Are you ready?

Tax season has officially started for many retail tax prep outlets (H & R, etc.) and individual preparers.  E-file opens on Friday, Jan 14 and most preparers are getting their offices in organized and ready to file your taxes.  But, are you ready?  I know April 15 (this year its April 18), seems sooo far away, but as we all know it sneaks up on you.  Here are a few things you should do before you visit your tax preparer:

1. If you worked more than 1 job during 2010, be sure you have W2s from all employers.

2. If you started your own business in 2010, be sure you have a record of all income, expenses and miles driven.  Also, keep receipts (for the IRS, not your preparer).

3. If you have a mortgage, have your 1098 Mortgage Interest and Property Tax bill with you.

4. If you (or children) attended a college during 2010, be sure to have a record of all expenses paid.  Including any paid by a scholarship, grant or student loan.  You may have also received 1098-T from your school.

5. If you have started repaying your student loans, the interest is deductible.  Be sure to have your 1098-E from your bank handy.  This form has the amount of student loan interest paid during the year.

6. For those of you with children:

• under age 13: amounts paid for child care are deductible.  Have your care provider give you a written statement with their tax identification number and the amount you paid for 2010.
• under age 17: these kids still qualify for the child tax credit (up to $1000/per).
• under age 19: provided you fall into the income limits, they will qualify you for the earned income credit.
• under age 24: although they have been adults for awhile, if you are paying for their higher education expenses, you either deduct or receive a tax credit.  Be sure to read #4 & #5.

Well that covers most tax payers.  However, the IRS has not finished the Schedule A (itemized deductions) or the education credits, so tax payers with these items will not be able to file until the IRS has finalized the forms and releases the updates to your preparer.  That said, there is no reason you still shouldn't see your preparer as early as possible.  If you are entitled to a refund, your preparer can file your taxes on the first day available.  If you are going to owe taxes, at least you will know how much and have approximately 4 months to pay.

As always, please leave a comment or question.