5 Tips to Keep Your Taxes on Track
Ben Westbrook and Geoff Kayton, CPA
01.31.22 | TAX Chat
Use a Secure Portal
When sending information to your tax professional team, electronic portals provide a quick and easy way to send information. In addition, this method is far more secure than email. With the level of personal information involved in tax returns, it’s important to make sure you’re using the most secure method to get this information to us.
Your tax professional can also send information back to you (including tax returns, extensions, and any forms to sign) using this portal.
Brokerage Account Information and Access
If you have brokerage accounts, you can often set up access for your accountants through your brokerage firm. This type of access is usually “view only” access, allowing us to see this information without access to make any changes. If this is not available, you might also be able to arrange for PDF copies of your statements and/or tax reporting documents to be emailed to us.
The ability to access this information quickly and in real-time can help us get things moving faster. In addition, it helps us to make accurate projections of your income for the upcoming year. If you have any questions on what kind of information we need, please reach out to your tax advisors.
Send Information as You Receive It
It might seem a bit counterintuitive, but it’s best to send information to your tax professional as you receive it rather than holding on to it and sending it all at once.
Even better, you can upload it to your secure portal – this provides a secure way to send it in addition to the ability to organize what you send in one place. It will be easy to see all documents – items you’ve sent to us and items we sent to you.
Keep Your Tax Professionals in the Loop
As you make financial decisions or go through major life changes, it’s always a good idea to keep your tax professional in the loop. Buying or selling real estate, business transactions, life changes such as marriage or children, moving or relocating – these are all events that can have major tax consequences. By involving your tax professionals throughout these decisions (and not just afterward), we can provide you with the best tax advice as you navigate these major events.
In addition, it’s always important to make sure your tax professionals understand what your goals are. For example, when purchasing property, your goal could be to have a long-term investment, or it could be to “flip” it for a quick profit. There are different tax strategies to maximize these unique situations, but those strategies often depend on what your end goal is. The more your tax professionals know about your financial goals, the better we can craft a strategy tailored to your specific circumstances.
Knowing how long to keep tax-related documents is important. There are many events that can require you to go back into your records, such as an IRS audit, sale of certain investments, or death of a family member. Here are a few tips to help you know how long to keep these records:
- One year: Documents supporting annual tax documents, such as pay stubs or monthly bank and brokerage statements. These can be disposed of once you verify that they agree to the annual reporting on W-2s, 1099s, etc.
- Six Years: Any documents supporting income, deductions, credits, or payments on a return should be kept for six years following the date of filing. This includes things like W-2s, 1099s, K-1s, receipts for deductions, including charitable contributions, and more. The statute of limitations for the IRS to go back is generally 3 years, but it can be 6 years in certain cases, so it’s best to keep things for 6 years.
- Ten Years: Any documents supporting foreign tax credit items.
- Indefinitely: Any documents supporting basis or cost for investments you currently hold, such as real estate, inherited items, or collectibles, should be kept until 3 years after you sell the item. Any documents supporting estate or gift transactions should be kept indefinitely.
Questions: Contact Geoff Kayton at 212.331.7525 | firstname.lastname@example.org
Geoffrey Kayton is a Senior Tax Manager with more than 10 years of professional experience. He advises a diverse array of clients across the real estate sector on a variety of tax matters. Ben Westbrook is Director of Tax Operations and is responsible for end-to-end tax compliance workflow, from engagement acceptance to filing, including personnel, staffing and outsourcing strategy.