Small Business Taxes & Management


2015 Individual Tax Return Checklist


Small Business Taxes & ManagementTM--Copyright 2015, A/N Group, Inc.


We've developed a checklist (for 2014 returns) you can use if you're preparing your own return, reviewing your return, getting ready to see your tax preparer or if you're a tax professional. It's not a primer, but a list of items to check when preparing a return along with links to IRS forms and publications. We've tried to keep it short, so there's generally no explanation. For example, one of the items in "Issues to Check and Special Situations" is Member of Armed Forces. There are several special benefits and rules related to servicemen and women. We suggest you check the instructions for the form (1040 in this case), IRS Publication 17, and any special IRS Publication. We've included a condensed list of Forms and Instructions and IRS Publications on our web site. We strongly suggest you use commercial software (there are a number of choices, all inexpensive) to do the return, if you're going it alone. And don't override entries. Entering your child's birthday correctly may mean the difference between the software taking a child credit, or not. Same for the child and dependent care credit. Similarly, checking or not checking a box can have important consequences. And a response in one spot may carry through to a number of other forms.

Finally, if you have a business or rental property you may have to make a number of elections and file Form 3115, Application for Change in Accounting Method, if you have tangible personal or real property, claim depreciation, or have maintenance and repair costs. This is an extremely complex area. We've included a short checklist on what elections might apply.


Basic Documents You Need

___ 2013 tax return (for reference)
___ W-2s
___ 1099-MISC
___ 1099-R
___ 1099s for interest and dividends
___ 1095-A Health Insurance Marketplace Statement (if applicable)
___ Brokerage statements
___ K-1s from S corporations or partnerships
___ 1098 reporting mortgage interest
___ SSA-1099 Social Security or Railroad benefits including Medicare B and D premiums
___ 1099G, W-2G
___ Real estate tax bills
___ Personal property tax bills
___ Purchase and sale agreements for real property
___ Refinancing statements
___ List of other 1098, 1099 and related forms

Issues to Check and Special Situations

___ Check social security numbers, address
___ Dependent changes--births, deaths, etc. rules on dependents
___ Birth dates of taxpayers and dependents
___ Telephone numbers
___ Dependent information including social security no., months lived with taxpayer, child care expense
___ Change in marital status
___ Taxpayer or spouse disabled in 2012
___ Death of taxpayer or spouse
___ Child under age 19 or full-time student under 24 with investment income greater than $1,900
___ Noncustodial parent (Form 8332)
___ Dependents not U.S. citizens or residents
___ Adoption expenses (Form 8839)
___ Changes to Federal or state prior year tax returns
___ Member of Armed Forces
___ Changes to prior year returns that require filing amended return
___ Foreign financial accounts (includes signature authority)
___ Reporting of specified foreign assets (Form 8938)
___ Grantor or transferor of foreign trust
___ Gifts over $14,000 or gift to trust (gift tax return may be due)
___ Gifts to/from foreign individuals
___ Reporting of income and deductions in respect of decedent
___ Pay made to an individual for domestic services (Schedule H)
___ Employer stock bonus plan
___ Start a business or buy an interest in partnership or S corporation?
___ Live in a federally declared disaster area?
___ Purchase a rental property or rent owned property for first time?
___ Vacation home purchase?
___ Engage in a like-kind exchange of property (Form 8824)
___ Sell property (real or personal) using installment sale (Form 6252)
___ Provide over half support for another person?
___ Rollover of IRA distributions
___ Distributions from IRAs, other qualified plans before age 59-1/2
___ Tip income not reported to employer
___ Casualty or theft losses
___ Non-business bad debts
___ Proceeds from Series EE or I Savings Bonds purchased after 1989 used for higher education expenses (Form 8815)
___ Moving expenses
___ Paid alimony
___ Received alimony
___ Purchase fuels for non-highway use
___ Foreign earned income exclusion (Form 2555)
___ NOL (net operating loss) carryforward
___ Farmer or fisherman income averaging
___ Loans to/from related party (including business entity)
___ Filing required in other than home state (rental property, partnership in another state)
___ Repayment of First-Time Homebuyer Credit (Form 5405)

