Bert & Associates

Map of Bert & Associates, Inc 6610 N University Dr Ste 250 Tamarac, FL 33321-4071

Directions to Bert & Associates, Inc. 6610 N University Dr Ste 250 Tamarac, FL 33321-4071

Call for an appointment (954) 580-0880 Telephone - (954) 580-0881 Fax

(800) 785-3759 Nationwide

2004 Tax Preparation Checklist

Use this checklist to identify each specific tax related item that applied to you in 2004. The IRS requires that businesses and organizations send tax documents to you no later than January 31. Collect copies of the tax documents I need, write down the other information I need (that is not in your tax document copies), and send to me as soon as possible. The earlier I receive your tax information, the quicker I can complete your tax returns, and the sooner you will enjoy your refund.  I recommend that you send me copies of your W-2s instead of the originals. You will need your original W-2s to attach to your tax returns, and when you apply for loans. Hence, If you send me original W-2s, I'll return them to you.  I will file all other documents you send me in the tax folder I keep for you in my office. You can contact me anytime for copies of the documents I've retained in your tax folder (An $8 fee per year does apply for copies of any part of your file). 

If you do your own taxes, or use another tax preparer, you should still find this checklist very helpful. Feel free to use with my compliments.

About You & Your Dependents.

 Information about you, the taxpayer(s)

What I Need: If I don't have, or there is a change from last year, I will need for each taxpayer:

1) Your full name, including middle initial, as listed on your social security
    card
2) Your social security number.
3) Your date of birth.
4) Your occupation to be listed on your tax return.
5) Your work, home, and fax phone number.
6) Your email address.
7) Your mailing address.
8) Your filing status.
9) To know if you are permanently and totally disabled.

What The IRS Knows & Requires: The IRS knows what name has been registered with each social security number. If you have changed your name because of marriage, divorce or some other reason, remember to submit your name change to the Social Security Administration. If the name on your tax return doesn't match the name on your Social Security card, your filing status and associated deductions may be disallowed.

 Information about your dependent(s)

What I Need: If I don't have, or there is a change from last year, I will need for each dependent: (children, parents, etc.)

1) Each dependent's full name, including middle initial, as listed on
    dependent's social security card.
2) Each dependent's social security number, including newly borns.
3) Each dependent's date of birth.
4) Each dependent's name who is age 19 to 23 and is a full time student.
5) To know if dependent is adopted.
6) To know if dependent is permanently and totally disabled.

What The IRS Knows & Requires: The social security number for each of your dependents, including children born during the tax year, must be reported on your tax return. The IRS will no longer accept the words, “Applied for,” in lieu of a Social Security number. Omission of a dependent's Social Security number on your tax return will result in a disallowance of the dependent's exemption deduction.

Five tests must be met by each individual you list as a dependent:

1. Relationship test.
2. Gross income test.
3. 50% support test.
4. Citizenship or residence test.
5. For dependents who are married, the joint return test.

 Marriage, divorce, or legal separation

What I Need: Date of event.

What The IRS Knows & Requires:

 Death of spouse or dependent

What I Need: Name of deceased and date of death.

What The IRS Knows & Requires: If your spouse died during the tax year, you are considered married for the whole year. If you do not remarry during the tax year, you may file a joint return for you and your deceased spouse. You must list both of your names on your joint return.

Your Income

 Wages

What is Taxed: Unless an item is specifically excluded from tax, your are taxed on practically everything you receive for your work whether paid in cash, property, or services. Taxed pay includes:

Base pay
Bonuses
Commissions
Director's fees
Dismissal pay
Employee prizes or awards
Expense allowances or reimbursements under non-accountable plans
Jury fees
Royalties
Salaries
Severance pay
Sick pay
Tips
Unemployment benefits
Vacation pay
Wages
Fringe benefits and any other pay not specifically exempt from tax.

What is Generally Not Taxed: At least in the current tax year.

Deferred pay
Company car used for business
Contributions to qualified retirement plans
Employer funded undergraduate courses up to $5,250
Employer paid adoption benefits up to $10,000 per child
Employer paid child/dependent care up to $5,000
Flexible spending account plan salary reduction contributions
Health and accident plan benefits paid by employer
Group life insurance below $50,000
Job placement assistance
Veterans Administration benefits
Workers compensation

What I Need: Copy of all W-2 and 1099-MISC forms you received from your employers.

What The IRS Knows & Requires: The IRS knows from your W-2 forms exactly how much you earned in regular income, bonuses, vacation allowances, severance pay, moving expense payments and travel allowances. Copy B of your W-2(s) must be attached to your tax return.

 Interest

What I Need: Copy of all 1099-INT forms you received.

What The IRS Knows & Requires: The IRS knows if you've been paid any interest. Banks and financial institutions must report these payments to the IRS on Form 1099-INT.

 Dividends

What I Need: Copy of all 1099-DIV forms you received.

What The IRS Knows & Requires: The IRS knows if you received $10 or more in money, stock, capital gain distributions or property from a corporation. The corporation must report these payments to the IRS on Form 1099-DIV.

 Tax Refunds

What I Need: Copy of all 1099-G forms you received for State tax refunds.

What The IRS Knows & Requires: The IRS knows about state tax refunds you receive. State governments must report payments of $10 or more on Form 1099-G. If you didn't claim the state taxes that you paid last year as an itemized deduction on Schedule A of your federal return, you don't have to report your refunds as income.

 Alimony Received

What I Need: If you or your spouse received alimony income, I will need:

1) Name of taxpayer receiving alimony.
2) Social Security number of taxpayer receiving alimony.
3) Amount of alimony received.

What The IRS Knows & Requires: The IRS knows if the person you received alimony from listed it as a deduction on his or her tax return. You must give your social security number to the person who paid you alimony. If you don't, you may have to pay a $50 penalty.

 Business Income

If you are a self-employed business person, you report income and expenses from your business or profession separately from other income, such as wages from an employer. You report your self-employed business income and expenses on Schedule C. Your "net profit" from your business is taxable as income, plus you are required to pay a 15.3% self-employment tax for social security and Medicare benefits on self-employed net earnings of $400 or more.

