Your Form W-2 from your employer has arrived. Other forms have begun showing up in your mailbox-1099-Int for savings in a bank account, Form 1098 for Mortgage Interest you paid. Now you are beginning to think about your tax return.
Don’t forget your state tax refund.
Have you had any forgiveness of debt this year? There are many exclusions and elections that may have to be made.
Any sales of property in 2010? Make sure these are properly reported.
If you had a ROTH conversion in 2010, most of us will pay tax on the income in 2011 and 2012. However, you have until October 15, 2011 to reconvert the ROTH IRA back to a traditional IRA. You may want to consider doing an extension for this reason. You “might” want to pay the tax on this income in 2010 depending on your circumstances.
Don’t forget any carryovers from prior years such as capital losses and passive losses.
Deductions (and other items)
Consider non-deductible IRA, ROTH IRA, Education Savings Accounts and or Education IRA’s.
Do you have any unreimbursed business expenses? See IRS Publication 529 for details about this.
Don’t forget personal property taxes that you pay on your car.
Whether it is medical or charitable, if you have kept a record of your mileage, you might have more deductions.
Are you entitled to a home office deduction?
Business owners need to remember to deduct self-employed health insurance and any unused losses from prior years(if there is basis).
Don’t forget non-cash contributions to Goodwill. Keep good records so that you can provide information for your tax return if the total is in excess of $500.
Look at your broker statements carefully-there may be some foreign tax credit to take.
Did you purchase any energy efficient items for your home such as windows or a heat pump? You may be entitled to an energy tax credit.
As long as you have a very good idea of your tax liability, it really is okay to file an extension. Remember than an extension is only an extension of time to file your return, not pay the taxes. The taxes must be paid by the due date of the return which is April 18th…yes, not a typo.
Because of a tax underpayment or the fact that you have other non-taxed income throughout the year, you might be liable to pay estimated tax payments to IRS and Virginia. The first payments are due April 18th for federal and May 1st for Virginia.
Valderas & Fishel, PC
4900 Cox Road, Suite 195
Glen Allen, Va 23060