New for 2014 Returns

Affordable Care Act
___ Full year insurance; check box line 61, Form 1040
___ Form 8965 (Instructions), Health Coverage Exemptions
___ Form 8962 (Instructions), Premium Tax Credit (PTC); Health Insurance Marketplace; reconciliation

Tangible Personal Property/Repair Regulations
___ Applicable to business, rental property owners
___ Requirement to file Form 3115 (Instructions), Application for Change in Accounting Method
___ Election for de minimis safe harbor; Sec. 1.263(a)-1(f)
___ Election, building expense safe harbor small taxpayers; Sec. 1.263(a)-3(h)
___ Election, capitalization of amounts paid or incurred for employee compensation/overhead as transaction costs
___ Election, capitalize repair and maintenance costs
___ Election, capitalize rotable, temporary, or standby emergency spare parts
___ Election, partial asset disposition
___ Adoption of accounting policy statement


W-2 Information
___ Wages
___ Federal tax withheld
___ Social security and medicare wages and withholdings
___ Social security tips, allocated tips
___ Advance EIC payment
___ Nonqualified plans
___ Covered by pension plan?
___ State income different than federal
___ Box 12 codes
___ State and local withholdings
___ Disability withholdings
___ Employer provided dependent care
___ Moving expenses
___ State disability payments
___ Forfeiture of flexible spending account

1099-R (Pub. 575)
___ Gross distribution
___ Taxable amount
___ Amount rolled over to traditional IRA
___ Amount rolled over to Roth IRA
___ Federal tax withheld
___ State tax withheld
___ State income exclusions
___ Capital gain included
___ Nontaxable contributions (Form 8606)
___ Net unrealized appreciation in employer securities
___ Distribution code box 7
___ Penalty for early distribution; exceptions (Form 5329)
___ Tax on lump-sum distributions (Form 4972)
___ Excess contributions

___ Interest income
___ Early withdrawal penalty
___ Savings bond or Treasury interest (generally nontaxable for state)
___ Investment expenses
___ Federal/state income tax withholding
___ Foreign tax paid, country
___ Tax-exempt interest
___ Private activity bond interest
___ Tax-exempt interest attributable to state of residence
___ Nominee interest
___ Compare interest to prior year

Other Interest Data
___ Seller financed mortgage interest
___ Nominee interest
___ Amortizable bond premium
___ Original issue discount (OID)
___ Accrued interest adjustment
___ Check boxes Part III, Schedule B, if more than $1,500 interest or dividends, foreign account

1099-DIV (Pub. 550)
___ Total ordinary dividends
___ Qualified dividends, holding period
___ Total capital gain distributions
___ Unrecaptured Sec. 1250 gain
___ Section 1202 gain
___ Nondividend distributions
___ Federal/state income tax withheld
___ Foreign tax paid, income, country source, type of income
___ Investment expenses
___ Cash/noncash liquidation distributions

Other Dividend Data
___ Percentage/amount from U.S. Treasury obligations (exempt for state purposes)
___ Collectibles (28%) gain
___ Dividends exempt from federal tax (state and local obligations)
___ Exempt dividends subject to alternative minimum tax
___ Dividends subject to alternative minimum tax (AMT)
___ Portion of dividend exempt from tax in state of residence
___ Nominee dividend
___ Restricted stock dividend
___ Compare dividends to prior year