What I Need: If you operated one or more self-employed businesses, I will need for each of your businesses:

  1)Type of business, business name, business address.
  2) Your EIN or Social Security Number.
  3) Your business income records, including copies of all 1099-MISC
      forms you received.
  4) Total wages paid each employee.
  5) Federal and state income tax you withheld for each employee.
  6) Advance earned income credit (EIC) payments you made, if any.
  7) Name of state you paid state income tax withholdings and
      unemployment contributions.
  8) Your state unemployment tax reporting number.
  9) Amount of contributions paid to your state unemployment fund.
10) Total state sales taxes collected and paid to your state.
11) Your business expense records.
12) List, with purchase cost, of equipment purchased for business during
      the tax year.
13) Your depreciation and amortization schedules from last year (If I didn't
      prepare your taxes).
14) Your beginning inventory, and ending inventory amounts
15) Total number of miles you drove your vehicle for:
      a) business
      b) commuting
      c) other
16) Copy of your Schedule Cs from last year (If I didn't prepare your
      taxes).

To complete your employee W-2s, I will need each employee's:

1) name
2) address
3) social security number

To complete 1099-MISC forms for payments you made to self-employed workers (such as independent contractors), I will need each self-employed worker's:

1) name
2) address
3) EIN or social security number.

I will also need a copy of each 941 form you submitted to the IRS for the tax year, a copy of each state income tax withholding form you submitted to your state revenue department, plus a copy of each state unemployment contribution form you sent to your state unemployment department.

If I didn't prepare your tax returns last year, I will also need to know your carryover losses from last year, if any.

If your principal place of business was in your home, and you want to deduct a portion of your household expenses, I will need to work with you to calculate your allowable deductions.

What The IRS Knows & Requires: If you have employees, you are required to withhold federal income taxes, social security, Medicare, and state income taxes from each employee's wages. Plus, your are required to contribute unemployment funds for each emloyee.

The IRS knows what you reported for federal tax, social security, and Medicare withholdings, what you reported to your state revenue department for sales tax and state income tax withholdings, as well as what you reported to your state unemployment department.

If you have employees, you need an employer ID number (EIN). Get one ASAP by filing Form SS-4. You must give each employee a Form W-2 and file a copy with the IRS (along with Form W-3).

You must also give each self-employed worker (such as independent contractors and attorneys), you paid $600 or more for services, a 1099-MISC form and file a copy with the IRS (along with Form 1096).

If you purchased business equipment during the tax year, you can use the "first year expensing" method (Section 179) to write off up to $24,000 of your purchase cost, instead of depreciating the cost over a period of years.

 Capital Gains

Capital gains are reported on Schedule D.

What I Need: Copy of all 1099-B and 1099-S forms you received for securities sales, resident property, or investment property. I will also need the purchase date and costs for each security (stock, mutual fund, etc.) and property sold.

Copy of all quarterly and year end statements you received for stocks and mutual fund investments. Copy of the Closing papers for resident or investment properties you sold and/or purchased.

If I didn't prepare your tax returns last year, I will also need to know your short term and long term carryover losses from last year.

If you sold rental property during the tax year, I will need to know your total:

1) Selling price
2) Date of sale
3) Purchase price
4) Date of purchase
2) Purchase expenses
3) Costs of improvements paid during ownership period
4) Depreciation costs taken during ownership period
5) Selling expenses, including mortgage pay off, agent's
    commission, fix-up expenses, and closing costs.
6) State taxes withheld, if any.

Please send me a copy of both your purchase and selling settlement statements, plus any other supporting documents.

If the entire gain on the sale of your personal residence is not excludable, I will need the information defined above for the sale of rental property for your personal residence sale. Please send me a copy of both your purchase and selling settlement statements so that I can determine if any additional information is required.

What The IRS Knows & Requires: The IRS also receives a copy of all 1099-B and 1099-S forms from your securities and real estate companies. They will be matching what you submit with what they received. Any mismatch can trigger an audit.

 Retirement Account(s) Distribution(s)

What I Need: Copy of all 1099-R forms you received for your retirement plans, including 401(k)s, 403(b)s, IRAs, annuities, or life insurance distributions.

Copy of all year end statements you received for stocks, mutual funds, and annuities retirement accounts.

If you are over age 70 1/2 and subject to the minimum distribution requirements, I will need a copy of all your 401(k)s, 403(b)s, IRAs, and annuities accounts year end statements.

What The IRS Knows & Requires: Copy B of each 1099-R form that lists Federal income tax withheld must be attached to your tax return.

 Rental Income

You report income and expenses for all real estate rental property your own on Schedule E. Your
"net income" from your rental property is taxable as income. You must perform some management role to deduct rental real estate "net losses" up to $25,000 from other income. This deduction allowance is phased out if your modified adjusted gross income is between $100,000 and $150,000.

What I Need: If you owned rental property, I will need for each of your rental properties:

1) Type of property with property address(es).
2) Your rental income, including copies of all 1099-MISC forms you
    received.
3) Your expenses, including copies of all 1098 forms you received.
4) List, with cost, of property improvements you made during the tax year.
5) If I didn't prepare your taxes last year, I will need your depreciation
    schedules from last year.
6) If this is the first year you rented your property, I will need:
    a) Original purchase price of your property
    b) Amount of the purchase price that is the cost of the property's land
7) Copy of your Schedule Es from last year (If I didn't prepare your taxes).
8) Disallowed loss carryovers from last year (If I didn't prepare your taxes).

What The IRS Knows & Requires: The IRS also receives a copy of all 1099-MISC forms from your property managers, plus a copy of all 1098 forms from your mortgage companies.

 Partnerships/Trusts Distributions

What I Need: Copy of all K-1 forms your received for distributions from partnerships, estates, trusts, or S Corporations.

What The IRS Knows & Requires:

 Unemployment Compensation

What I Need: Copy of all 1099-G forms you received for unemployment compensation.

What The IRS Knows & Requires: The IRS also receives a copy of your 1099-G form from your state.

 Social Security Income

What I Need: Copy of all SSA-1099 forms you received for Social Security income.

What The IRS Knows & Requires: The IRS knows what social security benefits you've been paid, as the Social Security Administration sends a copy of your Form SSA-1099 to the IRS.

