered "additional income."

Because these forms can often come from a variety of employers, it's important for all freelancers or contract workers to track down their 1099s themselves. The IRS will not accept an "I didn't get my 1099" excuse if it audits your return, meaning you'll still have to pay taxes on the amount, along with an additional penalties.

1099s also report dividends from stocks or mutual funds (1099-DIV), or interest earned on savings or other bank accounts (1099-INT), as well as a few others.

Unemployment Forms

Last year was tough for Americans: Many lost their jobs, and many more had trouble finding new ones. With so many people receiving unemployment benefits last year, President Obama was even forced to agree to tax cuts for people making more than $250,000 a year to get Republicans in Congress to approve an extension of unemployment benefits.

Though it's a federal program, unemployment assistance is administered by state governments, and of course all of them do it differently. Some states automatically withhold taxes from unemployment payments (because unemployment income is taxable) and others don't. And some states automatically provide year-end information on a 1099-G form, and others don't.

To ensure you get the assistance you need, Rempe of H&R Block recommends contacting your state's unemployment office, because simple bank statements showing your unemployment checks won't do.

"Since different states do it differently, the amount of your checks doesn't tell you all of the information," she says. "If your state sends you paper checks, keep the last pay stub of the year to get year-to-date information. If they don't, you should call them and ask for a year-end summary."


Are You a Schedule C or Schedule D?

Instead of spending 80 hours a week hustling for jobs last year, many frustrated Americans took to sites like eBay or Craigslist to make some extra cash. There are a couple ways this can affect your tax reporting, but remember that anything that you sold for a loss does not need to be mentioned on your taxes.

Conversely, if all you did was sell the contents of the attic or your dad's garage that you finally helped him clear out, then any money you made (meaning items you sold for more than their original selling prices) must be reported on Schedule D, a form that is submitted with your individual tax return.

If what you did was a little more organized -- you bought things at local garage sales and flea markets so that you could flip them and make money -- then you'll need to report the profits (and expenses) of your little operation on a Schedule C form. If your net profit is more than $400, you will need to pay the self-employment tax.

Rempe says the difference is all about intent. Since the distinction is vague, though, best practices apply: Save your receipts and be prepared to document the price at which you bought something.


Now that all your income is accounted for, it's time for the fun part: expenses, deductions and credits. This is the part of the tax process -- if you prepare your returns -- where you can watch your base taxable income drop and expected refund rise with every step. So satisfying!

1098 forms cover the specific tax-deductible expenses that the government forces some institutions to report. If you paid tuition to attend college, or for a child in school, you will receive a 1098-T in the mail to document tuition expenses.

If you are a homeowner, your mortgage lender will send you a 1098 that details the mortgage interest you paid (which is deductible) and the real estate taxes you paid last year.

If you made a contribution to charity, the organization will send you a 1098-C detailing the amount of the contribution, or the monetary value of a vehicle or other goods you may have donated.

If your student loans accumulated at least $600 in interest during the year, your lender must issue you a 1098-E to document the exact amount of interest added to your loan balance, because that is also deductible.

All of these documents are issued to you, the taxpayer, so if you do not collect them (which may sometimes mean making a phone call to the charity or school to provide them with the current address), then your tax preparer will not be able to claim the appropriate deductions for you.

Taxes on Personal Property

Just as the government likes to support homeowners by offering them a range of credits and deductions, it also has provisions for people who make other large purchases, like buying a car, boat or mobile home.

These purchases involve expenses that aren't charged at the point of sale, known as personal property taxes, which are deductible from your income taxes. These charges most often refer to the license plates on your car, or the registration fees for your boat, for example, that are collected by someone other than the dealership.

While you should keep receipts for any big purchases, make sure to also keep records of your registration fees and bring them to your tax preparer. This also goes for old vehicles, which might also grant you a big deduction.

Home Office Receipts

With more people freelancing, blogging and otherwise working from home, maintaining a home office can be a huge expense. Consequently, the IRS respects the needs of taxpayers who work at home, but imposes some strict conditions to ensure they don't take advantage of the system.

First, a home office has to be used exclusively for business to qualify as a home office at all. If a computer is used half the time for work, you can't simply claim half the related expenses. A space that has personal as well as business uses is not a home office (for tax purposes), although a small desk or table in a corner of your living room used only for business IS considered a home office deduction.

Once you have established exactly what your home office includes, then you can start deducting. If your home office takes up 20% of the home or apartment you live in, then you can claim 20% of your rent and utilities as expenses for your home office.

Job Search Receipts

Just as many people are working from home, a lot of people are still looking for jobs, and sometimes the accompanying costs of a job search can be significant.

But in the same way that the IRS imposes strict conditions on home offices, job search expenses can be tricky, Rempe of H&R Block says. For example, you can't just have your friend look over your resume for $20 and then claim that as a job expense -- the friend would have to claim the income on his or her tax return. You also can't claim that $500 suit as a business expense and then wear it to a wedding a week later.

What you can do, though, is keep receipts for any job search expenses that could not be anything other than job-related. That leadership seminar you paid $200 for? It counts. That $60 for a membership on a job search website? That counts too.

Business lunches can be more complicated, though. If you meet a prospective employer over food or coffee, note the details on the back of the receipt if you plan to claim the expense, and keep in mind you must be able to prove (via e-mail, for example) that the lunch had to do with finding a job.