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Kick off the New Year… by getting organized! – Tax Tip of the Week December 30, 2009

Posted by bradstreetblogger in : Tax Tip , trackback

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Organizing your financial records is a great way to make tax preparation less taxing, and ensures you don’t miss any potential deductions.

For your 2009 tax return, create a file to store all the W-2s, year-end statements, 1099s, etc. that will be arriving in your mail box in January and early February.  In prior years, the IRS required that 1099s be sent no later than January 31st of each year.  A couple of years ago the IRS extended that deadline to February 15th of each year.  This was done as an attempt to curtail the number of those irritating “Corrected 1099s” the brokerage firms issue each year.

Secondly, look at your 2008 tax return to determine what records you should be looking for to complete your 2009 tax return.  The IRS requires you to have substation of each deduction you take—this means receipts.

Start now to organize for 2010.  At a minimum, create a 2010 file to store receipts as they accumulate during the year.  Better yet, create a separate file for each income source and deduction shown your tax return.  For example, create files for the following:  Income (pay stubs), brokerage statements, rental income, medical expenses, mortgage statements, charitable contributions.  Having these files in place throughout the year will make it a lot easier for you this time next year.  Also create a file of items you are unsure about, tax related news articles you read or questions that come up during the year.  This way, you won’t forget about them at tax time.

If you take any type of mileage deduction (business miles, medical miles, and/or charitable mileage) the IRS requires you to keep contemporaneous records.  This means you need to keep a daily log of the miles you drove.

These are only minimal suggestions.  Review the Tax Preparation Checklist on our web site. And for additional ideas to get organized, the IRS provides some good suggestions in their Publication 552.

You may not keep that resolution to go to the gym every day in 2010, but we do hope you can fulfill this resolution.

For specific organizing ideas for you, give us a call.

Rick Prewitt – the guy behind TTW

For specific organizing ideas or tax preparation advice, give us a call. In Dayton, call 937-436-3133 and in Xenia, call 937-372-3504. Or visit http://www.bradstreetcpas.com.

…until next week.

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