Many of the items on your tax preparation checklist depend upon your unique personal and business tax situation. However, there are several things you’ll definitely need to make the process go smoothly. Although the following tax preparation checklist is not meant to be all-inclusive, it provides many common items and documentation you will need to bring to your tax appointment.

Your Tax Preparation Checklist:

Bring your Social Security card and driver’s license. Unless you’re using the same tax accountant as last year, you’ll need these to verify your identity.

Don’t forget to include a copy of last year’s state and federal tax returns on your tax preparation checklist. The information on last year’s returns will help your tax accountant calculate this year’s tax return more quickly.

Unless you’re self-employed, you will receive a Form W-2, Wage and Tax Statement, from your employer. Employers are required to send your W-2 by January 31. If you don’t receive it by February, make a note on your tax preparation checklist that you need to call and remind them to send it to you before your tax appointment.

Bring all of your 1099 forms. Your tax accountant can explain all of the different types of 1099s, but generally these forms report income other than wages and tips. They are commonly used for reporting payments you made to independent contractors.

The mortgage interest you paid in 2010 should also be on your tax preparation checklist. This is Form 1098, and enables you to deduct your qualified mortgage interest to reduce your tax burden.

Bring records of your educational expenses and student loan interest paid. Tuition paid for college classes can provide tax credits, as can the interest you paid on any student loans in 2010.

Donations made to charitable organizations such as churches, the Salvation Army, and Goodwill are tax deductible, so remember to bring documentation of your contributions to your tax appointment.

Medical, dental, and eye care expenses may also be deductible. These include doctor bills, prescriptions, and health insurance paid out-of-pocket.

You can deduct a portion of your DMV registration fees from your income tax. Put your registration costs on your tax preparation checklist and consult your tax accountant for more information on registration deductions.

Do you pay or receive alimony? If you pay alimony, you may qualify for an income tax deduction. If you receive alimony, you may owe income taxes.

Add your childcare statement to your tax preparation checklist. Up to $3,000 per child can be claimed as an expense.

You may have taxable income when a debt is cancelled, such as debts resulting from a bankruptcy or other financial crisis. Record all cancelled debt on your tax preparation checklist, and ask your tax accountant how your cancelled debt affects your tax burden.

If you were laid off in 2010, note that unemployment benefits and severance pay are taxable. Any vacation or sick pay received after you leave a company is also taxable.

Put your gambling winnings and losses on your tax preparation checklist, as they are also deductible. Gambling income includes winnings from lotteries, raffles, casinos, and horse racing, as well as the fair market value of any prizes you won in 2010.

Remember to bring a profit and loss statement for each business entity if you’re self-employed. You should also bring a profit and loss statement for any rental properties when you meet with your tax accountant.

1. Automated Tax Reminders. With all the important tasks that you need to keep up with, adding income tax reporting and filing requirements is an important reason to have a good scheduling system in place. One action that you can take is to sign up for free emails alerts that will remind you of upcoming tax filing and reporting dates. Do this soon so to stay in compliance with tax reporting requirements.

2. Income Tax Organizer. If you are like many others looking to reduce the amount of taxes you pay each year then a good resource for you is a tax organizer. This tool will help you maximize the allowable deductions and credits that you can take but the key to its success is the commitment that you are willing to make in using it. Although most people reserve the use of the tool for tax filing it is also a handy aid in tax planning. Take it along with you to quarterly tax reviews so that you can discuss any questions you have with your accountant. Then make sure to take it with you when its time to prepare your return.

3. Tax Refund Tracker. Have you ever filed your income tax return and expected to receive a refund on a certain date but it never arrived? If you follow-up to check the status by phone then you may experience long hold times when call volumes are high. One solution to this is to track your refund online. You will need a copy of your income tax return handy and internet access. The process is very simple and it will save you lots of time. You can check the status of your federal refund and most states offer the feature, as well.

April 15th is the day that most American’s look towards with doom. Are you one of them? Are you sick of working hard every day, and having to give such a large percentage of your money to the government? Do you wish there was a way to beat the IRS, but legally? If so, you are one of millions.

There IS an under-utilized solution to this problem. I would like to take this opportunity to educate you about the benefit that a home based business can have on your tax burden.

When people think about the benefits of a home-based business, they often first think of the following: Financial gain, independence (not having to rely on your boss or a company to provide you with everything you need), and a sense of self worth and accomplishment.

Have you ever thought of a home-based business as a venue for Tax Relief? Most people don’t realize how much money they can save by starting their own home-based business. Even if your business doesn’t turn a profit right away, you can still benefit from the mere fact that your business exists and that you are attempting to turn a profit.

Also, your home-based business doesn’t have to be a full time deal. It is something that you can fit into your current lifestyle. You can continue to do what you are doing today, and add a home business.

