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Stress less with these tax tips:

My son, who introduces these blogs a lot, is a big fan of Subway® restaurant. Since it caters to meat-lovers and vegetarians, can be found on almost all our driving routes and is, I think, healthier than some other fast food places he might chose, we end up at Subway a lot. Most of the time, it’s efficient, but there are those dreaded days when the seemingly one customer in front of us is putting in an order for what must be a family (or office? Team?) of 10. For every single sandwich or salad, the designated buyer must be ready to answer what kind of bread? What kind of cheese? What kind of condiments? What kind of seasoning? What kind and size of drink? What kind of side? Inevitably the customer has to text his or her mates to get the answer for something. And some of the answers—extra meat, guacamole—are going to ramp up the order total. As a frequent flier, I’m annoyed by the wait, but not surprised by the total. The other customer is often both.

Filing your taxes is already stressful, particularly this year, when the Tax Cuts and Jobs Act is an unknown before the return is completed. The experience can only get worse if you have to sit with your tax professional much longer than anticipated and, at the end of it all, you have to pay that person much more than you anticipated. Here are some tips for making the process of filing your taxes as efficient and cost effective as possible.

First, collect and bring all your documents. This is as obvious as it is, sometimes, tedious. Remember, the IRS gets the information on all the forms that you typically get from your employers and educational and financial institutions. If you had more than one job during the year, bring ALL your W-2s. Copies of paychecks or pay stubs, even an entire year’s worth, are not adequate substitutes. If you worked as a contractor, you need to bring a 1099-MISC. If you own stocks, bonds, mutual funds, exchange traded funds, index funds, cds or pretty much any kind of derivative thereof, you need to bring your 1099-DIVs, 1099-INTs and 1099-Bs. If you own your home and have a mortgage, need to bring your 1098. If you did not escrow your real estate taxes and pay them through your mortgage lender, you need copies of your tax bills and receipts. If you had higher education expenses, you need your 1098-T if you want to claim and education credit. If you paid qualified student loan interest, you need your 1098-E. If you are involved with partnerships or S corporation or the beneficiary of a trust or estate, you need to bring your K-1s.

Second, bring your own documentation for expenses that are not reported on official documents. If you have dependent-care expenses for your minor children or adult-children with disabilities, you need to be able to provide your tax preparer with the name, address, phone number and tax identification number of the care provider in order to claim them. If you are self-employed or a small business owner, you need to bring a record of all the expenses of running your business, including the number of miles you drove your vehicle and, sometimes, the amount of space you used for your home office. If you have high medical expenses, you want to categorize them and also provide the number of miles driven for treatment and the cost of any hotel stays incurred because of treatments. If you make large charitable donations, you need to bring the details of your gifts including an appraisal of large non-cash items that are not easily valued. If you sold capital assets such as stocks or bonds, you will need to provide the date of acquisition and the cost basis if this information is not retained and provided by the financial institution.

Third, especially if you are a new client to your tax-preparer, please answer all questions patiently. It may seem preposterous to you that you might have foreign accounts or trusts, or that you might not be a citizen, or that you might be a citizen, but your main home might not have been in the United States for more than one-half the year. If you have children and are claiming them, you might wonder why the tax preparer would ask if the child lives with you for more than half the year or provided more than ½ his/her own support. It may feel invasive if you are a single or divorced parent and the tax preparer asks you about your relationship with the non-custodial or absent parent and needs and explanation of why that person is not involved your child’s life. Here’s why the tax preparer is asking. The IRS places a burden of due diligence on paid tax preparers. While you would never try to defraud the IRS, some people at some time have. The due diligence requirement requires the preparer to vouch that they have asked enough questions to be reasonably sure that the client is only claiming credits to which s/he is actual entitled. The requirement pertains, specifically, to returns that claim the Earned Income Credit, the Child Tax Credit, the Additional Child Tax Credit, Self-employment income and various education credits and/or which are filed using the status Head of Household, which requires the filer to have a legitimate tax dependent. The IRS scrutinizes closely returns claiming these credits and will fine the preparer if s/he does not make efforts to obtain an document answers that support the credit claim.

Taking the above three steps will move your tax preparation process along smoothly. But even if the preparation time is a shorter than you fear and a pleasant surprise, the cost of your tax preparation may cause sticker shock. CPA firms can set their own prices, but preparers at “big box” chain preparers may charge based on how many forms your return requires. Be sure to ask your tax preparer to explain the individual line items that went into your invoice. If the cost of a form or step is more than the benefit it generates, ask the preparer whether there is a fix. If you are a new client, ask if there are any discounts. And be careful about purchasing financial products that provide you a refund advance or allow you to use your refund to pay for your return or services that will protect your identity or help you out in case of an audit. In some cases, these products and services may be necessary or useful, but they are all extras that will add to the cost of completing your return.

Reducing the temporal and monetary cost of preparing your tax will definitely reduce your tax season stress. And the savings might be enough to cover Subway®. For you and your whole circle of friends.

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