If you want to speed that tax refund along, the process to do so begins long before you get in front of your CPA.
That’s because having the right information when you file could make the difference between having your return processed in a timely fashion and grappling with delays.
The IRS issues most refunds in less than 21 days, but erroneous and incomplete returns could hold up the process.
Head off the slowdown and get on your tax preparer’s good side by having your paperwork ready to go.
“Mid-February to early March is a good time to make an appointment and review the information you’re giving your accountant,” said Portia Rose, CPA and senior tax manager at Mazars USA.
Here are five steps you can take to smooth the process.
If you work with a CPA or tax preparer, ask about getting a tax organizer. This is a detailed checklist that addresses the key tax forms and statements — including your W-2 and 1099s from other income sources — necessary to prepare your income tax return.
Going it alone? “Look at last year’s return and see what items of income and expenses you had last year,” said Rose.
“Normally you’d have the same items of income and expense as last year, unless something has changed,” she said.
The Tax Cuts and Jobs Act, which went into effect in 2018, roughly doubled the standard deduction and put limits on itemized deductions — including a $10,000 cap on state and local tax deductions.
Whether you’re itemizing on your 2018 return or you’re pulling together a tax return for your small business, consider drafting an Excel spreadsheet to streamline your receipts and statements.
For instance, you can deduct qualifying medical expenses that exceed 7.5 percent of your 2018 adjusted gross income.
In addition to the cost you pay for medical treatment, you may also be able to deduct the cost of transportation that’s essential to receiving care — just make sure you track those expenses and the corresponding mileage.
Straightforward filers might be all set once they receive their Form W-2s from their employers, but missing certain key forms could drag out the process of preparing your return.
See below for a list of key documents you’ll need and when you can expect them.
Here are other forms you might need to nab certain tax credits and deductions.
Did you give a required minimum distribution from a retirement account to a charitable organization last year? Be sure you have the appropriate Form 1099-R and an acknowledgement letter from the charity.
“Some 1099-Rs don’t properly denote that it was a charitable distribution,” said Chris Benson, CPA and principal at LK Benson & Co. “We need to be sure that the correct amount is claimed and that it isn’t taxable.”
If you, your spouse or a dependent were issued an identity protection PIN — a six-digit number to keep scammers from misusing your Social Security number — you’ll need this year’s PIN to file your return.
“The IRS gives you a new PIN each year,” said Andy Phillips, director of the Tax Institute at H&R Block. “Have it before you need to file.”
This tax season has been a shock for filers who received smaller-than-expected tax refunds or a bill from the IRS for taxes owed.
Thus far, refund checks are about 8.7 percent smaller than they were last year, as of Feb. 8, according to data from the tax authority.
Employees who had a lot of out-of-pocket expenses that weren’t reimbursed by their employer might really feel the pinch this year, as this itemized deduction is now off the table.
“A trucker, a regional salesperson — they get W-2s and have an employer to report to, but they don’t get reimbursed for all of those out-of-pocket expenses and they were once able to deduct a portion of those costs,” said Phillips.
“This might have been the gateway to be able to itemize on your tax return or substantially increase your itemized deductions,” he said.
Whether you owe the IRS or you received a smaller tax refund for 2018, consider it a lesson learned for 2019.
That might mean you’ll need to adjust your tax withholding so that you’re closer to breaking even with the taxman.