Tax Preparation Checklist

Blue Springs & Grain Valley Income Tax Preparation Checklist

Personal Tax Preparation Checklist

Below is the information you will need to gather for the preparation of your personal tax returns.

Our tax organizer may provide additional assistance.

Do not hesitate to contact us if you have any questions.

                                        (Click here for Printable Checklist)

Personal Information

• Your social security number
• Your spouse's full name and social security number
• Amount of any alimony paid and ex-spouse's social security number

Other people who may belong on your return

• Dates of birth and social security numbers
• Childcare records (including the provider's ID number) if applicable
• Approximate income of other adults in your home (not spouse, if you're filing jointly)
• Form 8332, copies of your divorce decree, or other documents showing that your ex-spouse is releasing their right to claim a child to you

Education Payments

• Bills from the educational institution or anything else that itemizes what you paid or received loans for versus what was covered by scholarship or other financial aid
• Forms 1098-T and 1098-E, if you received them
• Scholarships and fellowships

Employee Information

• Forms W-2

Self-Employment Information

• Forms 1099-MISC, Schedules K-1, income records to verify amounts not reported on 1099s.
• Records of all expenses — check registers or credit card statements, and receipts
• Business-use asset information (cost, date placed in service, etc.) for depreciation
• Office in home information, if applicable

Vehicle Information

• Total miles driven for the year (or beginning/ending odometer readings)
• Total business miles driven for the year (other than commuting)
• Amount of parking and tolls paid
• If you want to claim actual expenses, receipts or totals for gas, oil, car washes, licenses, personal property tax, lease or interest expense, etc.

Rental Income

• Records of income and expenses
• Rental asset information (cost, date placed in service, etc.) for depreciation

Retirement Income

• Pension/IRA/annuity income (1099-R)
• Social security/RRB income (1099-SSA, RRB-1099)

Savings and Investments

• Interest, dividend income (1099-INT, 1099-OID, 1099-DIV)
• Income from sales of stock or other property (1099-B, 1099-S)Dates of acquisition and records of your cost or other basis in property you sold

Other Income

• Unemployment, state tax refund (1099-G)
• Gambling income (W-2G or records showing income, as well as expense records)
• Amount of any alimony received and ex-spouse's name
• Health care reimbursements (1099-SA or 1099-LTC)
• Jury duty records
• Hobby income and expenses
• Prizes and awards
• Other 1099

Itemizing Deductions

• Forms 1098 or other mortgage statements
• Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid
• Real estate and personal property tax records  (Click Here for Jackson County Residence) 
• Invoice showing amount of vehicle sales tax paid
• HUD statement showing closing date of home purchase
• Cash amounts donated to houses of worship, schools, other charitable organizations
• Records of non-cash charitable donations
• Amounts paid for healthcare insurance and to doctors, dentists, hospitals
• Amounts of miles driven for charitable or medical purposes
• Expenses related to your investments
• Amount paid for preparation of your last years tax return
• Employment-related expenses (dues, publications, tools, uniform cost and cleaning, travel)
• Job-hunting expenses

IRA Information

• Amount contributed 
• Traditional IRA basis
• Value of IRAs on Dec. 31st (Please provide year end statements)

If you were affected by a federally declared disaster

• City/county you lived/worked/had property in
• Records to support property losses (appraisal, clean up costs, etc.)
• Records of rebuilding/repair costs
• Insurance reimbursements/claims to be paid
• FEMA assistance information
• Check FEMA site to see if my county qualifies for individual assistance

Beware of Fake Charity Scams Relating to Hurricanes

Beware of Fake Charity Scams Relating to Hurricanes - Provided by your Blue Springs & Grain Valley Income Tax Preparation Office.

The Internal Revenue Service issued a warning about possible fake charity scams emerging due to Hurricane Harvey and encouraged taxpayers to seek out recognized charitable groups for their donations.

