I realize you are probably sick of hearing about income taxes, and I am sorry about that, but it is all I think about these days. Rest assured it will all be over in a month. Twenty seven days, to be exact. Not that I am counting.
Today I present you with a few basic guidelines to follow when getting ready for your tax appointment. If you do not use an accountant but choose to prepare your own taxes instead, do these things anyway. If they make an accountant's life easier at tax time, they will make your life easier at tax time.
- Open your mail. If it turns out to be a tax document, do not put it back in the envelope. Unfold the document and lay it flat. Place the envelope in the recycling bin. Pick up next piece of mail. Lather. Rinse. Repeat.
- Fill out your tax organizer. If your accountant sends you a tax organizer, fill it out. At the very least, look at each page to see what was on your return last year (prior year amounts are "proformaed") and make sure the pile you started at #1 above includes those same items for this year, if applicable. In fact, put that pile of documents in the same order as it appears in the organizer. Your accountant will think kindly of you.
- Staples are not your friend. Your accountant often photocopies your tax documents to have one for the file while returning the original to you. Today's photocopy machines have feeders that can accommodate a stack of documents of varying size and orientation. Unless they are stapled. Stapled documents give the machine a hernia and it complains. Not only does your accountant have to remove the staple and put the pages back in the feeder to start over, he or she has to open a minimum of three (often more) compartments on the copy machine to clear the jams that occurred as a result of one, tiny staple. Never, never staple documents you provide to your accountant. If you insist on segregation, paper clips are your new best friend.
- Provide an email address. Even my seventy nine year old mother uses email. Get with the program!
- Provide the cost basis for any stock sales. Did you sell stock, bonds, or mutual funds during the year? Investment companies usually provide basis information with their year-end statements but they do not always have complete records. Or maybe you do not use an investment company and keep track of your investments yourself. Either way, make sure to provide the cost basis for each stock sale. If you do not, your return will be delayed while the accountant contacts you to request the basis info. You will have to provide it then, so why not just provide it up front and be done with it?
I am often excited to see the green-striped envelope that our organizers go out in come back with the client information. Hooray, I think, the client actually filled out the organizer! Woe is me when I open it to find a pristine organizer: not a mark on it. Sometimes the envelope has not even been opened. (See #1) Why does the client send it back? Do they not realize what a slap in the face that is? Here is your tax organizer back, you silly accountant. You did not expect me to waste my time filling it out, did you? That is what I pay you for. And by the way, my bill is too high.
It is the simple things we treasure during tax season. Direct access to complete tax information. An easy way to contact you with questions. No staples. And if you want to throw in a little chocolate along the way, that would be okay, too.
Employee No. 6