How to Prepare for Your Annual Tax Appointment



It’s tax season. A cold hard fact that probably has you dreading your annual CPA appointment.

And if you’re like most anxious taxpayers, this worry isn’t just about the money you (potentially) owe. It’s the uncertainty of how much you (potentially) owe. Not to mention the broader financial implications of your tax bill. As in, where are you going to find the money to pay up if you owe more than you expected?

All things considered, it’s no wonder you’re less than thrilled at the prospect of your upcoming CPA appointment.

The good news is… Your tax liabilities are rarely as bad as you think. Moreover, the more prepared you are, the more smoothly your annual CPA appointment will flow. And the less anxiety you’re likely to feel before, during, and after.

The need for organization is critical if your tax filing is complicated… Self-employment, corporate filing on pass-through entities, multiple investment income streams, etc… Can all contribute to a difficult filing if you don’t have your proverbial “ducks in a row.”

So, how do you come to your CPA appointment fully prepared to maximize your deductions and minimize your liabilities?

Here’s a quick outline to help guide your way…

Collect Necessary Documents

Your employer (or employers), along with banks, brokerage firms, and anyone else you’re in business with, should provide all necessary tax documents before January ends (technically, they’re obligated to do so by federal law).

Typically, these documents include:

Form W-2 (if you have a job)

1099 forms, which could cover income earned from…

  • Nonemployee compensation (for independent contractors, Form 1099-MISC)
  • Dividends (Form 1099-DIV)
  • Interest (Form 1099-INT)
  • Broker managed transactions (Form 1099-B)
  • Mortgage interest (Form 1098)
  • Qualifying gambling winnings (W-2G Form)

Additional items to keep in mind…

  • Make sure your name (or business entity name) and Tax ID number appear correctly on all tax forms. And if not, request a corrected replacement document ASAP.
  • Brokers aren’t required to mail 1099-B forms (reporting gains and losses on securities transactions) until mid-February, so don’t expect those documents to arrive along with other tax forms.
  • Getting organized helps your tax preparation appointment run much more smoothly.

Gather Relevant Receipts

Planning to itemize your deductions or claim the Standard Deduction? The deciding factor is which approach snags the larger deduction. Of course, the only way to be certain is to add up your itemized deductions and compare the total with the standard deduction.

This is an essential consideration because the receipts you need depend on which deduction approach you choose.

Important Recepts + Documentation You’ll Need For Your Tax Appointment

If you’re planning to itemize, here are some of the receipts + documents you should collect:

  • Medical costs not covered by insurance or reimbursed by any other health plan
  • Property taxes
  • Investment-related expenses
  • Back up for charitable cash donations (donations of $250 or more require a written acknowledgment from the charity stating the amount of your gift. If you don’t have this Documentation, you can request from the charity)*

*For the 2021 tax year, you can deduct up to $300 for filing single and $600 for married filing jointly. You can also write off up to 100% of your adjusted gross income for cash contributions to qualifying charitable organizations.

Business Documentation You’ll Need For Your Appointment

Reporting business income and expenses on a Schedule C? You’ll need to provide your…

  • Books and records (QuickBooks or any other accounting system)
  • Receipts for expenses
  • Relevant bank and credit card statements

Make a List of Relevant Personal Information

Along with your own Social Security number (SSN), make a list of Social Security numbers for each dependent you claim.

Own a vacation home or rental property?

  • Provide the address.

Did you sell a property in the past year?

  • Record the dates you bought and sold it
  • The amount you originally paid for it
  • And how much you received in the sale

Decide How to Handle a Refund

If you’re in a position to receive a refund, you have some options on disposing of those funds…
Apply your refund toward next year’s taxes (a wise move if you pay estimated quarterly taxes throughout the year).

Choose whether to have a paper check payment sent by mail or have funds deposited directly into your bank account.

Contribute your refund to investments of savings accounts, such as…

  • IRAs
  • Health savings accounts
  • Education savings accounts)

Splitting your refund among the direct deposit choices is also an option, just complete Form 8888.

Working With a New CPA?

If you’re using the same CPA as last year, they should have all your relevant Documentation, including your prior return.

However, if you’re working with a new CPA, in addition to providing last year’s return (and in some cases, the CPA may want your previous three year’s returns), you’ll need Documentation covering…

  • Interest and dividends
  • Charitable deductions

What’s the Tax Return Filing Deadline?

The annual tax return filing deadline is April 15.

The IRS sometimes extends the filing deadline under certain extenuating circumstances.

For example, the 2020 tax return deadline was extended until May 17, 2021, because of the “unusual circumstances related to the pandemic.” The deadline was also extended for tax payments to May 17, 2021.

More Questions About How to Prepare For Your CPA Appointment?

The outline above is by no means comprehensive. If you have questions specific to your finances, get in touch for a FREE consultation!


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