Kostecke CPA

A Tax Preparation Checklist Can Save You Time and a Lot of Grief

Your tax preparation checklist can save you time and a lot of griefLast year at around this time I provided some tips on how to save money on your taxes after December 31st. This article is also about saving you money and quite possibly a bit of time.

Perhaps you have just received your 47-page tax organizer in the mail and you’re wondering “Why am I paying somebody to do my taxes!? It seems like I’m doing all the work! It takes me hours to fill this thing out. Do they really need me to do this?”

The Value in a Tax Preparation Checklist

A tax organizer or detailed tax preparation checklist is a handy way to save yourself a lot of time and trouble. Your checklist accomplishes three things:

  1. Identifies any changes in your taxable income, deductions, or filing status,
  2. Helps ensure that your tax return contains everything it should, and
  3. Alerts your tax preparer to any new information that may affect next year’s taxes so that proper tax planning can be done.

When you complete your tax organizer, you help ensure that your tax return is accurate and you may be saving your tax preparer some time, and that can translate to savings for you.

What’s Important?

In this article my advice follows a few common themes, summarized as follows:

  • Try to answer all the questions!
  • If you have a supporting document, such as a W-2, 1099, etc., you do not have to copy this information into the organizer.
  • If you don’t have a supporting document, you need to write the information into the organizer where indicated, and
  • If you want to send your tax preparer your own summary of information for your taxes, rather than fill out all of the organizer pages, you can do that. But please, do not copy the information from your summary to the organizer so that there are two records of the same information.

The Checklist, Part by Part

So let’s go through the tax organizer part-by-part and discuss how to fill it out most efficiently:

The Questions

Do I need to answer all the questions?

Yes, you should try to answer all the questions.

These questions alert your tax preparer of changes in your life which may need to be addressed on your tax return. Answering the questions helps your tax preparer to understand your situation better and to  determine your eligibility for certain deductions or credits.

A lot of times, the questions are hard to understand and you aren’t sure how to answer them. I tell my clients to just circle the questions they aren’t sure about and put a question mark next to them, and we can talk about them later.

Personal Information/Bank Information

Do I need to look at this (the checklist) if it’s already filled out?

Yes, please go through the information to see if there is anything that has changed or is incorrect.

  • Contact information, such as phone numbers and email addresses, tends to change over time. Please make corrections to this information as needed so your tax preparer can easily reach you.
  • Birthdates are also important, and they are occasionally incorrect. It’s important that these dates are right so your tax preparer knows exactly how old your dependents are, and how old you are.
  • Questions about health insurance coverage for you and your dependents are particularly important this year, because it is the first year of the individual mandates associated with the Affordable Care Act.
  • Make sure your bank information is correct if you are having a refund direct-deposited or a payment direct-debited. By correcting this information on your organizer, it prevents this item from being inadvertently missed before the return is filed, which would delay your refund.


I have to give my tax preparer copies of my W-2 anyway. Do I have to fill this information out on the organizer too?

No, don’t waste time filling this out. Your tax preparer can get all this information from your W-2 or 1099.  If the list of W-2s and 1099s includes any employers that you did not work for in the past year, make a note of that in the organizer.

If you have income as a contractor and did not receive a 1099, you will have to write that into the organizer so it can be reported on your tax return.

Investment Income

There’s a lot of information to include for dividends, interest, and gains/losses. Should I fill this out or just give my tax preparer the 1099s?

You need to provide 1099s and the yearend statement with supporting details for all your investment accounts to your tax preparer. Nothing needs to be written down in the organizer except for the following:

  • Investment basis and acquired date, if not included on the 1099 or supporting statements
  • A note next to any 1099s listed for closed accounts
  • Investment information for items not documented on a 1099, such as sale of collectibles, seller-financed mortgage interest, etc.

Business Income—Rental Property—Farm Income

Do I have to fill out the sheets for business income/rental property income/farm income?

If you have financial statements from your accounting software, you do not have to fill out the business income sheet of the organizer. You probably do need to include details on business mileage since that is usually not on your financial statement.

On the organizer page for your business income, simply refer to the financial statements included with the rest of your tax information. The same goes for your income and expenses from your rental property or farm.

As a tax preparer, I prefer getting the underlying books and records, such as the QuickBooks file, rather than a printed copy of the financial statements. That way I can see all the details of what is included in the accounts, whether or not the bank statements have been reconciled, details of fixed asset additions and deletions, and if there are corrections and changes required. Providing all the details saves time with questions that can’t be answered by looking at the financial statements alone.


What about that page for listing all your deductions? Can I just give you my list?

Most tax preparers have questions about certain deductions and will need to see documentation anyway. Here are the common deductions and how to document them:

  • Real estate taxes—Include your real estate tax receipts, showing what you paid, and a copy of the real estate closing statements for property purchased or sold during the year, showing the prorated property taxes going to the to the buyer from the seller.
  • Mortgage interest—Include your 1098 mortgage statement. For mortgage interest not shown on a 1098, write down the information, including name(s) of the mortgage holders and their tax ID number(s) (social security number or business tax ID) on the organizer.
  • Charitable contributions have many documentation requirements, depending on how much you give, and whether it is cash or non-cash. Any donation with a value over $250 probably requires receipts and other documentation which you need to give to your tax preparer.

If you have a lot of items on your deductions page and you would rather provide a list of your own, that is great. Just refer to the list on the deductions page.

What you should not do is copy the same information onto the organizer, and include your list too. Then your tax preparer may feel they have to reconcile both documents and, if they are not the same, find out what the difference is. This takes more time and creates more confusion.

Foreign Investments and Foreign Bank Accounts

If you have a bank account or an investment account in a foreign country, you should provide details about this account to your tax preparer. There may be no need to report this account, except for income earned on the account. However, there are reporting requirements for these accounts that you and your tax preparer should be aware of and keep in mind so that nothing is missed.

Even if you only have signature authority over an account that you consider to be somebody else’s (your spouse’s, parent’s, child’s, etc.) you may be required to report this account.

If you have a domestic investment account (i.e. Chas Schwab, TD Ameritrade, Fidelity, etc.) that invests in foreign-based stocks, you do not have to worry about special reporting. Just provide your tax preparer with the 1099 and supporting yearend reports, and they should be able to handle the reporting of foreign income and foreign taxes paid.

Other Common Items

  • Higher education expenses and tuition—Include your 1098-T and write in any other expenses incurred over and above tuition, such as books. However, there is no need to copy over the 1098-T information into the organizer.
  • Dependent care—Include a copy of the statement you received for each child from your childcare provider. This statement usually includes all the information required for claiming the dependent care credit. If you do not receive a statement, then you will need to fill out the organizer sheet with the provider’s name, address, tax ID/social security number and amounts allocated to each child.

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