1099-B Proceeds from Broker and Barter Transactions (Schedule D;Form 8949 )
___ Date of sale or exchange
___ Stocks, bonds, etc. gross proceeds
___ Reported as gross proceeds or gross proceeds less commissions
___ Federal income tax withheld
___ Number of shares
___ Classes of stock
___ Description (security name)
___ Basis reported by broker
___ Basis for mutual fund shares
___ Profit or loss realized (closed futures or foreign currency contracts)
___ Aggregate profit or loss
___ Wash sale
___ Personal use property
___ Expired option purchased
___ Expired option granted
___ Worthless security
___ Nontaxable dividends; reinvested dividends; basis adjustments
___ Original issue discount; computations
___ Qualified small business stock (Sec. 1244)
___ Collectibles 28% gain
___ Sale of home where gain taxable
___ Gain from Forms K-1 (partnerships, S corporation, estates, trusts), 2439, 4684, 4797, 6252, 6781, 8824
___ Sales of business property; Sec. 1231 5-year recapture; depreciation recapture; Form 4797
___ Different basis for regular and AMT tax
___ Capital loss carryforward from prior year
___ Election to roll over gain on qualified small business stock
___ Forced or involuntary conversion of livestock
___ Like-kind and related party exchanges
___ Sale of bonds with market discount
___ Incentive stock options
___ Employee stock purchase plan

Other Income
Other Income Items Checklist
___ Social Security and Railroad Retirement benefits (Pub. 915)
___ State and local tax refund
___ Unemployment compensation
___ Conversion of regular IRA to Roth
___ Recovery of bad debts previously deducted
___ Bartering income not reported elsewhere
___ Canceled debt income
___ Distributions from HSA, Archer MSA, Medicare Choice MSA
___ Alimony
___ Jury duty
___ Unreported tips
___ Disability income
___ Rental income from personal property
___ Scholarship and fellowship income
___ Rebates of property taxes
___ Medical insurance recovery
___ Gambling income, lottery winnings
___ Election monitor
___ Executor fees
___ Alternative Trade Adjustment Assistance
___ Agriculture payments
___ Sec. 409A income (deferred compensation)
___ Recapture prior year tuition and fees deduction
___ Hobby income
___ Disaster relief payments

Deductions Toward Adjusted Gross Income

___ Self-employed health insurance (including children under age 27)
___ Contributions to deductible IRA
___ Contributions to nondeductible IRA (Form 8606)
___ Contributions to SIMPLE
___ Contributions to SEP
___ Contributions to Keogh
___ Health Savings Account
___ Interest on student loan
___ Medical Savings Account
___ Educator expenses
___ Business expenses of reservists, performing artists
___ Penalty on early withdrawal of savings
___ Tuition and fees deduction (Form 8917)
___ Domestic production activities deduction (Form 8903)

Itemized Deductions

Medical (Pub. 502)
___ Medicare B insurance premiums
___ Medicare D insurance premiums
___ Health insurance premiums
___ Prescription medications
___ Prescription medical equipment and supplies
___ Qualified long-term care premiums
___ Self-employed health insurance premiums (not deductible on 1040)
___ Doctors out-of-pocket (co-pays, etc.)
___ Dentists out-of-pocket
___ Physical therapists
___ Eyeglasses and contact lenses and supplies
___ Hospital, clinic out-of-pocket
___ Ambulance fees and medical transportation
___ Miles driven for medical purposes
___ Lodging (see rules)
___ Modifications to residence for disabled person
___ 7.5%/10% threshold; birthdate January 2, 1950

___ State (and local) income taxes withheld
___ State (and local) estimated taxes paid (include 2012 refund applied)
___ Real estate taxes paid on principal residence
___ Real estate taxes paid on additional homes or land
___ Personal and excise property taxes (based on value)
___ Auto registration fees based on value of vehicle
___ Sales tax paid (if not deducting income taxes; table amount plus large purchases; actual amount)
___ Sales tax on vehicle, boat
___ Foreign taxes paid (if not taken as credit)

Interest (Pub. 936)
___ Home mortgage interest for purchase of principal residence
___ Home mortgage interest for purchase of second residence; definition of residence; boat
___ Home loan for home improvements
___ Home equity loan (principal limit $100,000)
___ Points to purchase a home
___ Amortizable points on refinance of home loan or home equity loan
___ Seller financed mortgage (special information requirement)
___ Investment (margin) interest (Form 4952); carryforward; special election
___ Qualified mortgage insurance premiums
___ Allocation of interest, residence, business, investment, personal nondeductible

