With the implementation of the Tax Cuts and Jobs Act your tax return this year might be different than year’s past, but your need for certain tax documentation will likely not change.
CPA David Young of the New York State Society of CPAs discussed what you’ll need to have ready to complete this year’s tax return Monday during News 8 at Sunrise.
He began by explaining an important change related to the Tax Cuts and Jobs Act. “This year a whole new tax code has been implemented,” said Young. “However, New York State ‘decoupled’ from the federal code. That means your federal tax return and your state tax return may not or aren’t going to be congruent. You could take a standard deduction on the federal, and still itemize on the state. I want people to remember to bring all of their documentation whenever they come to see their CPA. A lot of people are under the understanding that, hey, I don’t need to keep this receipt or that receipt because I can take the standard deduction. That’s true for the federal, possibly not true for the state.”
Young said when organizing to complete your tax return, make sure you have an ID, W-2 and all 1099 forms. He added, “If you’re claiming the Earned Income Credit, which is a biggie, you have to bring in third party documentation, perhaps a report card to prove the child actually lives with you. If you have a child who is in college, make sure you get the 1098-T from the college. You need to make sure you can prove that those children are yours. For child tax credits, you’re going to have to bring in proof that this child is my child, and I can claim them on my taxes.”
Young also recommends having last year’s tax return, Social Security card, proof of health insurance and all expense documents handy. “Let’s stay you’re also getting income that’s not on a 1099, you’re still going to have to claim it. If you have a small business, you’re going to have to bring in all your income and all your expenses, including that 1099 income, so you can make sure you’re getting a correct 1099. That includes mileage and all of that.”
If you’re missing a document, you can go back to the issuer to get another copy. “If you don’t have a W-2, go back to your employer,” Young said. “For 1099’s, look at last year’s tax return. That’s a good indication of what 1099’s you should have this year. If something’s missing, go back to that, say, financial institution, and get a 1099. Most of them will have an online portal where you can get that. If all else fails, you can always go online and get a transcript. The thing with that is, those things on the IRS’ website might not be posted. You’ll likely have to file an extension and wait to go online and get it from the IRS. It’s a lot easier to go back to that institution that issued you that W-2 or 1099.”