What you need to know before doing your taxes

I know tax time is not an entrepreneurs favorite time of the year but it’s one of the necessary evils of life. Many people were moved to change careers within the past year which means tax time can get a little complicated this time around. Tax laws, careers, and circumstances have shaken things up and we thought it may be helpful to give you a few things to consider as you get ready to file this year.  Below you’ll find:  

• Standard Items Everyone Should Bring To Their Tax Accountant
• What To Bring If You Have A Non traditional Job (like Uber) 
• What To Bring If You Have A Business
• What To Bring If You Have Additional/side Income 

Standard Items Everyone Should Bring

Personal Items 

• Drivers License (for taxpayer & spouse if filing joint) 
• Social Security Card (for taxpayer,& Spouse if filing joint) 
• Proof of health insurance (if not through employer)

Proof of Income

• W2, 1099 (If you haven’t received your W-2, contact your employer!)
• Unemployment wages
• Business income etc.
• Pension distribution,
• Interest income, dividend income, state refunds and
• Lottery winnings
• Cancellation of debt

Dependent Information

• Social Security Card
• School Records
• Immunization records
• Child Care Expenses

Charitable Contributions

• Cash 
• Non cash

Health 

• Mileages incurred driving to Dr’s office
• Prescription Cost
• Dental Expenses
• Medical Insurance premium
• Cost for prescription glasses
• Allergy Shots 

Housing 

• Mortgage Interest
• Property Taxes

School

• Student loan interest

Vehicle

• Ad-Valorem (auto tag taxes)
• Auto driven
  • Make
  • Model
  • Purchase price

Non Traditional Jobs

Non traditional jobs can claim items specific to their field. In addition to the standard items listed above, below are a few expenses associated with common non traditional jobs. As an Uber/Lyft driver, your car is your office. Calculate & provide proof of your vehicle and work related expenses for last year.

• Car Expenses
  • Gas
  • Tires
  • Breaks
  • Oil change
  • Car wash & Cleaning
  • Repairs 

• Phone Bill 

Real Estate Investors (Schedule E, Including Rental Properties) 

• Rental Revenue ( amount tenants paid you for the entire year) 
• Date Property Was Purchased
  • Price
  • Cost of Land 
• Property Taxes 
• Insurance Expense
• Marketing & Advertisement
• Auto & Travel Expense 
• Purchase of Equipment (ex: oven) 
• Property Expenses 
  • Cleaning
  • Maintenance
  • Repairs 
• Legal & Professional Fees 
• Commissions 
• Management Fees
• Utilities 

Businesses & Entrepreneurs 

Income and expenditures are activities that businesses encounter throughout the year. Anything you’ve spent money on to create, run or promote your business is a business expense. Take a few minutes to write down these expenses. Look at your receipts, bank statements, or emails to get your numbers as accurate as possible. You owe it to yourself to claim every dime! Listed below are a few business expenses that are associated with most businesses.

If you have extra expenses not listed, list them & take your list with you when you get your taxes done! Also, If you worked a job in 2020 and you want to show additional income, you can show proof in the form of:

• Receipt
• Deposit slip
• Bank statement

Lastly, here are a few other things to consider whether you’re a business owner or not. You can include any of these things when getting your taxes done.

Hopefully this list helps you as you prepare to do your taxes this year. It can be a lot but if you have a great tax accountant, you will be fine. Make sure to look through our directory to find a black owned tax accountant!