Small Business Tax Time…It’s All In the Prep
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Documentation
We all know the usual documents we must bring such as W-2’s, 1099’s of various types, 1098’s for students, 1095A, B, or C for health insurance, K-1’s for ownership interest in a small business, etc.
However, the IRS is now requiring additional documentation when using a tax preparer.
The first set of documentation required is presenting original social security cards and a government issued ID.
The purpose behind this type of documentation is to combat the increase in identity theft with respect to tax return preparation.
In fact, you should consider providing these documents regardless to help fight against identity theft and ensure no one can claim your refund (should you be entitled to one).
Another requirement from the IRS is proof of residency regarding dependents. In order to ensure taxpayers receiving benefits associated with dependents are truly entitled to those benefits.
As a result, taxpayers should be prepared to provide proof dependents actually reside with the taxpayer(s). Examples include school records, medical records, and the dependent’s government issued identification.
While these documents will not be transmitted with the tax return, copies will need to be kept with the tax preparers to ensure compliance with the IRS’ requirements.
As taxpayers, you should also retain copies of these documents in case the IRS requests these documents at a later date.
Conclusion
Before sending your return to the IRS, make sure you have everything in order and all the supporting documentation including those documents that do not directly affect the figures on your tax return. Good luck and happy tax season!
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