Round one of filing the 2016 tax return is over. Extensions to file have been submitted. Hopefully, when the return is completed, no money will be due.
Now is the time to start organizing your return material. While it might be difficult to get a full year of bank statements or credit card statement online without requesting back-year material, it is a necessary first step.
Review, or pay your preparer to review, your financial documents for forgotten items such as charitable contributions, business expenses or wages from a job you left last January and forgot about.
Do you own a business? Are you in a partnership, a member of a Subchapter S corporation, engage in “day trading,” belong to an investment club, buy or subscribe to professional journals, attend the Money Show in Orlando? What are your out-of-pocket costs?
Think about deducting these expenses.
You should also consider what your anticipated 2017 revenue might be. That can influence your current spending and how you might deduct the costs.
Organizations such as partnerships, Subchapter S corporations, trusts and estates that issue a form K-1 and who have filed extensions have until Sept. 15 to file their returns and issue K-1’s to their members.
Think about the impact of the K-1 you expect to receive on your individual tax return before you rush to file your form 1040 in February. That anticipated refund might need to be returned to IRS with interest and possible penalty when you file the amended return to include the income from a K-1.
Don’t wait for the president or Congress to change the tax laws. It will not be retroactive to the 2016 tax code. Retroactive changes usually occur in January and generally just tweak the codes or clarify an issue.
I know taxes are one of those items many of us want to put off until tomorrow. But start that shoebox today, so when Oct. 1 arrives you can give your return material to your preparer or you can start your return and have it done on time.
Virginia Moryadas is a tax preparation professional in Bluffton.
