NEW YORK (MainStreet) – Shady advertisers might tell you that all you need to file your taxes is your last pay stub of the year, but the truth is that you really can’t prepare your federal or state income tax returns until you have received all of your W-2 forms. And if you have a brokerage account, you cannot properly complete your returns until you get the final “corrected” copy of the Consolidated Year-End Tax Reporting Statement.
There are still a few weeks left until employers must provide 2011 W-2 forms to employees by Jan. 31, which also applies to most 1099 and 1098 forms. The deadline for 2011 Form 1099-B, which reports the gross proceeds from the sale of investments for the year, is Feb. 15.
In the meantime, you can get a head start on your 2011 tax return while waiting for your forms to arrive by doing the following:
- Keep everything together. It’s a good idea to create a repository for all of the tax forms and reports you will receive in the next several weeks. You can use a file folder, a manila envelope (10x13 inches would be a good size), or a plastic or cardboard container. As W-2s, 1099s, 1098s, K-1s, and anything else that says “important tax information” arrive in the mail, put them in this repository until you have received everything.
- Gather paperwork. Go through your current files and gather all the paperwork and documentation you will need to prepare your return. Pull out the “Settlement Statement” for the purchase or sale of real estate or mortgage refinancing, letters of acknowledgement for cash contributions and receipts for donating used clothes, books, household items, or furniture to Goodwill or the Salvation Army, real estate tax statements, the invoice for any motor vehicle purchases, statements of tuition and room and board payments and receipts for books and materials for dependents in college.
- Keep track of medical and other tax-deductible expenses. Go through your check register and checking account statements and make a note of checks written to doctors, dentists, therapists, drug stores, churches and charities, and for direct payments of medical, dental, eyeglass, long-term care insurance premiums and other tax-deductible expenses. Also review your 2011 datebook for visits to doctors, dentists and other health care providers to determine the total number of miles driven, or total bus and taxi fares, for medical care during the year.
- Fill out a “tax organizer.” Some tax preparers provide clients with a “tax organizer” and while I do not send out an official organizer, I do mail my clients special forms and worksheets for medical expenses, charitable contributions, employee business and home office expenses, and rental expenses early each January. While waiting for your W-2 forms, you can start to fill out these organizers, forms and worksheets.
- Gather essential information for child and dependent care expenses. To claim a credit for child and dependent care expenses, you will need the Social Security number or Employer Identification Number for each care provider. If you do not already have these numbers, be sure to contact the various providers to get them. If a provider refuses to provide you with a number, mail them a W-9 form and document your attempts to get the number (and the provider’s refusal).
- Check your name. If you have changed your last name during the year as a result of marriage or divorce or for any other reason, and you have not already notified the Social Security Administration, do so now by going to www.ssa.gov and applying for a new card. If the name and Social Security number entered on your tax return does not exactly match the name and number in the SSA records, your refund may be delayed or denied.
Are you using a tax preparer but aren't sure you have everything you need? Check out MainStreet's look at What to Take to Your Tax Preparer!