The goal of a Certified Public Accountant is to prepare your tax return accurately and with the biggest refund allowable or in some cases, owing less to the IRS. To do so, the CPA has to obtain all the pertinent information from the taxpayer. There are two primary ways to obtain this information. The first option is to sit down, face to face with the client, and ask 40-80 questions, provide them with a list of documents they will need and send the taxpayer home to accumulate the documents.
The most efficient option is for the Certified Public Accountant to provide the taxpayer with a questionnaire and a list of documents they will need before the client arrives in the office. The questionnaire lets the CPA know the areas that they need to research or ask additional questions which in turn could lead to a more robust tax refund for the client.
A typical question would be, “Did you purchase a new car during the tax year?” If the answer is yes, the CPA knows to inquire about sales tax paid (which is a deduction), and can ask further questions about the use of the vehicle (personal or business) which might result in further deductions. A CPA can review the list quickly which lowers the client invoice since most CPAs charge by the hour.
Most CPAs create their own list of documents needed to complete tax preparation for a client, and usually consists of one or two pages. Generally, the minimum a Certified Public Accountant needs is:
– Form(s) W-2 (wages, etc.)
– Form(s) 1099 (interest, dividends, etc.)
– Schedule(s) K-1 (income/loss from partnerships, S corporations, etc.)
– Form(s) 1098 (mortgage interest) and property tax statements
– Brokerage statements from stock, bond or other investment transactions
– Closing statements pertaining to real estate transactions
– All other supporting documents (schedules, checkbooks, etc.)
– Any tax notices received from the IRS or other taxing authorities
– Prior Year’s Tax Return if prepared by different firm.
– Value of donated items.
By bringing these items to your CPA, you will save time, money and frustration – all while potentially uncovering hidden deduction gems and saving you money on your tax return.