Federal & State Income Tax Preparation
Tax Preparation: What to Bring
Remembering the whole mess of documents required to prepare a tax return is difficult! Here’s one general principle that is helpful to keep in mind: the IRS wants to know how much income you had, and how much money was used on certain “good” expenses (education, charity, medicine, mortgages, saving for retirement, etc.). There are tax credits and deductions for these expenses.
Usually “bad” expenses aren’t deductible. A trip to your favorite bar for Happy Hour? Not deductible. A post-happy-hour trip to Silverado’s? Still not deductible. Ditto with ice cream, concerts, trips to Disneyland, and Sock Dreams.
Generally speaking, if it was fun, it is NOT deductible.
So with that general rule in mind, here’s a more detailed list of what you should bring:
Tax Preparation Essentials
- A copy of your prior year’s tax return.
- A checkbook. Or just your routing number and bank account number, so your refund can be direct deposited.
- Tax Documents: Income
For individuals, any envelope that says “Important Tax Document” will probably contain documents related to income. Please bring the entire contents of the envelope.
Here’s a list of what is usually in these envelopes:
- W-2s (Wages from your employer)
- 1099-R (Retirement Income)
- 1099-Misc (Self-employment income)
- 1099-Int (Interest income) and 1099-Div (Dividend income)
- 1099-B (Stocks and Bonds)
- K-1 forms (partnership, small business, or trust)
- 1099-SSA (Social Security Income)
Documentation for other types of income:
- Rental Income
Tax Documents: Expenses
- Bought a new home? Bring the closing statement
- Any re-financing documents for your home mortgage
- IRA/401(k) contributions
- Education expenses
- Medical and Dental expenses
- Gifts to charities and churches
- Moving Expenses
- Property Tax Statements
- A list of your dependents. Social Security Number for each dependent and date of birth
- Business-related auto expenses (mileage log, maintenance, insurance, lease payments, car purchase, etc)
- Own your own business?
Small businesses are very diverse. So are their tax situations. If you own your own business, additional documents will be required. Please give us a ring and we can schedule a no-cost consultation. We’ll hash out what exactly needs to be done. Please note that these free consultations are only available between May 1 and November 1, as our office gets considerably busier during tax season.
Simple Tax Returns
Do you feel like you got a handle on all your documents and you know what to do with them? If so, you might not need a Certified Public Accountant. Online tax preparation software is a great option for simpler returns.
A couple additional tips if you decide go this route:
Brent Hunsberger of The Oregonian wrote an excellent online tax software comparison in 2011. The State of Oregon has a list of partner online tax software providers. If you use these links, the fee for e-filing an Oregon state tax return will be waived if your AGI is low.
Tax Preparation: What to Expect
Rainbow Tax and Accounting works out of a small office in Milwaukie sandwiched between three dentists. Parking is great and Portland is just two miles away! We love it.
Stuffy conference room in a skyscraper downtown? Not our style. Ties? Jackie is the only one that wears ties, much to the relief of the rest of her staff.
We like to keep it casual and comfortable and fun.
If you are coming to drop off tax documents, if she’s available, Jackie will chat with you a bit about your situation. It should take about 15 minutes. Later on, Jackie might have some questions as she digs into your return. She’ll email you.
Our full appointments are 80 minutes long and include a very detailed review of your tax situation. The full tax consultation often jogs our client’s memory about tax deductions and credits they long since forgot about. That graphing calculator you bought for a math class back in January? That IRA you opened up back in August? And so on.
Jackie usually has lots of tips about records you need to be keeping and how you can improve your tax situation next year.
We charge less for less complicated tax returns, and more for more complicated tax returns. (We found the other way didn’t work so well.)
More complicated tax returns have more schedules. The most basic tax returns require no additional schedules. Here’s some examples of income and expenses that often require additional schedules and forms:
- College Expenses
- Childcare Expenses
- Stocks and Bonds
- Retirement income
The easiest way to estimate the number of required schedules:
- Look at your prior year tax return
- Count the number of schedules (Schedule A, Schedule B, Schedule C, etc.) stapled to the back of the return.
- If your income and expenses for the current year were similar to the prior year, you will probably need to file the same schedules.