The fact is that many people struggle with finances. But there are things that you can do legally to ease that burden. If you operate a home-based business, there are many deductions you will be able to take that will dramatically decrease the amount you have to pay to the IRS. I recommend that you consult with an accountant to find out exactly what you are legally able to deduct for your home-based business, but here are some possibilities:

Home Office Expenses:

Business expenses can include a portion of your rent or mortgage, real estate taxes, utilities, insurance, painting and repairs. The actually amount you can deduct depends on the percentage of your home used for business.

Traveling Expenses:

You can deduct your traveling expenses. This such as airfare, transportation, hotel, and other lodging expenses are all included. There is a limit to meal deductions. The best part is, if you plan properly, you can mix pleasure with business and still get benefits.

Entertainment Expenses:

You can deduct 50% of the cost of meals in restaurants, or an entertainment/sporting event as long as business take place before, during, or soon after the event.

Depreciation Expenses:

You can deduct property you purchase for the business that is intended to last longer than a year. This includes things such as: computers, office furniture, and machinery. You have the option of deducting a little each year or all at once.

Professional Services Expenses:

You may need help getting your business established. Fortunately, you can deduct any fees you pay for attorneys, accountants, consultants, and any other professionals related to the operation of your business.

Advertising Expenses:

The key to any business is advertisement. There are countless ways to advertise free, especially on the Internet. However, any advertising that you do will count as a business expense, and therefore can be deducted.

Taking a Loss:

Most home businesses do not turn a profit right away. Due to this, your home business expenses may exceed your income for a while. You may not deduct more than you make in any one tax year, but you may carry a loss over to the next year if it cannot be used in the tax year in which it occurs.

Starting Your Own Home Business

As you have read, there are many tax benefits to starting a home business. You don’t even have to return a profit immediately to take advantage of these benefits. Starting your own business is something that everyone should take into consideration.

The most important part of tax planning is to minimize your taxes. Income tax planning involves determining which tax laws apply to you. Every person has a different income situation that will fall under certain laws. To make sure you are reducing your tax liability, you need to create a tax plan, which can be done in three different ways.

The first way of creating income tax plans is through your adjusted gross income. The AGI is the result of subtracting and adding certain aspects to your income. Things like investments are added to your wages, while things like mortgage payments subtract from your wages. Higher AGI totals mean a greater tax liability. If you want to reduce your tax liability through your adjusted gross income, start a retirement plan like a 410k. When you add money to this plan, your income is reduced, which in turn lowers your tax liability.

A second way to reduce your taxes through a tax plan is through deductions. Most people assume that tax deductions are only for business owners. Itemizing your deductions is helpful. Many people can deduct things like health care expenses, car registration fees, the interest on your mortgage, and charitable gifts.

Tax credits are a third aid in your income tax planning. There are many different kinds of tax credits, and you won’t be eligible for all of them. Even a few, however, can help reduce the tax amount you would owe. There are college tax credits, credits for certain home renovations, and for adopting children. Most common is the earned income credit. Utilizing the credits that are available to you can help reduce how much taxes you will owe.

You can also reduce the amount of taxes you would owe by raising the withholding amount from your wages. Many people with dependents think it is better to claim zero dependents on W-2 forms because they get more of their paychecks. Actually, by increasing the amount that is taken out of your pay, you get a bigger refund on your income tax.

It is important to always keep receipts. You never know what can be claimed as a deduction. Purchases for home improvements, gas expenses, and anything related to your job could qualify. If your itemized deductions are greater than the standard deduction, you can choose them but you can use both types of deductions.

When people hear the question what is income tax planning, they often think it is just about filing your taxes properly, but it is more than that. It is about what you do before it is income tax time, throughout the remainder of the year. It is about making sure that you have everything set up so that you are making sure that you are doing everything that you can to lower how much taxes you will be responsible for.

First, if you feel that you will be unable to pay your taxes it is important to reach out as soon as possible to the government agency to whom you owe the back taxes whether it be a state agency or the federal agency in order to explain to them that you feel you will be unable to pay this and that you are in need of assistance. This is because if you do not explain this to them and they are forced to audit you for back taxes it may be construed as fraud that you did not attempt to pay them and also did not attempt to explain why you did not pay them.

Also the earlier you reach out to them the more likely you are to have the time necessary to have your case looked over thoroughly before you start incurring penalties and fees. It would be a very bad area though if you in fact have to pay more money than you originally owed in the event that a tax debt relief is not offered to you.

Typically, once it is apparent that you are unable to pay your taxes they will have to send out an auditing agent to check your resources and income to see if you are in fact unable to pay back what you owe. If it is determined that you are worthy of tax debt relief then the auditing officer will make a note of this and your obligations will be reduced by the amount that is determined by the agency.

