Tax Preparation Checklist


Tax season can be a stressful time for many individuals and families. The key to a smooth tax filing process is being organized and prepared. To help you stay on track and ensure you don’t miss any important information, here is a tax preparation checklist to guide you through the process.

Gather Your Basic Information

Start by gathering all the necessary basic information for your tax return. This includes your Social Security number, the Social Security numbers of your spouse and dependents if applicable, and your previous year’s tax returns. Having these documents on hand will make it easier to reference and fill out your forms accurately.

Compile Income Documents

Next, gather all your income-related documents. This includes your W-2 form from your employer, 1099 forms for any freelance or self-employed work, and any other forms reporting additional income such as rental income or interest earned from investments. Make sure you have copies of all these forms, as they are crucial for properly reporting your income.

Organize Deduction Documentation

If you plan to claim deductions on your tax return, be sure to have all the necessary documentation in order. This includes receipts and records for medical expenses, property taxes, mortgage interest, charitable contributions, and any other deductions you plan to claim. Having this documentation organized and readily available will help ensure accurate reporting and potentially maximize your tax savings.

Collect Investment and Retirement Account Statements

If you have investments or retirement accounts, gather all your year-end statements. This includes statements for brokerage accounts, mutual funds, and any retirement accounts such as IRAs or 401(k)s. These statements will provide you with the necessary information to report any taxable gains or losses on your tax return. It’s also essential to have accurate records of your contributions and distributions for retirement accounts.

Compile Education Expense Records

If you or your dependents incurred education expenses during the tax year, gather all related records and receipts. This includes tuition fees, books, and supplies, as well as any student loan interest payments. These expenses may be eligible for educational tax credits or deductions, so having accurate documentation is crucial.

Gather Health Insurance Information

Under the Affordable Care Act, individuals are required to have health insurance coverage. Whether you purchased insurance through the marketplace or have coverage through an employer, gather all relevant insurance information to properly complete your tax return. This includes Form 1095-A if you purchased insurance through a marketplace or Form 1095-B or 1095-C if you have coverage through an employer.

Organize Business Expenses

If you are self-employed or have a small business, it’s important to organize all your business-related expenses. This includes receipts for office supplies, equipment, mileage, travel expenses, and any other costs associated with running your business. These expenses can be deductions that help reduce your taxable income, so keeping detailed records is essential.

Check for Additional Credits and Deductions

In addition to the deductions and credits mentioned above, there may be other tax breaks and incentives that apply to your situation. Check for any potentially applicable credits, such as the Earned Income Tax Credit (EITC) or the Child Tax Credit. Researching and understanding these credits can help you maximize your tax savings.

Double-Check for Errors and Completeness

Once you have gathered all the necessary documents and information, it’s important to review them carefully. Double-check that all the information is accurate, complete, and free of errors. Errors or missing information can delay the processing of your tax return or even result in penalties or additional taxes owed.

Consider Professional Help

If your tax situation is complex or if you are unsure about any aspects of the tax return process, consider seeking professional help. Tax preparers or Certified Public Accountants (CPAs) can ensure that your return is accurate, maximize your deductions and credits, and help you navigate any complex tax situations.


By following this tax preparation checklist, you can stay organized and ensure you have all the necessary information to complete your tax return accurately. Being prepared not only reduces stress but also increases the likelihood of maximizing your deductions and credits, potentially resulting in a larger tax refund or lower tax liability. Remember, it’s never too early to start preparing for tax season, so get organized and stay on top of your tax responsibilities.

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Tax Saving Tips

New FinCEN Filings Go into Effect on January 1 

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For existing businesses, the Corporate Transparency Act (CTA) goes into effect on January 1, 2024, and imposes a brand-new federal filing requirement on most corporations, limited liability companies, and limited partnerships and on certain other business entities.  

No later than December 31, 2024, all non-exempt business entities must file a beneficial owner information report (BOI report) with the Financial Crimes Enforcement Network (FinCEN)—the Treasury Department’s financial intelligence unit. 

The BOI reports must disclose the identities and provide contact information for all of the entity’s “beneficial owners”: the humans who either (1) control 25 percent of the ownership interests in the entity or (2) exercise substantial control over the entity.  