 Gambling Winnings

What I Need: Copy of all W-2G forms you received for gambling winnings.

If you itemize your deductions on Schedule A, I will also need a copy of your gambling log, or casino win/loss statements, that lists for each gambling session:

1) date
2) gambling location
3) amount won
4) amount loss

What The IRS Knows & Requires: The IRS knows about money you won from horse racing, dog racing, jai alai, lotteries, raffles, drawings, Bingo, slot machines and Keno. Payers must report payments of $1,200 or more to the IRS on Form W-2G. Copy B of your W-2G(s) must be attached to your tax return.

 Other Income

What I Need: Copy of all 1099-MISC forms you received for other taxable income, such as: consulting, jury duty, awards, judgments, etc.

What The IRS Knows & Requires: The IRS knows if you have been paid $600 or more. The payer must report this payment to the IRS on Form 1099-MISC.

Your Deductions

 IRA Deduction

If you made contributions to a Traditional IRA for the tax year, you may be able to take an IRA deduction up to $3,000 ($4000 for 2005) for yourself, and up to $3,000 ($4000 for 2005) for your spouse. Taxpayers age 50 and older may be able to deduct up to $3,500 ($4500 for 2005).

To qualify for an IRA deduction:

1) You must be less than 70 1/2 years old.
2) You (and your spouse if filing a joint return) must have earned income.

If you were covered by a retirement plan at work, or through self-employment, your IRA deduction may be reduced or eliminated if your modified adjusted gross income is between:

a) $65,000 and $75,000 and you are married filing jointly, or a qualifying widow(er)
b) $45,000 and $55,000 and you are single, or head of household
c) $0 and $10,000 and you are married filing separately

If you were not covered, but your spouse was covered by a retirement plan at work, or through self-employment, your IRA deduction may be reduced or eliminated if your modified adjusted gross income is between:

a) $150,000 and $160,000 and you are married filing jointly, or a qualifying widow(er)
b) $0 and $10,000 and you are married filing separately

Contributions to a Roth IRA are not deductible, but you may continue to make contributions to your Roth IRA after reaching age 70 1/2. The amount you can contribute to a Roth IRA may be reduced or eliminated if your modified adjusted gross income is between:

a) $150,000 and $160,000 and you are married filing jointly
b) $95,000 and $110,000 and you are single, or head of household, or a qualifying
    widow(er)
c) $0 and $10,000 and you are married filing separately

If you contribute to both a traditional IRA and Roth IRA in the same year, your total contribution to both IRAs can not be more than $3,000 ($3,500 if 50 or older, ($4000 for 2005) ) for you, and not more than $3,000 ($3,500 if 50 or older($4000 for 2005) ) for your spouse. Your maximum contribution limit for each of you is $3,000 ($3,500 if 50 or older($4000 for 2005) ), or your compensation if that is less. Your contribution is applied first to the traditional IRA, and then the balance to the Roth IRA.

What I Need: I will need:

1) copy of all 5498 forms your received, or your IRA year end statement(s)
   that lists the contribution(s) you made during the tax year, or
2) your IRA contribution amounts, if you made your contribution(s)
   between January 1 and April 15 immediately following the end of the tax
   year.
3) to know if you were covered by a self-employment retirement plan
   (Keogh, SEP, or SIMPLE).
4) copy of the last Form 8606 your filed.

 What The IRS Knows & Requires: The difference between your total allowable IRA contributions and your total deductible contributions, if any, are your nondeductible contributions.

You must report your nondeductible IRA contributions on Form 8606. If you do not report nondeductible contributions, the IRS will assume all of the contributions to your traditional IRA were deductible. When you make withdrawals from your IRA, the amounts you withdraw will be taxed unless you can show, with satisfactory evidence, that nondeductible contributions were made.

If you overstate the amount of nondeductible contributions on your Form 8606 for any tax year, you must pay a penalty of $100 for each overstatement, unless it was due to reasonable cause. You will have to pay a $50 penalty if you do not file a required Form 8606, unless you can prove that the failure was due to reasonable cause.

If you contribute more than the allowable amount amounts to a traditional IRA, whether deductible or nondeductible, the excess contribution may be subject to a penalty tax.

 Student Loan Interest

If you paid interest on a student loan(s) for yourself, your spouse, or your dependent(s) during the tax year, you may be able to claim a deduction up to $4,000. The deduction can be claimed regardless of whether you itemize your deductions on Schedule A. This deduction is phased out if :

1) You are married filing a joint return and your adjusted gross income is between
    $100,000 and $160,000, or
2) You are not married and your adjusted gross income is between $70,000 and
    $80,000.

If your adjusted gross income was above these maximums, you can't deduct any interest you paid on student loans.

What I Need: I will need the amount of student loan interest you paid during the tax year.

What The IRS Knows & Requires: This deduction is allowed for an unlimited number of years starting in year 2002.

 Medical Savings Account

The amount you can deduct for your Medical savings account contributions depends on your annual insurance plan deductible. If your plan covers you alone, your write-off cannot exceed 65% of the cost of your policy deductible (75% for couples and families). There is one other limitation: Your deduction cannot be more than your net earnings from the self-employed business for which the MSA was established.

Because your Medical savings account contributions are deducted from your gross income, you avoid the 7.5% floor for itemized medical expenses.

What I Need: I will need:

1) Copy of all 5498-MSA forms you received.
2) Amount of contributions you made to your Medical savings account
    plan(s)
3) Amount of contributions your employer made to your Medical savings
    account plan(s).
4) Amount of distributions your received from your Medical savings
    account plan(s).
5) Amount of your unreimbursed medical expenses.
6) Annual deductible amount of your health plan(s)
7) Number of months you had your health plan(s)
8) Any other information required to calculate your Medical savings
    account deduction.
9) Copy of Form 8853 for prior tax year.

What The IRS Knows & Requires: Medical savings account contributions are reported to the IRS on Form 5498-MSA. If you pay in more than your 65% or 75% limit, you may have to pay a 6% penalty. There is also a 15% penalty on distributions used for nonmedical purposes, in addition to income tax, if your withdrawal occurs before you reach age 65, are disabled, or die.