While there has been an enormous wave of support across the country for the victims of Hurricane Harvey, and with the preparations for the incoming Hurricane Irma, people should be aware of criminals who look to take advantage of this generosity by impersonating charities to get money or private information from well-meaning taxpayers. Such fraudulent schemes may involve contact by telephone, social media, e-mail or in-person solicitations.

Criminals often send emails that steer recipients to bogus websites that appear to be affiliated with legitimate charitable causes. These sites frequently mimic the sites of, or use names similar to, legitimate charities, or claim to be affiliated with legitimate charities in order to persuade people to send money or provide personal financial information that can be used to steal identities or financial resources.

Avoid scam artists by following these tips:

• Be sure to donate to recognized charities.
• Be wary of charities with names that are similar to familiar or nationally known organizations. Some phony charities use names or websites that sound or look like those of respected, legitimate organizations. The IRS website at IRS.gov has a search feature, Exempt Organizations Select Check, through which people may find qualified charities; donations to these charities may be tax-deductible.
• Don’t give out personal financial information — such as Social Security numbers or credit card and bank account numbers and passwords — to anyone who solicits a contribution. Scam artists may use this information to steal a donor’s identity and money.
• It is best for security and tax record purposes to contribute by check or credit card or another way that provides documentation of the donation, as opposed to cash.

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
AFITOnline.com

Who is Alliance Financial & Income Tax

3 Reasons Using Tax Preparation Software May Not Be In your Best Interest

Every year, businesses and families use tax preparation software to handle their income tax reporting.  While is may seem convenient, you should steer clear of such questionable resources because:  

1. It’s easy for you to make a costly financial mistake without noticing.
2. Tax preparation software doesn’t inform you about current tax laws.
3. Tax preparation software doesn’t tell you which decisions are right for your financial situation.

Avoid making costly errors with tax preparation software – rely on a tax preparation accountant at Alliance Financial & Income Tax.  We’re located in Blue Springs, MO and serve the Greater Kansas City area.

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
AFITOnline.com

Who is Alliance Financial & Income Tax

Tax Tips from your Blue Springs Tax Preparation Office for Hobbies that Earn Income

Millions of people enjoy hobbies such as stamp or coin collecting, craft making, and horse breeding, but the IRS may also consider them a source of income. As such, if you engage in a hobby that provides a source of income, you must report that income on your tax return; however, taxpayers (especially business owners) should be aware that the way income from hobbies is reported is different from how you report income from a business. For example, there are special rules and limits for deductions you can claim for a hobby.

Here are five basic tax tips from your Blue Springs tax preparation office you should know if you get income from your hobby:

Business versus Hobby. There are nine factors to consider to determine if you are conducting business or participating in a hobby. Make sure to base your decision on all the facts and circumstances of your situation. To learn more about these nine factors, please call.

Allowable Hobby Deductions. You may be able to deduct ordinary and necessary hobby expenses. An ordinary expense is one that is common and accepted for the activity. A necessary expense is one that is helpful or appropriate. Don't hesitate to call if you need more information about these rules.

Limits on Expenses. As a general rule, you can only deduct your hobby expenses up to the amount of your hobby income. If your expenses are more than your income, you have a loss from the activity. You can't deduct that loss from your other income.

How to Deduct Expenses. You must itemize deductions on your tax return in order to deduct hobby expenses. Your costs may fall into three types of expenses. Special rules apply to each type. Use Schedule A, Itemized Deductions to report these types of expenses.

Use a tax professional. Hobby rules can be complex, but using a Grain Valley tax professional makes filing your tax return easier. If you have any questions about reporting income from a hobby, please call.

Death is No Excuse

Blue Springs Income Tax Services

The federal government is an equal-opportunity tax assessor. Even the dead can’t escape taxes.

The final accounting required of the deceased is not limited to an estate tax filing, but a federal income tax return must also be filed for the year in which the taxpayer passes. Please consult a professional Blue Springs tax preparation office with tax expertise if you find yourself in this situation.¹

Filing for the Deceased

Of course, the deceased can’t file his or her own return, so that responsibility usually falls to the estate’s executor or administrator. Here are the highlights of how a tax return is filed in the name of a deceased individual.

