It’s Tax Season – Are you ready to file?

Like most taxpayers, the answer is probably no. However, there are many things to think about before you sit down at prepare your tax return yourself or take it to a preparer. First, you’ll need to round up some tax documents, such as

  • Prior year federal and state returns
  • W-2s for wages, salaries, tips and pensions
  • 1098s for mortgage interest paid
  • 1099s for interest, dividends, state tax refunds and other payments
  • K-1s from partnerships, S corporations, estates and trusts
  • Any correspondence you’ve received from tax agencies

Also there are a lot of questions that you need to think about that could result in significant deductions and lower your 2011 tax liability.

  • Did your marital status change during the year?
  • Did you or any member of your household pay college expenses?
  • Did you buy a new home last year?
  • Did you make any major improvements to your home?
  • Do you own a second residence or any other real estate?
  • Were you a resident of, or did you have income in, more than one state during the year?
  • Did you contribute to or convert any retirement plan?
  • Did you receive distributions from any retirement plan?
  • Did you make cash or noncash charitable contributions?
  • Did you buy, sell, or trade any assets?
  • Did you make any large purchases, such as a vehicle?

This is just a few items to think about, before you actually start filling out the forms. There are also ways to lower your 2011 tax liability before the due date of your tax return, like contributing to an IRA, if eligible.

The good thing is that on January 4, the IRS announced that 2011 federal income tax returns do not have to be filed until Tuesday, April 17, 2012. Giving all taxpayers a couple days to get your 2011 tax return filed or extended. If you have questions or need assistance when gathering the information or preparing your 2011 tax return, please contact Anders or your tax advisor.