 Moving Expenses

If you moved in connection with your job or business, or started a new job, you may be able to deduct some of your moving expenses.

Your new workplace must be at least 50 miles farther from your former home than your former home was from your former workplace. If you had no former workplace, your new workplace must be at least 50 miles from your former home.

You also must meet one of the following time tests:

1) If you are an employee, you must work full time for at least 39 weeks during the first
   12 months after you arrive in the general area of your new job location.
2) If you are self-employed, you must work full time for at least 39 weeks during the first
   12 months AND for a total of at least 78 weeks during the first 24 months after you
   arrive in your new job location.

What I Need: I will need:

1) Your new workplace.
2) Miles from former home to new workplace.
3) Miles from former home to former workplace.
4) Amount your paid for transportation and storage of household goods
    and personal effects.
5) Amount you paid for travel and lodging expenses in moving from your
    former home to your new home. Meal expenses are not deductible.
6) Amount your employer paid you for moving expenses.
7) Date you started new job.
8) Date your move began

What The IRS Knows & Requires:  The IRS probably has your old address, but using your new address on your tax return should automatically update the IRS records.

 Self-employment Retirement Plan Contributions

If you are self-employed, you can deduct contributions you made for yourself to your self-employment retirement plan (Keogh, SEP, SIMPLE) during the tax year.

The contribution limits for each plan are:

1) $40,000 Keogh
2) $40,000 SEP
3) $7,500 ($7,500 if 50 or older) SIMPLE

What I Need: I will need:

1) Copy of statements you received that list amount of contributions you
    made to your Keogh, SEP, or SIMPLE retirement plan.
2) Copy of Schedule K-1 (Form 1065) you received that lists contributions
    a partnership made to your retirement plan.

What The IRS Knows & Requires: You must formally set up your self-employment retirement plan in writing on or before the taxable year in which you want the plan to be effective.

 Alimony Paid

What I Need: I will need the name and social security number of the former spouse you paid alimony to, and the amount you paid.

What The IRS Knows & Requires: The IRS knows if the person you paid alimony to reported it as income on his or her tax return. If you don't include the social security number of the recipient on your tax return, you may have to pay a $50 penalty and your deduction may be disallowed.

 Penalty on Early Withdrawal of Savings

If you withdraw funds from a savings certificate before maturity, your bank may charge a penalty, which is deductible.

What I Need: Copy of all 1099-INT forms you received that show the amount of penalties you were charged.

What The IRS Knows & Requires: The IRS knows if you've been paid interest and charged penalties. Banks and financial institutions must report these payments to the IRS on Form 1099-INT.

 Medical/Dental Expenses

What I Need: If you had extensive medical/dental expenses during the tax year, you should provide me the information I need to determine how much is deductible. I will need:

1) Amount you paid for medical, dental, and long term care insurance
    premiums.
2) Amount you paid out of your pocket to doctors, dentists, labs, clinics,
    hospitals, etc.
3) Amount you paid out of your pocket for prescriptions and eye glasses
    or contact lenses.
4) Miles you drove, plus any other transportation and lodging costs, for
    traveling to receive medical care.

What The IRS Knows & Requires: You can only deduct medical and dental expenses that exceed 7.5% of your adjusted gross income. That eliminates this deduction for most taxpayers.

If your adjusted gross income exceeds $137,300 ($68,650 if married filing separately), some of your itemized deductions will be reduced by 3% of the excess of adjusted gross income over the $137,300 (or $68,650) threshold. The total reduction may not exceed 80% of your deduction.

Medical and dental expenses are not subject to this 3% itemized deduction reduction.

 State/Local Income Taxes

What I Need: Copies of your W-2s, 1099s, and K-1 forms will give me the state and local taxes that you had withheld.

I will also need the estimated tax payments you made during the tax year. For each estimated tax payment, list:

1) Date of payment
2) Amount paid
3) State or locality

What The IRS Knows & Requires: The IRS knows exactly how much state and local taxes have been withheld from your W-2s, 1099s, and K-1 forms, as copies of all these forms are sent to the IRS. A copy of all your W-2s, W-2Gs, and 1099-Rs must also be attached to your return.

State and local income taxes are subject to the 3% itemized deduction reduction.

 Real Estate Taxes

Amount of real estate taxes you paid on property you own that was not used for business.

What I Need: For each such property, I will need:

1) Copy of the year end statement you receive from your mortgage
    company if they pay your real estate taxes from your impound
    account.
2) Copy of the county tax collectors bill you receive if you personally pay
    your real estate taxes.
3) If you sold your property during the tax year, I will also need a copy of
    your settlement statement, plus your 1099-S form.

What The IRS Knows & Requires: Real estate taxes are subject to the 3% itemized deduction reduction.

 Personal Property Taxes

What I Need: I will need the amount you paid for license fees for each of your vehicles, plus the amount of property taxes you paid on other personal property such as a boat, camper, trailer, airplane, etc.

Note: You can only deduct the portion of your vehicles license fee that is based on your vehicles value.

What The IRS Knows & Requires: Personal property taxes are subject to the 3% itemized deduction reduction.

 Home Mortgage Interest

Amount of mortgage interest, and points, you paid on a loan that is secured by your main home or second home. This includes first and second mortgages, home equity loans, and refinanced mortgages.

Generally you can deduct points (also called loan origination fees, maximum loan charges, loan discount, or discount points) if your loan is used to buy on build your main home.

Points you pay to refinance your mortgage, however, are not generally deductible in full in the year you pay them. They are deducted over the loan period. If you deducted points over the loan term on a refinanced loan and refinance again, you can deduct the remaining points on your first refinanced loan in the year that mortgage ends.

What I Need: For each such loan, I will need:

1) Copy of 1098 form you received.
2) If you did not receive a form 1098 because you are paying mortgage
    interest to the individual(s) you purchased your home from, I will need
    for each individual receiving payment:
        a) Name
        b) Address
        c) Social security number
3) If you did not receive a form 1098 for points you paid, I will need a copy
   of your settlement statement.

