For those just beginning their “work life”, tax preparation and planning is a new and usually frustrating experience.  Below are 10 questions designed to help you prepare for a meeting with a tax consultant/professional.

  1. What is my filing status?

Listed below are the different filing statuses and their requirements.

  • Single
    • You are not married and/or are divorced on the last day of the calendar year.
  • Head of Household
    • You are a resident or citizen of the United States, Mexico or Canada, invoking certain articles of the tax treaty with the U.S.
    • You have one or more qualifying dependents, as defined by the IRS, residing with you for more than half of the year.
    • You are unmarried or considered unmarried on the last day of the year, not a widow/widower, and file a separate tax return with a qualifying dependent.
      • Unmarried is defined by the IRS as follows: you and your spouse lived apart for, at the very least, the last six months of the year.
      • Living apart, as defined by the IRS is as follows: you and your spouse did not reside under the same roof/household.
    • You paid more than half the cost of upkeep of the home you and your child reside in, for the year. If the cost of maintaining the household is more than half of your income, HOH status is disallowed.
  • Married filing Joint
    • You were married, no later, then the last day of the calendar year.
      • Marriage as defined by the IRS: same sex or opposite sex unions, whether married through legal ceremony or recognized by common law standards, will be recognized for federal U.S. tax purposes if recognized by the state, territory, possession and/or country where the marriage took place, regardless of domicile.
    • Married Filing Separate
      • You are married, no later than the last day of the year and do not file a joint return with your spouse
        • It is best to seek the knowledge of a tax advisor regarding this filing status
      • Qualifying Widow/Widower
        • You must have a qualifying child
        • Allows you to claim the standard deduction as if married filing joint for the two years following the death of a spouse
  1. What types of documents do I need for tax preparation?

This question is common and is also very different based on the individual’s income types. Always seek clarity from a tax advisor as to what documents you may be required to produce for your tax return. The most common tax documents received are listed below:

  • W2: Reports wages earned by working for an employer
  • 1099 MISC: Reports different types of income, some of which may be subject to self-employment taxes. This income ranges from rents received, royalties from certain investments, contracting income, insurance proceeds, etc.
  • 1099 INT: Reports interest earnings received by you and/or your accounts
  • 1099DIV: Reports dividend earnings received by you or reinvested on your behalf
  • 1099 Consolidated: Reports interest, dividends, security sales and usually basis of the purchased security
  • 1098: Reports interest paid to a financial institution on the mortgage for a property
  • 1098T: Reports tuition payments to a qualified higher education institution
  • 1095 A, B, or C: Reports the type of health insurance coverage you held throughout the year


  1. What is earned income and unearned income?
  • Earned income is payment received for personal services performed, such as wages, salaries, or professional fees.
  • Unearned income comes from sources such as investments, unemployment compensation, insurance payouts, and pensions, etc. You did not perform a service to receive the income.


  1. Should I retain copies of my tax returns and other tax documents? And for how long?

It is important to maintain and store the tax return and source documents in a safe, dry place.  In fact, we recommend backing up this information by scanning it to an electronic storage device. The IRS can audit individual returns for up to three years following the filing deadline or three years after the tax due was paid, whichever is later. It is recommended, however, to maintain these documents for seven years, as they are your burden of proof.

  1. I own a rental property. What records do I need to complete this portion of my tax return?
  • If the rental property was purchased in the year of tax filing, you will need to supply the closing documents received upon completion of the purchase.
  • Rents received for the year. If you took a security deposit that is deemed first and last month’s rent, for all intents and purposes this is rent received and is reportable as such.
  • Track all expenses to include cleaning, routine maintenance, insurance, management fees, leasing fees and commissions, repairs, supplies, utilities (if you pay them), HOA dues, legal fees, landscaping, bank charges, postage, mortgage interest paid, travel to and from the property and all capital expenses (remodel, flooring, refinance, appliances)

Security deposits are not taxable, unless designated “first and last month’s rent.” If you keep part or all of the security deposit upon a tenant’s move out, it must be included in the rental income for the year. Keeping and maintaining clear records, year over year, is vital. If your tenant provides you with services or goods in lieu of rent money or for discounted rents, the value of work and/or foods must be reported as rental income. For example, if your tenant takes care of the property landscaping and receives a discount on the rent, this must be reported as rental income. Keep records of all these transactions to refer to. Depreciation is the cost recovery of the property.  The type of property determines the life expectancy of the property, therefore determines the calculation of the depreciation expense. Part time rentals, better known as vacation rentals, are recorded in a different manner. Any personal use verses renter’s use percentage will determine how the property will be expensed. Once again, it is vital to maintain exceptional, detailed records of all renters and personal use. Rental properties in foreign countries may be reportable on the tax return.  

  1. How should I file?

The IRS mandated electronic filing (e-file) as of January 1, 2009.  There are some instances where paper filing is still necessary. However, wanting to file via paper is not a valid reason to paper file, according to the IRS.

  1. What can I deduct on my tax return? Below is a list of some common deductions:
  • Income or sales tax
  • Personal property taxes
  • Property tax
  • Mortgage interest
  • Medical expenses (subject to a threshold)
  • Charitable contributions
  • Job expenses
  • Tax preparation fees
  • Investment fees
  1. Can I deduct child support or alimony?

Most divorce decrees lump child support and alimony together in one paragraph. If the divorce decreed does not specify what is child support and what is alimony, nothing is deductible, as it must then be deemed child support. However, if they itemized how much is attributable to alimony and you paid the amount stated, this is then an above the line deduction for you and becomes taxable to the receiver. (Please note, that as of January 1, 2018 this is no longer an allowable deduction).

  1. Can I claim my child as a dependent?

To determine if your child can be claimed as your dependent, your child must pass certain “tests”. Please be advised there are additional “tests” if being claimed by more than one parent. Qualifying Child:

  • Relationship – the taxpayer’s child or stepchild (whether by blood or adoption), foster child, sibling or stepsibling, or a descendant of one of these.
  • Residence – has the same principal residence as the taxpayer for more than half the tax year. Exceptions apply, in certain cases, for children of divorced or separated parents, kidnapped children, temporary absences, and for children who were born or died during the year.
  • Age – must be under the age of 19 at the end of the tax year, or under the age of 24 if a full-time student for at least five months of the year or be permanently and totally disabled at any time during the year.
  • Support – did not provide more than one-half of his/her own support for the year.
  • Nationality – be a U.S. citizen or national, or a resident of the U.S., Canada or Mexico. There is an exception for certain adopted children.
  • Marital status – if married, did not file a joint return for that year, unless the return is filed only as a claim for refund and no tax liability would exist for either spouse if they had filed separate returns.


  1. Gambling winnings & losses

How these transactions are reported on the tax return depend on the status of the gambler. Is he/she a professional gambler or is this a fun hobby. For most, gambling is a fun hobby. For hobby winnings and losses, they will be reported on the individual tax return as other income. The losses cannot, by law, exceed the winnings as a deduction. However, it is vital to track all winnings and loss in the event of an audit. Many casinos have “membership” cards. These cards, when presented, will be scanned to track all transactions, winnings and losses. This is the safest manner in which to keep tack of this income. However, you choose to not use this type of card, it is vital to track the casino you were at, the dates and times you were there, the money played, the machine/tables played and all winnings and losses on a calendar.


Need to file an extension? Need to amend a tax return? We can help get you sorted out.  You can find more information on our FAQ page, or contact us to see how we can help!