“Be prepared” is good advice for Boy Scouts AND taxpayers!
With the filing season for 2014 federal and Minnesota tax returns opening next week, let us offer some pre-season preparation that can make it easier when taxpayers or their preparers dig into those1040s and state forms.
Here are a few suggestions from the Indiana Department of Revenue that we’ve tweaked for Minnesota!
- Collect your 2014 receipts for tax-related items. Sort them by category of tax (wages, capital gains, etc.) or deduction. Keep each year’s together in one place, such as a big envelope, a folder file, or even a shoebox. If you scan receipts and save them by computer, don’t neglect to back them up in separate storage, such as a portable hard drive or other safe site.
- Draw up a list of documents you’ll need to file your tax return. Some examples are: W-2 forms, 529 account statement, 1099 notices, etc. Also, for the first time, taxpayers who are insured by the new Health Insurance Market will receive Form 1095A. It reports health care costs in connection with a federal tax credit. Check off the documents from your list as they arrive.
- What changed last year? Marriage, having children, divorce, and moving for a job can affect both your filing status and withholding. You also might want to give an update to the human resources or personnel department of your employer, if you had a major life change.
- Here’s one that’s easily forgotten or ignored. Check your online, mail order and other out-of-state purchases to see if they included Minnesota’s state sales tax. If they don’t, you might owe “use tax” for items brought into and used in Minnesota. (This can get a bit complicated, because Minnesota has a threshold amount for reporting taxable, out-of-state purchases by individuals.)
- Do not use a year-end pay stub to file your federal or state tax return. Pay stubs do not contain the same details as the W-2 form. You should receive your W-2 statement from employers by the end of January.
What do you need for your 2014 tax return? You’ll get a good idea with some preparation before you start filling out forms or taking your records to EricJohn Ltd. or another tax preparer.