What The IRS Knows & Requires: Each individual you are paying mortgage interest to who you did not receive a form 1098 from must give you his/her social security number. This individual may have to pay a $50 penalty if he/she fails to do so.

You must also give your social security number to each individual you are paying mortgage interest to who you did not receive a form 1098 from. If the name, address, and social security number of the individual receiving payment is not entered on your tax return, or you don't give the individual your social security number, you may have to pay a $50 penalty. Clearly the IRS knows from the social security number(s) listed on your return who needs to report mortgage interest income equal to your mortgage interest deduction.

Home mortgage interest is subject to the 3% itemized deduction reduction.

 Investment Interest

Investment interest is interest paid on debts you incurred to buy or carry investment property.

What I Need: I will need:

1) copies of statements that show the amount of interest you paid on loans used to
    make investments.
2) The carryover amount of investment interest disallowed from last year (If I didn't
    prepare your taxes).

What The IRS Knows & Requires: Investment interest is not subject to the 3% itemized deduction reduction. Deductible investment interest is limited to net investment income.

 Gifts to Charity

What I Need: I will need a listing of all your charitable contributions. For each contribution, list:

1) Charity recipients name.
2) Amount donated.
3) Type of donation:
   a) cash
   b) non-cash, including: used clothing, furniture, appliances, securities,
      real estate, or other property
   c) unreimbursed expenses, plus miles driven, for services you provided
      charitable organization(s).
4) Carryover amount of excess donations disallowed last year (If I didn't
    prepare your taxes).

What The IRS Knows & Requires: For each contribution of $250 or more you give to a charity, you must get a written receipt to substantiate your donation. If you claim deductions for non-cash property donations (clothing, furniture, etc.) valued at more than $500, you must attach Form 8283 to your tax return.

If you are claiming a deduction exceeding $5,000 for an item, or a group of similar items (such as coins, books, stamps, paintings, and buildings), you need a written appraisal.

Gifts to charity are subject to the 3% itemized deduction reduction.

 Casualty and Theft Losses

You may be able to deduct losses your incurred during the tax year from:

1) Casualties: such as car accident, fire, storm, etc.
2) Thefts: such as robbery, larceny, embezzlement, etc.

What I Need: For each casualty or theft loss, I will need:

1) Date of loss.
2) Description of property.
3) Date acquired.
4) Cost or basis of property.
5) Fair market value before casualty or theft.
6) Fair market value after casualty or theft.
7) Amount of insurance or other reimbursements you received.

What The IRS Knows & Requires: The first $100 of each separate casualty or theft loss is not deductible. You must reduce the total of all your casualty or theft losses by 10% of your adjusted gross income. This rule is applied after you reduce each loss by $100.

Casualty and theft losses are not subject to the 3% itemized deduction reduction.

 Unreimbursed Employee Expenses

You may be able to deduct job expenses you paid for, which were not reimbursed to you by your employer, during the tax year. Common unreimbursed employee expenses include: job search expenses, supplies needed for your job, depreciation on home computer equipment you are required to use for your work, education expenses, subscriptions to professional publications, dues to professional organizations, travel and entertainment expenses, home office expenses, etc.

Note: Only 50% of meal and entertainment expenses are deductible.

What I Need: I will need a listing of the amounts you spent for each unreimbursed employee expense.

If you used the car you own for business, and incurred unreimbursed expenses, I will need:

1) Make and model of your vehicle.
2) Type of vehicle (car, truck).
3) Date placed in service.
4) Total number of miles you drove your vehicle for:
      a) business
      b) commuting
      c) other
5) Average daily round trip commuting mileage.
6) If you choose actual expenses, instead of the standard mileage rate,
    I will also need:
      a) Amount you spent for: gas, oil, tires, repairs, registration fees,
          insurance, etc.
      b) Vehicle cost when acquired.
      c) Total depreciation amount taken in prior tax years.

If you used a leased car for business, and incurred unreimbursed expenses, I will need your actual expenses as listed above, plus:

1) Copy of your lease agreement.
2) Vehicle lease fees.

What The IRS Knows & Requires: You can only claim the amount of your unreimbursed employee expenses that are more than 2% of your adjusted gross income.

You must choose one of two methods to when deducting unreimbursed employee expenses for the use of your car for business:

1) actual expenses, or
2) the standard mileage rate.

If you want to use the standard mileage rate for a car you own, you must choose to use it in the first year the car was available for use in your business. Then in later years, you can choose to use either the standard mileage rate or actual expenses. If you want to use the standard mileage rate for a car you lease, you must use it for the entire lease period.

Unreimbursed employee expenses are also subject to the 3% itemized deduction reduction.

 Other Expenses

You may be able to deduct expenses you paid to produce or collect taxable income, and manage or protect property you held to produce income, such as:

• Tax advice, preparation, and audit fees
• Investment management or investment planning fees
• Accounting fees for keeping records of your investment income
• Travel to confer with your investments advisors
• Subscriptions to investment publications
• Depreciation on home computer you used to manage your investments
• Fees to collect interest and dividends
• Legal fees related to producing or collecting taxable income, doing or keeping your job, or
  getting tax advice
• Fees to set up or administer your IRA(s)
• Appraisal fees for a casualty loss or charitable contribution
• And many more

What I Need: I will need a listing of the amounts you spent for each expense you paid to produce or collect taxable income, and manage or protect property you held to produce income.

What The IRS Knows & Requires: You can only claim the amount of these other expenses that are more than 2% of your adjusted gross income. You must be able to supply records and receipts to support the expenses you deduct if requested by the IRS.

These other expenses are also subject to the 3% itemized deduction reduction.

 Gambling Losses

You can generally deduct your gambling losses up to the amount of your gambling winnings.

What I Need: Copy of all W-2G forms you received for gambling winnings.

If you itemize your deductions on Schedule A, I will also need a copy of your gambling log, or casino win/loss statements, that lists for each gambling session:

1) date
2) gambling location
3) amount won
4) amount of loss.

What The IRS Knows & Requires: Gambling losses are not subject to the 3% itemized deduction reduction.