Deducting tax preparation fees on Schedule A will provide little or no benefit for most taxpayers because the total miscellaneous deductions must exceed two percent of the taxpayer’s adjusted gross income to provide any benefit. In addition, the taxpayer’s total itemized deductions must usually exceed the standard deduction amount to provide any tax benefit.

The IRS ruled in Rev. Rul. 92-29 that taxpayers may deduct tax preparation fees related to a business, a farm, or rental and royalty income on the schedules where the taxpayer reports such income.

A taxpayer who is self-employed may deduct the portion of the tax preparation fees related to the business, including schedules such as depreciation schedules, on Schedule C of Form 1040 as a business expense. The tax preparation fees deducted on Schedule C save the taxpayer income tax and self-employment tax.

A taxpayer who is self-employed as a farmer would deduct the portion of the tax preparation fees related to the farm on Schedule F of Form 1040. The tax preparation fees deducted on Schedule F save the taxpayer income tax and self-employment tax.

A taxpayer who has rental and/or royalty income reported on Schedule E of Form 1040 would deduct the portion of the tax preparation fees related to the rental and/or royalty income on Schedule E. The tax preparation fees deducted on Schedule E save the taxpayer income tax. However, the tax preparation fees deducted on Schedule E do not save the taxpayer any self-employment tax because the rental and/or royalty income reported on Schedule E is not subject to self-employment tax.

A taxpayer may not deduct all of the tax preparation fees on Schedules C, E, and F of Form 1040. The tax preparer should provide a statement to the taxpayer that indicates how much of the tax preparation fee was related to the taxpayer’s business, farm, and/or rental and/or royalty income. The taxpayer may deduct the remainder of the tax preparation fee only on Schedule A.

If the tax preparer does not provide the taxpayer with a detailed statement showing how much of the tax preparation fee was for the taxpayer’s business, farm, and/or rental and/or royalty income, the taxpayer shoud ask the tax preparer for an itemized statement. If the tax preparer will not provide an itemized statement, the taxpayer should use a reasonable allocation. In that case, the taxpayer should seriously consider using a different tax preparer next year.

Here is an example. Assume that the taxpayer is self-employed and also owns rental real estate. The tax preparation fee for the taxpayer’s Form 1040 and related schedules for 2005 was $600. The tax preparer states that of the $600 total fee, $300 was related to the taxpayer’s business, $200 was related to the rental real estate, and the remainng $100 was related to other parts of the taxpayer’s income tax return. The taxpayer paid the $600 in February 2006.

On the taxpayer’s income tax return for 2006, the taxpayer may deduct the $600 tax preparation fee as follows: $300 on Schedule C, $200 on Schedule E, and $100 on Schedule A as a miscellaneous deduction.

If your’e one of the many suffering under the mounting strain of bills, mortgages, and taxes, you may want to consider your financing options. Rather than paying thousands in penalties and late fees, you may want to finance your taxes to provide a little financial relief to you and your family. Here are three tips for financing.

1. Understand the consequences of not paying your property taxes.

Unpaid taxes lead to a tax lien. A tax lien essentially means that whomever you owe taxes to has a legal claim on your property. In the short term, having a tax lien placed on your property means that you’ll suffer from bad credit and have trouble financing any major new purchases, such as a car. In the long term, a tax lien means that your home can be sold out from under you in order for the city or state to collect on the taxes you owe.

Meanwhile, the longer you wait to pay your taxes, the more the late fees start to build up. By the time you finally pay them off, you may end up paying much more than you originally owed thanks to the penalties and interest fees. By the time you finally pull together the money you need to pay your $10,000 property tax, you may end up owing another $4,000 or more in fees.

2. Find a reputable property tax loan company to help you.

Fortunately, there is a way out of the tax dilemma. There are lending companies who specialize in paying off taxes and related late fees. You’ll still be paying interest on a loan with the tax financing company, but the debt you incur will not mount as quickly as it would have in the hands of the tax assessor.

After the company loans you the money you need to pay off your taxes and late fees, it takes over your tax lien. Since the tax loan company will own your tax lien, make sure you do your homework and check into any complaints about the various tax loan companies you’re considering before choosing to do business with them.

3. Stay current with your loan repayments.

When you get a tax loan company to help you, make sure that you stay current with your loan repayments. Otherwise, because the company owns your lien, you could still lose your home. Don’t treat a property tax loan as the permanent solution to your problems; treat it as a stopgap measure that temporarily solves your tax problem as you get your financial feet under you again.

By following these three tips, you will be well on your way to recovering from your property tax crisis. Working with a reputable tax loan company will save you thousands of dollars as you resolve your financial problems.

