Tax Checklist

Okay friends, its a new year with a fresh start. I hope you've recovered from the champagne hangovers and are ready to begin 2011 with a bang. You've got about one month to get your tax info organized, so here's a checklist of information you'll need:

PERSONAL
Social Security numbers (including spouse and children)	These are required to qualify for exemptions.
Your child-care provider's tax ID or Social Security number	This is critical to qualify for child care credits.
Form 8332, copies of your divorce decree, or other documents proving your right to claim a child living with your ex-spouse.	Divorce documents are on file in the court where you filed. Your lawyer should have them as well. Form 8332 is available on the IRS Web site.
EMPLOYMENT & INCOME
W-2 forms for this year	These come from your employer and must be distributed by January 31st.
Partnership and trust income	Data for these should come from an accountant or financial institution.
Pensions and annuities	Data should come from the financial institution, insurance company selling the annuity or pension fund.
Social Security Railroad Retirement Benefits	You will need Form RRB 1099 or Form RRB 1042S for nonresident alien recipients of Railroad Retirement benefits.
Alimony received	Tax information should come from your ex-spouse or his representative. Your former spouse will want your Social Security number to be able to deduct any alimony payments.
Jury duty pay	Data should come from the court clerk.
Gambling and lottery winnings	This data should come from the casino or lottery authority. Use Form W-2G.
Prizes and awards	Data should come from the award givers. Use Form 1099-MISC.
Scholarships and fellowships	Data should come from the administrators of these programs. Use Form 1099-MISC.
State and local income-tax refunds	Data should come from the taxing authorities.
HOMEOWNER/RENTER DATA
Residential address(es) for this year	This is your responsibility.
Mortgage interest	Your lender will send you this data on Form 1098.
Sale of your home or other real estate	Your lender or closing agent should send you Form1099-S.
Second-mortgage interest paid	Your lender will send you this data on Form 1098.
Real-estate taxes paid	Your county clerk or lender should send you this data, often on the same 1098 as your mortgage interest.
Rent paid during tax year	You need to keep track of this yourself- your landlord hasn't fixed your shower, I wouldn't count on their help for this.
Moving expenses	If your expenses are reimbursed by an employer, the employer will furnish you with data on the moving costs they paid for.
First-time homebuyer credit	Did you buy your first home in 2010? You will need to file Form 5405 to claim the credit. You will need data from your sale closing documents.
FINANCIAL ASSETS
Interest-income statements	Financial institutions will provide this data on Form 1099-INT & Form 1099-OID.
Dividend-income statements	This will come on Form 1099-DIV from the company paying the dividends.
Proceeds from broker transactions	Your brokers should furnish this data on Form 1099-B.
Tax refunds and unemployment compensation	The issuing agencies will send you this info in Form 1099G.
Miscellaneous income including contract or freelance work or rent	This should come from whoever distributes the income on Form 1099-MISC.
Retirement-plan distribution	Your retirement agency will send this data on Form 1099-R.
FINANCIAL LIABILITIES
Auto loans and leases, including account numbers and car value, if the vehicle is used for business	You can get this data from the lender or leasing company.
Student loan interest paid	The lender should furnish this data on Form 1098-E. You can also check on your lender's website- mine has it listed there so yours may too!
Early withdrawal penalties on CDs and other time deposits	Financial institutions should provide this data.
AUTOMOBILES
Personal-property tax information	You know how you have to renew that darn vehicle registration? Well there's a certain fee from that document that you can deduct- its called a VLF (Vehicle Licensing fee). You'll report this on your Scedule A.
Cash for Clunkers reporting	All forms should have been filed by the dealer that sold the vehicle. The credit doesn't need to be reported on your federal return. Your state may have some requirements, however.
DEDUCTIBLE EXPENSES
Gifts to charity	This data should come from the charity. Since 2007, you have new responsibilities. You will need a bank record (such as a canceled check, a bank copy of a canceled check, or a bank statement containing the name of the charity, the date, and the amount) or a written communication from the charity. The written communication must include the name of the charity, date of the contribution and the amount of the contribution. This only applies to gifts of $200 or more.
Unreimbursed expenses for volunteer work	You will need to keep your own records for this. Remember, you can deduct any driving expenses for volunteer or charitable work at the rate of 14 cents a mile.
Unreimbursed expenses related to your job	You will need to maintain this data.
Travel expenses, entertainment, uniforms, union dues, subscriptions and investment expenses	Your broker will furnish some data. Travel, phone and other related expenses are your responsibility to track.
Job-hunting expenses	You will need to keep and maintain this data.
Education expenses	You will need to keep this data. But if you qualify for Hope or Lifetime Learning credits or other college deductions, the college involved will send you the data on the qualifying expenses you've paid. If you plan to claim education deductions, you will need Form 1098-T from the institution. If you expect to deduct interest on student loans, get Form 1098-E from the lender.
Child-care expenses	You will need to keep up with your babysitter, daycare or other such expenses.
Medical savings accounts	The institution handling the account will be able to generate any data.
Adoption expenses	You will need to track this data and be able to document these expenses.
Alimony paid	You or the authority disbursing funds will need to keep this data. To deduct this expense, you will need the recipient's Social Security number.
Sales-tax expenses	If you expect to claim a sales tax deduction rather than income tax on your 2009 tax return, you will need receipts for expenses. Or you can fill out a worksheet that the IRS provides to help estimate sales tax expenses.
Tax-return-preparation expenses and fees	Your preparer can furnish this data to you.
SELF-EMPLOYMENT DATA
K-1s on all partnerships	The partnership management should generate this data.
Receipts or documentation for business-related expenses	This is data you should keep and track.
Farm income	You or an accountant should tack this information. You will need to prepare Schedule F.
DEDUCTION DOCUMENTS
Federal, state and local estimated taxes paid for current year, including estimated tax vouchers, cancelled checks & other payment records	You must keep copies of this data and track it.
IRA, Keogh & other retirement plan contributions	You can get this information from your financial institutions.
Medical expenses	You must track this data. Prescriptions, doctors visits, mileage, eye glasses, dental- all of this can be claimed IF you're itemizing.
Casualty or Theft Losses	You'll need to file a Form 4684 and enter the loss on your Schedule A.