Sales Taxes

You can now deduct sales tax paid on all non-business purchases during the year.  The IRS will give you a deduction based on your income, but you may add up all you purchases and take the higher number.  You can also add large ticket items like cars, boats, etc.  The deduction in Florida ranges from $394 for income up to $20,000 to $2,073 for income above $200,000.  This works really well for states that do not have state income taxes, as you will have to choose between sales taxes or state income taxes for this deduction. 

Bear in mind these deductions go against the itemized amounts.  If you do not have enough to total more than the standard deduction, they will not help you this year.  Give us a call to clarify these rules.   

Your Credits

 Child and Dependent Care Credit

If you had to pay someone to care for:

a) one or more of your children under 13, or
b) your dependent or spouse who could not care for himself/herself

so you (and your spouse, if married) could work or look for work, you may be able to take this credit.

Depending on your income, this credit is 20% to 30% percent of the expenses you paid (up to
$3,000for one dependent, and up to $6,000 for two or more dependents) for child and dependent care.

Day care services provided or reimbursed by your employer under a written nondiscriminatory plan is tax free up to a limit of $5,000. Tax free employer benefits, however, reduce the dependent care tax credits your are eligible for.

What I Need: I will need the amount:

1) you paid your care provider
2) of medical expenses you paid for your dependent or spouse who could
    not care for himself/herself
3) of employment taxes you paid for your care provider
4) of dependent care benefits you received from your employer

I will also need your care provider's:

1) Name (individual or organization)
2) Address
3) Telephone number
4) Social security number if individual, or
5) Employer identification number if organization

I will also need the information about you noted in Tax Related Item 01 and the information about your dependents noted in Tax Related Item 02.

What The IRS Knows & Requires: If the care was provided in your home by a someone who is not self-employed, or an employee of a company that provides care services, you may have to pay employment taxes for your care provider. Refer to Tax Related Item 43.

If the care provider information you give is incorrect or incomplete, your credit may not be allowed. However, if you can show that you used due diligence in trying to supply the information, you can still claim the credit.

Your credit for child and dependent care expenses cannot be more than the amount of your tax liability. This means that you cannot get a refund for any part of the credit that is more than your tax.

Clearly the IRS knows from the social security number, or employer identification number, listed on your return who needs to report child/dependent care services income equal to the amount you paid your care provider.

 Credit for the Elderly or Disabled

You may be able to take this credit if at the end of the tax year you were:

1) 65 or older, or
2) Under age 65, retired on permanent and total disability, and you received taxable
    disability income.

The amount of the credit is 15% times the base amount after reductions. The base amount is reduced by nontaxable Social Security and other tax free pensions, as well as by adjusted gross income exceeding specific limits.

The initial base amounts are:

1) $5,000 if you are single, head of household, or a qualifying widow(er)
2) $5,000 if you file a joint return and only one spouse is eligible for the credit
3) $7,500 if you file a joint return and both spouses are eligible for the credit
4) $3,750 if you are married and file a separate return

The maximum credit available is $1,125.

What I Need: I will need the information about you noted in Tax Related Item 01.

What The IRS Knows & Requires: Your credit cannot be more than the amount of your tax liability. Therefore, you cannot get a refund for any part of the credit for the elderly or the disabled that is more than your tax.

The IRS knows how much income you've received from the W-2s and 1099s forms that were sent to them

 Child Tax Credit

This credit is in addition to child and dependent care expenses.

You may be able to claim a child tax credit up to $1000 for each of your dependent children who were under age 17 at the end of the tax year.

This credit is reduced or eliminated if your income is above the threshold amounts for your filing status. The threshold amounts are:

a) $110,000 Married filing jointly
b) $75,000 Single, head of household, or qualifying widow(er)
c) $55,000 Married filing separately

What I Need: I will need your dependent information noted in Tax Related Item 02.

What The IRS Knows & Requires: Your credit is refundable to the extent of 10 percent of your earned income in excess of $10,000. A larger refundable credit may apply for parents with three or more children. The IRS knows how much income you've received from the W-2s and 1099s forms that were sent to them.

 Education Tax Credits

If you paid higher education expenses for yourself, your spouse, or dependent(s), you may be able to claim credits for these education expenses. Your education credits are phased out (gradually reduced) if your modified adjusted gross income is between $41,000 and $50,000 ($82,000 and
$100,000 in the case of a joint return).

If you pay qualified tuition and related expenses for an eligible student (including yourself , spouse, and dependents) who is enrolled in the first or second year of college or other post-secondary institution, you may claim a Hope credit up to $2,000 for each eligible student. Your maximum Hope credit is $2,000 times the number of eligible students.

The lifetime learning credit is $1,000 (20% of the first $5,000) you paid for qualified tuition and related expense for all (regardless of the number) eligible students in your family.

You may not claim both Hope credit and the lifetime learning credit for the same student's expenses for the same tax year.

Caution: Room and board, insurance, medical expenses, transportation, or other personal or family living expenses incurred by student(s) cannot be applied to this credit.

What I Need: For each person who incurred higher education expenses during the tax year, I will need :

1) Name of education institution.
2) Type of education program:
    a) degree
    b) non-degree, taken to improve job skills.
3) Enrollment year (1st, 2nd, etc.)
4) Amount of tax free funds received for educational expenses.
5) If distribution was received from an education IRA.

For each person who incurred higher education expenses during the tax year, I will also need the amount you paid for:

1) tuition.
2) fees required for enrollment or attendance.
3) Student activity fees, cost of books, supplies and equipment that must
    be paid as a condition of enrollment or attendance.

I will also need the information about you noted in Tax Related Item 01 and the information about your dependents noted in Tax Related Item 02.

What The IRS Knows & Requires: If you are married, you must file a joint return to claim either of the education tax credits. Your total credits cannot be more than the amount of your tax liability. Therefore, you cannot get a refund for any part of the credits for education expenses that is more than your tax. The IRS knows how much income you've received from the W-2s and 1099s forms that were sent to them.

 Adoption Credit

If you adopted one or more children under age 18, or a disabled person incapable of self-care, you may be able to claim your adoption expenses up to $10,000. The adoption credit starts to phase out if your adjusted gross income is over $150,000. No credit is allowed if your adjusted gross income is $190,000 or more.

