You should be getting knee deep in tax forms by now. Forms W-2, Forms 1099-MISC, DIV, INT. The list goes on and on. The deadline for filing most of these informational forms is February 1, 2016. Most companies are churning them out about right now, including our team here at CLO.
So what should you do when you start receiving your tax forms? Here are three quick steps you should take:
1) OPEN THE FORMS IMMEDIATELY. Many people know what's in the envelope the moment they receive it. Most of the time it's stamped right there on the outside. IMPORTANT TAX DOCUMENTS ENCLOSED. Our first inclination is to cram the envelope in a folder labeled "TAX STUFF" and just let the CPA deal with it. I can't tell you how many unopened envelopes we receive here at CLO. However, you should open all of these immediately and make sure they are correct. Copies of these forms are sent to the IRS and the amounts are matched with your social security number or EIN. If you report a different amount on your tax return, this can be a red flag for an audit. Insuring they are correct early can reduce or eliminate massive headaches in the future!
2) REPORT MISTAKES IMMEDIATELY. If you find a mistake on either your Form W-2 or Form 1099, you should call the company who sent the form and report the mistake. Ask them to submit a corrected form both to you and the IRS.
3) FILE IN SAFE PLACE. Now you can stuff the forms in that folder labeled "TAX STUFF". Keep them all together in one place to take to your CPA. The deadline for filing tax returns is April 18, 2016, however, you should get your documentation to your CPA at least a month in advance. This will insure your CPA has plenty of time to prepare an accurate tax return on your behalf.