　
　

Saving

Ever hear of the story of the grasshopper and the ant?
The grasshopper was a fun loving, worry about it later type who sang and danced the summer months away at the disco- tech, which had a ridiculous cover to get in each night. The ant, loved to sing and dance as well, so he did so in his shower, each morning before work. The ant worked hard to save up enough food for the winter because he knew he would need it later. When winter time came, the grasshopper looked in his home and found all kinds of fashionable items, but no food! The ant, however, had enough food to buy a karaoke system and host a big party, with enough food to comfortably last the winter.

This story is all about idleness. If you want to have a comfortable future, you need to start storing away some food for the winter (retirement). Even if you don't want to look THAT far ahead, you should be saving a little each month for emergencies. If you don't have health insurance, or you don't have a credit card- what will you do if you're in some major accident? Rely on family to help you out? What about when you want to buy a home- will you have a stash saved up? Now is the time to start saving! Right now. The sooner the better for you- its called the Rule of 72.

http://en.wikipedia.org/wiki/Rule_of_72#Choice_of_rule

The rule of 72 helps you predict how much you will approximately save based on your bank's saving interest rate.

Example: Say you put $500 in your savings account, which has a 9% interest rate. If you divide 72, by 9, that = 8. That means, 8 years before your investment doubles and becomes $1000. Sixteen years before it doubles again and becomes $2000. This is assuming that you're not adding to this investment through the years. You see though, with this rule, that time is on your side. The longer you have to let that investment double, the bigger pot you'll have at the end of the rainbow.

Saving is the most basic, and almost hardest thing to get people to do. The present seems much more important sometimes. However, if you keep dipping into your savings, it will not be able to build! Therefore you should get real and know thyself. Set aside an amount that you can handle, not an amount that will take away from your present needs. 5% is a great amount to start. Say you get $300 a week. That's only $15 that you'd probably waste on an impulse buy that instead, you will pay to yourself. If you're able to save 10% of your income, even better!

If you want to wait until after the holidays to start this crazy new idea of saving- make it a New Years resolution- but, uhhhhhh remember when you promised yourself last year that you'd stick to a rigid workout schedule? Yeah, just make sure to keep this resolution. ;-)

Well hello there!

I'm not gonna lie, I'm nowhere near an expert at finance. In fact, I never saw myself being interested in this sort of thing- I'm an actor! But being a young twenty something in a big city like Los Angeles makes you realize, hmmmmm....you have to do things for yourself. Part of doing things for yourself is managing that little green monster called MONEY. Most people in my field don't even start thinking about things like IRA's, investing or saving until they're in their thirties. Even then, they may not know how best to utilize their income.

I've had the excellent opportunity to work under an ex-IRS financial planner as his receptionist. I've completed an H n R Block Tax Course for personal returns and I've started reading Personal Finance For Dummies and Investing For Dummies, both by Eric Tyson, M.B.A. (Which means he has a Master's Degree in Business Administration). I'll probably be referring to Tyson a lot in this blog, as his concepts are very easy to understand and make perfect sense.

So I thought, as I learn- why not share these basic concepts with my peers, family and friends. After all, money DOES NOT BUY HAPPINESS, but it is something that when organized, can bring you a more secure life. You'll eventually be able to buy that vacation home in Vermont, to take that cruise to Jamaica, to retire in your own private paradise- or simply to better pursue your dreams in life!

Now that I've talked a little about me: if you readers have any questions, I'll do my best to answer them! I may not post daily, but I'll be on this blog often, so ask away!