Adoption expenses reimbursed by your employer are tax free up to a limit of $10,000. Tax free employer benefits, however, reduce the adoption credit your are eligible for.

What I Need: I will need your adoption expenses for the tax year, such as:

1) Adoption fees.
2) Court costs.
3) Attorney fees.
4) Travel expenses.
5) Other expenses related to adoption.
6) Total amount of employer reimbursement.

I will also need your dependent information noted in Tax Related Item 02.

What The IRS Knows & Requires: Your credit cannot be more than the amount of your tax liability for the tax year, however, you can carry forward any unused credit. The IRS knows how much income you've received from the W-2s and 1099s forms that were sent to them.

 Earned Income Credit (EIC)

You may be able to claim earned income credit if your modified adjusted gross income is below the following threshold amounts:

1) $33,178 ($34,178 married filing a joint return) if you have two or more qualifying children.
2) $29,201 ($30,201 married filing a joint return) if you have one qualifying child.
3) $11,060 ($12,060 married filing a joint return) if you have no qualifying children.

Earned income credit can be as much as $2,506 if you have one qualifying child, $4,140 if you have more than one qualifying child, and $376 if you don't have a qualifying child.

Note: If your total investment income is over $2,550, you do not qualify for earned income credit.

What I Need: I will need the information about you noted in Tax Related Item 01 and the information about your dependents noted in Tax Related Item 02.

What The IRS Knows & Requires: You receive a refund from the IRS for the amount of earned income credit that exceeds your tax liability. The IRS knows how much income you've received from the W-2s and 1099s forms that were sent to them.

And More...

 Household Employees Tax (Nanny Tax)

If you employ someone to care for your children or disabled dependents in your home, clean your residence, cook, or provide other personal services in or around your home, you may be obligated to pay and withhold Social Security and Medicare taxes (FICA) and also pay federal unemployment taxes (FUTA).

FICA or FUTA taxes don't apply if your household worker is the employee of an agency that assigns the position, sets the fee, and requires reports from the worker. These taxes also don't apply if your household employee earns less than $1,400 (or $1,000 in any one quarter). Wages paid to a household employee who is under age 18; or to your spouse, your children under age 21, or your parent for household services are also exempt from these taxes.

What I Need: If your household employee(s) wages are not exempt from these taxes, I will need:

1) Your EIN or Social Security Number.
2) Total wages paid household employee(s) by quarter.
3) Federal income tax you withheld, if any.
4) Advance earned income credit (EIC) payments you made, if any.
5) Name of state you paid unemployment contributions.
6) Your state unemployment tax reporting number.
7) Amount of contributions paid to your state unemployment fund.

To complete your household employee's W-2, I will need each employee's:

1) name.
2) address
3) social security number.

I will also need a copy of each 941 form you submitted to the IRS for the tax year, a copy of each state income tax withholding form you submitted to your state revenue department, plus a copy of each state unemployment contribution form you sent to your state unemployment department.

What The IRS Knows & Requires: The IRS knows what you reported quarterly for Federal tax, social security, and Medicare withholdings, plus what you reported quarterly to your state revenue department and your state unemployment department. If you don't withhold your household employee's share (7.65%) of FICA taxes, you are liable for the full amount (15.3%).

If you owe any FICA or FUTA taxes (or you withheld federal income tax from your nanny's wages), you need an employer ID number (EIN). Get one ASAP by filing Form SS-4. You must then give your nanny a Form W-2 and file a copy with the IRS (along with Form W-3).

 Last year's tax returns

What I Need: If I didn't prepare your taxes last year, I will need a copy of the Federal and State tax returns you filed last year.

What The IRS Knows & Requires: Of course the IRS has a copy of the tax return you submitted last year, and knows if you received a refund or owe any unpaid taxes. If you owe an unpaid balance from prior years, and qualify for a refund this year, the IRS will subtract any unpaid taxes from your refund, and refund you the balance, if any.

Personal Data
Social Security Numbers (including spouse and children) and Dates of Birth.
Child care provider tax I.D. or Social Security Number

Employment & Income Data

Wages (W-2s)
Interest, Dividends, Capital Gain Distributions (1099s)
Sales of Stock or other property including Cost Basis (1099s & Broker Statements)
Rents and Royalties (may receive 1099)
Alimony (need SS# of payer)
Pensions, Annuities and other Retirement Accounts (1099)
Unemployment Compensation (1099)
Social Security and Railroad Retirement Benefits (1009-S or 1099-R)
Business and Farm Income (may have 1099-MISC and/or CCC 1099-G)
Partnership, S Corporation Trust and Estate Income (K-1)
Gambling and Lottery Winnings (1099-G or W-2G)
State and Local Income Tax Refunds
Scholarships and Fellowships (1099)
Other Miscellaneous income    
Jury duty pay
Prizes and awards  

Homeowner/Renter Data
Residential address(es) for this year
Mortgage interest: Form 1098
Sale of your home or other real estate: Form 1099-S
Second mortgage interest paid
Real estate taxes paid
Rent paid during tax year
Moving expenses

Rental Owners

Mortgage Interest of Rental Property

Real Estate Taxes of Rental Property

Homeowners Insurance Fees

Homeowners Association Fees

Repairs and maintenance costs

Prior year tax return if new preparer

Utilities and Fees paid on property

Financial Assets
Interest income statements: Form 1099-INT & 1099-OID
Dividend income statements: Form 1099-DN
Proceeds from broker transactions: Form 1099-B
Tax refunds & unemployment compensation: Form 1099-G
Miscellaneous income including rent: Form 1099-MISC
Retirement plan distribution: Form 1099-R

Financial Liabilities
Auto loans and leases (account numbers and car value) if vehicle used for business
Student loan interest paid
Early withdrawal penalties on CDs and other time deposits

Automobiles
Personal property tax information

Expenses
Gifts to charity (receipts for any single donations of $250 or more)
Unreimbursed expenses related to volunteer work
Unreimbursed expenses related to your job (travel expenses, entertainment, uniforms, union dues, subscriptions)
Investment expenses
Job-hunting expenses
Education expenses
Child care expenses
Medical Savings Accounts
Adoption expenses
Alimony paid
Tax return preparation expenses and fees