“Why so many?” I asked.

“My son is stationed overseas,” she said. “He asked me to pick them up.”

“You shouldn’t have to do this,” I told her. “It’s the base commander’s job to make sure the troops have the forms they need.”

“I know,” she replied. “I’m the base commander’s mother.”

Tax Credits, Income and Deductions

Though there are several ways to lower the amount of money you pay the IRS, they can be summarized under three basic categories:

• Adjusted Gross Income (AGI) – All your income, from all sources – minus adjustments for tax relief. With enough knowledge, and choosing the right adjustments, you may be able to reduce your AGI to receive tax relief. These adjustments can include student loan interest, traditional IRA or 401K contributions, paid alimony or paid child support

• Deductions – Between standard deductions, for which almost anyone is eligible, and itemized deductions, you may be able to substantially lower your tax debt pay out. These forms of tax relief may include personal property taxes and medical expenses, as well as mortgage interest, tax preparation fees and charitable donations, to name a few.

• Credits – Tax credits lower your tax liability dollar-for-dollar. Earned Income Credit (EIC) is a common tax credit for those with a qualifying dependent, and the Hope Credit and Lifetime Learning Credit are two well-known credits for college students. You may also be able to receive tax relief by saving for your retirement or if you have adopted children.

The following is a list of techniques that can be used by an individual to attain maximum benefits by utilizing the tax returns wisely:

1) Pay Off High Interest Debt:
The first and the most important place where you can spend you tax refund check is, while paying the bills of your high interest credit cards debt which will provide you with greater tax returns next year. This is because the interest rate on the debt goes down, as the balance you owe to the credit card company goes down and you will be saving a good percentage of interest per year on the balance that you managed to pay off.

2) Invest In Emergency Savings:
If you are unable to compile by the first factor and don’t have high interest credit cards, you could try and invest your tax refund check in the emergency saving account. This will help you in long term if you face any medical issues or put down from your job etc. In such situations rather that burrowing money from the credit card companies or taking loans from the banks at higher interest rates, you can lend yourself some money from this emergency saving account for free and without any risk or trouble.

3) Invest Money For Retirement:
Even if you don’t have a high interest credit card or an emergency savings account, but you managed to save some money out of your refund in your retirement account, you definitely are on an upper hand. You can also invest you tax refund check into a traditional or Roth IRA which is definitely a good option to save some money for the future.

4) Real Estate Investment:
As the real estate market is rapidly growing, so investing your tax refund money in the real estate is a really good option. Moreover, if you are a mortgage holder, then by paying of your principal amount early through the tax refund money will definitely help you save some money in the interest.

5) Invest In College Savings Fund:
Investing the tax refund money for your child’s education is a really good option. The earlier you start investing, the more profit you will gain over the years.

The above mentioned facts may not seem overwhelming in front of the luxuries like buying a LCD TV, Cruising etc but looking forward to the long term benefits that keeps you financially stable and help you survive at the time of crisis, the significance of tax refund saving techniques definitely overruns the short term luxuries.

However, there are still other documentations that you may need to keep for a longer period for various reasons:

• If you made a capital gain loss and you need to deduct the loss against future taxable income, then you will need to keep the loss documentation for each year you deduct the losses and therefore, you will need the loss documentation at least for 4 years after the year that you made such deductions.

• If you made major renovations to your house, you will need to keep the receipts and other adjustments documentation together with your records for the purchase of the house until you sell the house. This is because you will need the support documentation when calculating the capital gain tax on the sale of the house.

• If you sold your property under a 1031 exchange, then the sales agreement support documentation will be required as long as you are receiving the sale exchange deposits. You should keep the documentation for at least 4 years after you receive your final deposit and had wrapped up the sale.

• If you had any carry forward funds such as business losses carried forward, deferred tax carried forward from sale of a house, and a passive loss carried forward, you will need the relevant documentation until you have exhausted the carry forward and 4 years thereafter.

• If you are disabled and take credits on taxes because of your disability, then you will need to keep the record from a medical practitioner that stated that you are disabled to keep evidence of the date you were officially declared disabled.

• If you make retirement contributions, keep the contribution statements, such as the IRS Form 8606, Form 5498, and Form 1099-R, until you receive the final distribution from your retirement fund.

• At times, you may be required to take photographs as support documentation. This comes to play when you have a home office and when claiming casualty or theft loss deductions.

For the rest of the support documentation such as paystubs, copies of your tax returns, fund distribution forms, investment records, bank statements, medical bills, and any other support receipts, you can file them for the four year period. When you can safely establish that you will not require them again, you can and should destroy the documentation (an option is to shred them) to protect your private information. However, it is always advisable to keep an electronic file of all your documents for future reference.