By: Jason Schneider, CPA
With the ever increasing complexity in the tax code, it’s imperative to stress the importance of communication with your tax professional. As taxpayers, it seems as if we are bombarded with tax paperwork from February through April and frankly some of it just simply does not make any sense. From W-2s and 1099s to 1095s and 1098s, the tax world is full of documents that can overwhelm and confuse us. This is why communication is paramount in ensuring that you have a productive and positive interaction with your tax professional.
In order for us to prepare an accurate return and put you into the best possible tax position, we need to have accurate and complete information. It’s not unusual to prepare a return only to find out later that the taxpayer did not give us the “whole story” or explain fully the nature of the transaction which could ultimately lead to an incorrect amount of taxes paid. In many instances the tax treatment of a transaction will differ depending on the nature of that transaction. What might be investment expenses for one person could be an itemized deduction for another person depending on the circumstances of the transaction. By communicating effectively, you give us the information we need to effectively use our tools to help your tax situation.
In addition to communicating the nature of certain transactions, take the time to go over the tax documents you receive and compare them to your prior year tax return. For the most part, our tax situations generally remain relatively stable from year to year, so if you find that you are missing some documents that you had last year, you might need to see if you misplaced it or inquire with the issuer to see if they were in fact sent out.
At the end of the day, your tax professional can only prepare the return from information that you provide. As we roll into filing season, make sure that you have gathered all documents and that you are able to explain any transactions which occurred during the year that may be out of the ordinary for your typical tax situation. By being proactive and communicating effectively with your tax professional, you can ensure that you are put into the best possible tax situation and that your returns are prepared correctly and efficiently.
To discuss this topic further, please contact Jason Schneider, CPA at 760-777-9805.