Gifts to Charity (Pub. 526)
___ Cash gifts (acknowledgment over $250; proof all amounts)
___ Noncash gifts
___ Noncash over $500 total (Form 8283)
___ Qualified charity check IRS List of Exempt Organizations
___ Carryover from prior year
___ Mileage driven for charity
___ Parking fees, tolls, local transportation, uniforms, other out-of-pocket
___ Reduction for amount received from charity; dinners; tickets
___ Auto contributed (Pub. 4303)
___ Contributions of property $5000; groups of similar property

Casualty Losses (Pub. 584)
___ Definition of casualty loss
___ Form Form 4684)

Miscellaneous Deductions (Pub. 529)

2-Percent Floor
___ Unreimbursed employee expenses (e.g. job travel, meals, etc. Form 2106)
___ Union dues
___ Job related education
___ Professional dues and licenses
___ Business liability insurance
___ Educator expenses over the $250 limit
___ Research expenses of college professor
___ Tools used in your work
___ Work clothes and uniforms
___ Investment expenses
___ Appraisal fees to figure casualty loss
___ Tax preparation
___ Credit/debit card convenience fees for paying income taxes
___ Excess deductions of an estate
___ Legal expenses (restricted)
___ Safe deposit box rent
___ Service charge on dividend reinvestment plan
___ Trustee's administrative fees for IRA (paid separately)

No 2-Percent Floor
___ Amortizable premium on taxable bonds
___ Casualty/theft losses on income producing property
___ Federal estate tax on income in respect of decedent
___ Gambling losses up to amount of winnings
___ Disability related work expenses
___ Losses from Ponzi-type investment schemes
___ Repayments of more than $3,000 under a claim of right
___ Unrecovered investment in an annuity

Schedule C

Schedule C
___ Ownership-taxpayer or spouse
___ Employer ID
___ Business code
___ Business address
___ Disposed of in current year
___ Accounting method
___ Required 1099s filed
___ Material participation, at risk
___ Qualified disaster area
___ Sales (before/after sales tax)
___ Gross receipts/1099-MISC/1099-K/statutory employee
___ Inventory withdrawn for personal use
___ Purchases, labor costs, materials and supplies, other costs
___ Advertising
___ Car and truck expenses/Form 4562/recordkeeping questions
___ Commissions and fees
___ Contract labor
___ Depreciation, Sec. 179 deduction, bonus, special election(Pub. 946) (Form 4562)
___ Employee benefit programs
___ Insurance (not health)
___ Pension and profit-sharing plans (not for owner)
___ Mortgage interest
___ Interest
___ Legal and professional
___ Office expenses (include bank charges, postage, cleaning, etc.)
___ Rent or lease-machinery and equipment
___ Rent or lease-other property
___ Repairs and maintenance (not improvements)
___ Supplies not in cost goods sold
___ Taxes and licenses (employer's share of FICA, state and federal unemployment tax, personal property, etc.)
___ Travel
___ Meals and entertainment (subject to 50% rule and not subject separate lines)
___ Utilities (include cell phone, telephone, internet)
___ Wages (gross)
___ Long-term contract reporting rules
___ True lease or purchase
___ Equipment purchases/Sec.179/Form 4562 depreciation
___ Software 36-month amortization
___ Qualified leasehold improvement, restaurant, retail property; 15-year depreciation
___ Autos-lease inclusion amount
___ Federal-state depreciation differences
___ Depreciation/Sec. 179 auto limitations
___ Home office expenses (see below)
___ Carryover home office expenses
___ Listed property personal use questions
___ Mileage, personal use questions
___ Disabled access credit
___ Casualty losses; Form 4684
___ Work opportunity credit; qualified veteran (Form 5884)
___ Domestic production activities deduction Form 8903
___ Small employer health care credit (Form 8941)
___ Hobby loss rules
___ At-risk rules ( Form 6198); passive activity rules

Schedule SE

Schedule SE
___ Self-employment income tax--Sole proprietors, LLC members, partners
___ Long-form if FICA also withheld from paycheck