• The form used is the same as the one that would have been used if the taxpayer were still alive, but "deceased" is written after the taxpayer's name.
• The filing deadline is April 15 of the year following the taxpayer's death.
• Some income that might appear to belong on the decedent's final return may in fact be taxable to the estate or to the beneficiary who receives it. Otherwise known as “income in respect of a decedent,” this is income that the decedent was entitled to receive at the time of death, but is not reported on the final income tax return.
• Deductible expenses paid before death can be utilized on the final return. The cost of a final illness can be deducted on the deceased’s return even if the bills were paid after the date of death.
• If the taxpayer was married, the widow or widower may file a joint return. The executor usually files a joint return, but the surviving spouse can file it if no executor or administrator has been appointed.
• When an executor or administrator is involved, he or she must sign the return for the decedent. For a joint return, the spouse must also sign.
• If a refund is due, you should also complete and file a copy of Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer.²

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
AFITOnline.com

Who is Alliance Financial & Income Tax

1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties.
2. IRS.gov, 2016

Red Flags for Tax Auditors

Grain Valley Tax Preparation

No one wants to see an Internal Revenue Service (IRS) auditor show up at his or her door. The IRS can’t audit every American’s tax return, so it relies on guidelines to select the ones most deserving of its attention.

Here are six flags that may make your tax return prime for an IRS audit.¹

The Chance of an Audit Rises with Income

According to the IRS, less than 1% of all individual taxpayer returns are audited. However, the percent of audits rises to nearly 4% for those with incomes between $500,000 and $1 million, and is over 8% for those making between $1 million and $5 million.²

Deviations from the Mean

The IRS has a scoring system it calls the Discriminant Information Function that is based on the deduction, credit, and exemption norms for taxpayers in each of the income brackets. The IRS does not disclose its formula for identifying aberrations that trigger an audit, but it helps if your return is within the range of others with similar income.

When a Business is Really a Hobby

Taxpayers who repeatedly report business losses increase their audit risk. In order for the IRS not to consider your business as a hobby, it needs to have earned a profit in three of the last five years.

Non-Reporting of Income

The IRS receives income information from employers and financial institutions. Individuals who overlook reported income are easily identified and may provoke greater scrutiny.

Discrepancies Between Exes

When divorced spouses prepare individual tax returns, the IRS compares the separate submissions to identify instances where alimony payments may be deducted on one return, while alimony income goes unreported on the contra party’s return. Another common tripwire is when both former spouses claim the same dependents.

Claiming Rental Losses

Passive loss rules prevent deductions of losses on rental real estate, except in the event when an individual is actively participating in the property’s management (deduction is limited and phased out), or with real estate professionals who devote greater than 50% of their working hours to this activity. This is a deduction to which the IRS pays keen attention.

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
AFITOnline.com

Who is Alliance Financial & Income Tax

1. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation.
2. IRS, 2016

Considering Hiring a Tax Professional?

Grain Valley & Blue Springs Tax Preparation

Here are 3 reasons why you should start having a Grain Valley tax professional prepare your taxes:

1 - You can hire someone to do it better than you can! A professional knows the ins & outs of their industry like you know your own.

2 - You really hate doing taxes. Why spend time doing something that you generally despise? Use that time generating income for your business instead of pulling your hair out.

3 - It can save you money. Hiring the right person could help you spend less of your money in taxes.

There are many other reasons like you make more than 200k, own your own business, planning to make a large gift, selling real estate, manage rental properties, foreign source income, shareholder in a S-corp or file K-1s, and more.

NOW is the time to hire your tax person and to make sure your taxes are set up properly. January is too late. Set up your free consultation online or call 816-220-2001

Mike Mead, EA, CTC
Alliance Financial & Income Tax
807 NW Vesper Street
Blue Springs, MO. 64015
P - 816-220-2001 x201
F - 816-220-2012
AFITOnline.com

Who is Alliance Financial & Income Tax