How to Prepare Records for a Tax Accountant

Many Americans hire a tax accountant to determine their tax liability every year. If you have a small business, income from interest, Social Security benefits, capital gains or losses, hiring an accountant may save you money. In addition, if you spend a sizable portion of your income on medical expenses, alimony or child support, an accountant may help you.

Instructions

1. Save all your payroll check stubs and W-2 forms. Add the amounts on the stubs and check it against the amount listed from your employer on the W-2 form. If there is a discrepancy, contact your employer.

2. Gather records from other forms of income. You need records of capital gains you realized during the year, interest income, Social Security benefits and any amounts you received in unemployment compensation. If you have additional sources of income, save and add those records, even if the amount did not appear in your banking account.

3. Compile a list of all your expenses that are deductible. If you have a business, anything that you spend to help you make money should be included. In addition, gather receipts from charitable contributions and medical records.

4. Organize a file to keep all your supporting documents. These include canceled checks or copies, receipts for business expenses, tax records and copies of separation or divorce decrees.

5. Prepare a summary sheet of all your tax information to reduce your accountant expense. Call and ask if you must provide photocopies of your supporting documentation or if you can provide just the summary of all your income, expenses and deductions and save your other documents in a safe place.

Tips & Warnings

• If you can't compile all your records in time to file before the April 15 deadline, ask your accountant to file an extension for you. Your tax liability will remain the same but you can take more time to gather your records.

• Do not under report your income. If you are audited and the agent discovers you lied about your income in order to pay less taxes, you could be charged with a crime.