Health Care Insurance and Expenses
New Dependents (need date of birth and SS#'s)
Home Mortgage Interest and Equity Loan Interest
Investment Interest and Expenses
Charitable Contributions (cash and non-cash property)
Out-of-Pocket Expenses and Mileage for Volunteer Services
Union and Professional Dues
Child and Disabled-Dependent Care Expenses
Job-seeking Expenses
Traditional or Roth IRA, Keogh, SEP and SIMPLE Contributions
Expenses for Business Use of Automobiles/Trucks
Business Travel and Entertainment Expenses
Alimony Paid (need recipients SS #)
Work-related Moving Expenses
Real Estate Taxes
Casualty and Theft Losses
Education and/or Vocational Expenses
Estimated Tax Payments Made
Educator Expenses
Gambling Losses

Self-employment Data
K-1s on all partnerships
Receipts or documentation for business-related expenses
Farm income

Deduction Documents
State & local income tax: your 2000 & 2001 estimated tax vouchers paid in 2001
IRA, Keogh & other retirement plan contributions
Medical expenses

Casualty or theft losses
Other miscellaneous deductions

Office Expenses

  Beeper/pager

  Business calls – provide bill with individual breakdown of calls

  Business cards

  Database connecting fees (CompuServe, AOL, Dow Jones, etc.)

  Separate designated business phone line

  Publications, manuals, and magazines related to your profession

Automobile

  Tolls and parking

  Mileage Reimbursement Accountable Plan

  Actual Auto Expenses (Contact your Business Center Manager for details)

Child Care

  Both husband and wife must be working

  Maximum of $5,000 per year – for children up to and including 13 years old

  Must provide Federal Employer Identification Number of child care provider

Equipment Purchase Program

  Contact your Business Center Manager to discuss how you may expense computer equipment purchases over $500.

Marketing/Entertainment

  Client entertainment

  Business meeting meals

  Public relations

  Promotional material

  Resume production

  *Receipts for Marketing/Entertainment must include:

1. date; 2. place; 3. cost; 4. names, titles of attendees; 5. reason for dinner, meeting, etc.

  Use your credit card for these expenses – only a limited number of hand-written check stubs will be accepted.

Medical Insurance Premium Coverage

  Major medical insurance premiums for your own plan

Medical Expense Reimbursement

  To be eligible you must be covered by both our medical and dental insurance plans or provide proof of coverage by your own plan.

  All noncovered medical costs up to the limits established by each member in the medical reimbursement account (but not to exceed $7,500 per year). Noncovered medical costs often comprise services for the following:

  eyeglasses

  chiropractic care

  dental/orthodontic work

  perscription medication, etc.

  Expenses for medical costs should first be submitted to your insurance carrier. The amount that is not covered by insurance can then be reimbursed. Documentation (insurance carrier's partial payment/denial/amount toward deductible statement) indicating noncovered amounts is required for reimbursement.

Disability Insurance Premium Coverage

  Private Income Disability Insurance Premiums (discuss with your tax advisor). Collection of benefits will be taxable if premiums are treated as pre-tax expenses.

Business Travel

  Cab fare

  Limousine service

  Airfare for flights to seminars and business trips

  Rental cars (short-term)

  Business Trips – Necessary documentation for reimbursement includes: 1) name of seminar or company and names of people you met with, 2) registration card for meeting attended; 3) travel tickets; 4) hotel bills.

  Per Diems (dependent upon specific situations - contact your Business Center Manager)

  Travel Expenses while away from home (in accordance with the Internal Revenue Code).

Tuition
(100 percent reimbursement – no grade required)

  Tuition credits pertaining to your profession that are not minimum requirements for your profession, as described in Internal Revenue Code.

  Seminars related to your profession

All requests for reimbursement must be accompanied by receipts 5 days prior to receiving reimbursement. Any expense in excess of $25 must include business purpose for the expense.

Total employee expenses may not exceed 50% of employee's gross salary. Exceptions are made for medical-related expenses and per diems.

List of Common Business Deductions

To help you decide whether a particular expense is likely to be deductible, we've provided a list of the most common business deductions.

List of common deductible expenses:

• advertising
• bad debts from sales or services (for those using accrual accounting)
• bank fees on business accounts
• car and truck expenses
• commissions and fees
• cost of goods sold
• depreciation
• dues for trade associations and other not-for-profit, business-related organizations
• employee benefits
• gifts to customers, suppliers, etc.
• insurance (casualty and liability)
• interest
• legal and professional services
• meals and entertainment
• office expenses
• pension and profit-sharing plans
• publications
• rent or lease expense
• repairs and maintenance
• services performed by independent contractors
• supplies and materials (not included in cost of goods sold)
• travel expenses
• utilities
• wages of employees

If you don't see an item you're interested in on this list, check our list of common nondeductible expenses as well.  The IRS form on which these deductions must be reported will depend on your form of business operation, that is, whether you're a sole proprietorship, partnership, LLC or corporation.  If you operate your business as a sole proprietorship, you will report business deductions on Schedule C of Form 1040. (You can use the simpler Schedule C-EZ if your business expenses are under $2,500, you do not have inventory or employees, you use the cash method of accounting, and certain other requirements are met.) If you do business as a partnership, you'll file Form 1065. If you operate as a corporation, you'll file Form 1120-A, Form 1120, or Form 1120-S for S corporations.

Business Expenses

Business expenses that are ordinary and/or necessary for your business may be deductible. Ordinary means it is a common expenses in your field. Necessary means it is helpful and appropriate for your business. You will need to keep your canceled check and your invoice as proof.

Typical Expenses

Advertising: You do not have to prove it increased your business.

Car & Truck: you are required to keep a written record of our mileage. Standard mileage rate usually yields a higher deduction. In addition to the mileage rate, you also get the cost of parking and tolls. You cannot include commuting mileage.

Commission & fees: Expenses for services performed by nonemployees.

Interest: Related to business loans including credit card interest if credit card is used 100% for business.

Legal & professional services: Includes fees charged by accountant, lawyers and tax preparers.

Office: If you do not meet the requirement for Office-In-Home, you can still deduct your office expenses. This includes supplies, equipment telephone and furniture.