It's tax time: Do you know where your records are? In the wake of sweeping tax law changes, one piece of advice remains the same � keep good records. Record keeping throughout the year helps taxpayers avoid surprises at tax time. This practice should start long before your W-2 Form arrives from your employer, according to Vermillion's H&R Block¨ Office.
"Although it takes time to set up a record keeping system throughout the year, it can save time in the long run � especially when taxpayers have waited to the last minute to file," says Steve Amerine. "Not only will it save time, but a thorough search through a check register, receipts, credit-card statements, and other documents can save money by ensuring that you pay the lowest possible amount of tax."
The following checklist includes some of the most common items taxpayers need to substantiate income, deductions and credits.
1. Statements of all income received during the year: W-2s; income from jury duty, hobbies and casual labor; unemployment compensation, or from the sale of stock or other property.
2. Money received from rents, royalties, alimony, pensions, prizes and tips.
3. Interest earned on savings accounts and other investments.
4. Dividends received from mutual funds and corporate securities.
5. Records of items eligible for deductions: medical insurance premiums, other medical and dental expenses, and interest paid on your home mortgage.
6. Amount paid for child-care while the taxpayer works or goes to school, plus the name, address and tax identification number of the child-care provider.
7. Charitable contributions and contributions to an IRA or Keogh plan.
8. Real estate and personal property taxes.
9. Union or professional dues, employment agency fees, educational expenses incurred to improve your job skills, tax preparation fees and investment expenses.
10. Job-related moving expenses.
11. Education expenses and statements for student loan interest.
Once all possible records are gathered, the preparation process can begin. Taxpayers who prepare their own tax returns can turn to IRS Publication 17, professional tax guides such as the H&R Block 1999 Income Tax Guide, or professional tax preparation software, like Kiplinger Tax Cut¨. To take full advantage of income tax laws and to understand new tax forms and schedules, however, taxpayers may feel more confident consulting a professional income tax preparer.
Founded in 1955, H&R Block Inc., is a diverse company with subsidaries offering tax preparation, mortgage services and financial products and services. The company served 18.2 million tax customers in 1998 primarily in the United States, Canada, Australia and the United Kingdom and handled 51 percent of all electronic returns filed with the Internal Revenue Service in the United States. Block Financial Corporation develops and provides Kiplinger Tax Cut¨ software for personal computers. Option One Mortgage Corporation offers a full range of mortgage products.
HRB Business Services is building a national accounting practice to provide a variety of accounting, consulting and other financial services. Quarterly results and other information regarding H&R Block are available on the company's Web site at www.hrblock.com.