Your BOI report must contain all the following information for each beneficial owner: 

FinCEN will create a new database called BOSS (Beneficial Ownership Secure System) for the BOI data and will deploy the BOSS to help law enforcement agencies prevent the use of anonymous shell companies for money laundering, tax evasion, terrorism, and other illegal purposes. It will not make the BOI reports publicly available. 

The CTA applies only to business entities such as corporations and LLCs that are formed by filing a document with a state secretary of state or similar official. It also applies to foreign business entities that register to do business in the United States. 

Some businesses are exempt from the CTA, including  

The CTA does not apply to sole proprietors or general partnerships in most states. But it does apply to single-member LLCs, even though the tax code disregards such entities and taxes them on Schedule C, E, or F of Form 1040. 

The initial BOI report filing does not expire, and you don’t need to renew it. But you have an ongoing duty to keep the BOI report up to date by reporting any changes to FinCEN within 30 days of occurrence. 

Failure to comply can result in hefty monetary penalties and up to two years in prison. 

Beat the Net Investment Income Tax  

Here is some important information regarding the net investment income tax (NIIT), which may be relevant to your financial situation. 

NIIT Overview 

The NIIT is a 3.8 percent tax that could apply if your modified adjusted gross income (MAGI) exceeds $200,000 (single filers), $250,000 (married, filing jointly), or $125,000 (married, filing separately). It targets the lesser of your net investment income or the amount by which your MAGI exceeds the thresholds. 

What Qualifies as Net Investment Income? 

Net investment income includes income from investments (such as interest, dividends, and annuities), net rental income, and income from businesses in which you don’t materially participate. It does not include wages, self-employment income, tax-exempt income, and distributions from qualified retirement plans. 

Reducing or Avoiding the NIIT 

To mitigate the NIIT, it’s crucial to understand what’s triggering it—your net investment income or your MAGI. Here are some strategies: 

  1. Invest in municipal bonds. Pick bonds that are exempt from the NIIT and from federal and state taxes. 
  2. Donate appreciated assets. The correct asset donation avoids the NIIT and provides a tax deduction. 
  3. Avoid selling appreciated stock. Buy growth stocks that don’t pay dividends, and hold them.  
  4. Utilize Section 1031. It avoids MAGI and net investment income, and defers taxes. 
  5.  Invest in life insurance and annuities. This typically defers tax until withdrawal. 
  6. Harvest investment losses. This can offset gains and reduce taxable income. 
  7. Invest in rental real estate. Structured correctly, this can minimize taxable income. 

Other Strategies 

The NIIT can be complex, but strategic planning can significantly reduce its impact. 

Deducting Start-up Expenses for a Rental Property 

Are you interested in becoming a commercial or residential landlord?  

If so, you’ll likely have to shell out plenty of money before ever collecting a dime in rent. The tax code treats some of those monies as start-up expenses. 

Start-up expenses are some of the costs you incur before you offer a property for rent. There are two broad categories: 

  1. Investigatory  
  2. Pre-opening costs, such as advertising, office expenses, salaries, insurance, and maintenance costs 

Your cost of purchasing a rental property is not a start-up expense. Rental property and other long-term assets, such as furniture, must be depreciated once the rental business begins. 

On the day you start your rental business, you can elect to deduct your start-up expenses. 

The deduction is equal to 

When you file your tax return, you automatically elect to deduct your start-up expenses when you label and deduct them on your Schedule E (or other appropriate return).  

Costs you pay to form a partnership, limited liability company, or corporation are not part of your start-up expenses. But under a different tax rule, you can deduct up to $5,000 of these costs the first year you’re in business and amortize any remaining costs over the first 180 months you are in business. 

Note that the cost of expanding an existing business is a business operating expense, not a start-up expense. As long as business expansion costs are ordinary, necessary, and within the compass of your existing rental business, they are deductible. 

The IRS and tax court take the position that your rental business exists only in your property’s geographic area. So, a landlord who buys (or seeks to buy) property in a different area is starting a new rental business, which means the expenses for expanding in the new location are start-up expenses. 

You can’t deduct start-up expenses if you’re a mere investor in a rental business. You must be an active rental business owner to deduct them.