There is a deadline for different tax documents to be sent to taxpayers. Generally, most forms must be mailed by January 31. Taxpayers should ensure that they have and produce all their required tax documents when filing their tax return. Taxpayers should have an open conversation with their tax preparers before filing their tax return to ensure that all relevant documents are produced to show income and claim legal deductions.

The IRS would generally send taxpayers a CP2000 notice when they did not report certain income. If you fail to reply within the deadline on the notice, the IRS will assume that you agree with their determination and consequently start collection activities. As stated by the IRS, a CP2000 notice is issued when the “income or payment information we received from third parties, such as employers or financial institutions, doesn’t match the information you reported on your tax return. This discrepancy may cause an increase or decrease in your tax or may not change it at all”.

Checklist to Consider for Your Tax Filing

Personal information

  • Last year of income tax return if you are a new client. 
  • Name, address, Social Security Number and Date of Birth for yourself, spouse and dependents. It is important that the name on the social security card matches that on the return. If filing jointly, do not alternate the taxpayer and the spouse’s name because that usually creates delay in processing.
  • PIN Number from the IRS of any individual in the return who was previously a victim of identity theft. The return would be rejected without the PIN.
  • Dependent Provider, Name, Address, Tax ID or Social Security Number to claim childcare credit.
  • Banking information if Direct Deposit Requested. Direct deposit speeds up the refund.
  • Copy of Social Security Card of individuals in the tax return.
  • Copy of driver license of taxpayers.
  • Birth certificates for children or other documents that show taxpayers are eligible to claim the dependent.

Paid tax return preparers are required under Treasury Regulation to ask a number of questions and record the answers to meet specific due diligence requirements (1. Earned Income Tax Credit, 2. Child Tax Credit, Additional Child Tax Credit, Credit for Other Dependents, 3. American Opportunity Credit, 4. Head of Household Filing Status). A hefty penalty is assessed for each non compliance. The amount is adjusted yearly for inflation.

Income Data Required

  • Wages and/or Unemployment (W2s, others)
  • Interest and/or Dividend Income
  • State/Local income tax refund
  • Social Security Income (SSA-1099)
  • Pension/Annuity/Stock or Bond Sales
  • Contract/Partnership/Trust/Estate Income (1099s, K1s, others)
  • Gambling/Lottery Winnings and Losses/Prizes/Bonus
  • Rental Income
  • Self Employment/Tips
  • Foreign Income

Expense Data Required

  • Dependent Care Costs
  • Education/Tuition Costs/Materials Purchased
  • Medical/Dental
  • Mortgage/Home Equity Loan Interest/Mortgage Insurance
  • Gambling/Lottery Expenses
  • Real Estate Taxes
  • Estimated Tax Payments to Federal and State Government and Dates Paid
  • Home Property Taxes
  • Charitable Contributions Cash/Non-Cash
  • Purchase qualifying for Residential Energy Credit
  • IRA Contributions/Retirement Contributions
  • Home Purchase and Sale Statement
  • Moving Expenses for military members
  • Profit and Loss Statement for business owners and Self employed.

The above list is not exhaustive. Ensure that you produce all your tax documents when filing your tax return. Do not assume that a certain tax document is not relevant or not needed to be produced. Remember that the Internal Revenue Service received all your tax documents. If you have not filed for a number of years, it is recommended to request copies of your tax documents from the IRS before you file.

Pablo recently received a tax due notice of approximately $200,000 because of a home sale in 2021. He alleged he was told by the preparer that he did not have to report it because he did not receive a form 1099-S. Marilyn did not remember to report the sale of her home in 2018 when she was filing her past years unfiled tax returns. A request of her tax account revealed that Form 1099-S was reported to the IRS. Taxpayers who sold their greatly appreciated residential home must provide receipts of major repairs that increase their basis in the property.

Getting your tax return filed by a qualified tax professional saves you money. You could also avoid the nightmare of dealing with an audit. Many tax preparers with credentials are listed on the IRS Directory of Federal Tax Return Preparers.

 Hiring a tax resolution expert is the best action a taxpayer could take in a tax matter before the IRS or a state tax authority. 

We offer FREE initial consultation!!!

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