Schedule E

Schedule E

Rental Activity (Pub. 527)
___ Royalty income
___ Main, second, full rental
___ Type of property; rental to related business
___ Days rented/available for rent/personal use
___ Real estate professional; material participation
___ Active participation
___ Qualified joint venture (QJV)
___ Amount at risk
___ Passive loss carryforwards
___ Gross rent-expenses paid by tenant
___ Advertising
___ Commissions
___ Auto/Form 4562/recordkeeping
___ Travel including auto (standard mileage or actual)
___ Cleaning
___ Legal and professional
___ Insurance
___ Management fees
___ Association fees
___ Mortgage interest (including points)
___ Non-mortgage interest
___ Grounds maintenance
___ Property taxes
___ Other taxes including personal property, employee FICA
___ Utilities
___ Supplies
___ Repairs and maintenance
___ Net lease
___ Depreciation (27.5 yr. residential rental/39-yr nonresidential/5-yr carpets, appliances, furniture/7-yr office furniture) (Form 4562)
___ Passive activity loss limitation/Form 8582
___ At risk limitation
___ Real estate professionals

S Corporations, Partnerships, Trusts
___ Amount at risk (Form 6198)
___ Passive/Nonpassive/limitation on losses (Form 8582)
___ Material participation rules
___ Passive loss carryforwards
___ Basis, at-risk loss limitation/carryforward
___ Repayment of debt to shareholder rules
___ Activity grouping
___ Separately stated items/income/credits
___ Interest expense to carry investment
___ Section 179 deduction
___ LLC-partnership (multiple member) or Schedule C (single member)
___ Basis
___ Treatment of interest on debt-financed distributions from S corporations, LLCs, etc.
___ Separately stated activities
___ Taxability of distributions-nontaxable, ordinary income, capital gain, dividend
___ Loans to/from business
___ Trust-list

Alternative Minimum Tax

Form 6251
___ Miscellaneous itemized deductions
___ Taxes
___ Medical/dental expenses (addback for those born before 1/2/1949)
___ Tax refunds line 10/line 21 Form 1040
___ Depreciation adjustment (+/-) Schedule C, S corporation, partnership, etc.
___ Other adjustments from S corporations, partnerships, trusts
___ Interest adjustment for mortgages
___ Exercise of incentive stock options
___ Depletion
___ NOL deduction adjustment
___ Private activity bond interest
___ Long-term contracts (business)
___ Passthroughs from S corp./Partnerships
___ Passive activity differences regular vs. AMT
___ Sale of asset AMT vs. regular basis
___ Credit for prior year minimum tax (Form 8801)

Net Investment Income Tax

Form 8960
___ $125,000 (married, separate)/$200,000 (single, head of household)/$250,000 (married, joint) modified adjusted gross income threshold
___ Interest, dividends
___ Annuities from nonqualified plans (distribution code "D")
___ Net income from rental real estate, royalties, partnerships, S corporations, trusts (passive activities)
___ Adjustment for nonpassive income
___ Disposition of entire interest in passive activity
___ Grouping of passive activities
___ Net gain or loss from disposition of property
___ Net gain or loss from disposition of property not subject to net investment income tax
___ Required statements
___ Deferred recognition sales (installment sales and private annuities)
___ Distributions from estates and trusts
___ Sec. 1411 net operating loss (NOL)
___ Self-charged interest
___ Form 8814 election (child's investment income)
___ Investment expenses
___ State/local/foreign income taxes
___ Miscellaneous investment expenses
___ Allocation of expenses to investment income and modifications

Additional Medicare Tax

Form 8959
___ Multiple W-2s
___ Filing threshold $125,000 (married, separate)/$200,000 (single, head of household)/$250,000 (married, joint)

Employee Business Expenses

Form 2106
___ For employees with job-related business expenses
___ Parking fees, tolls, and local transportation
___ Travel expenses away from home (Pub. 463)
___ Meals and entertainment expenses
___ Business gifts ($25)
___ Education
___ Home office expenses
___ Trade publications
___ Depreciation not vehicle
___ Reimbursements other than meals and entertainment
___ Reimbursements meals and entertainment
___ Qualified performing artist/National Guard/Reserve members
___ Vehicle information
___ Evidence to support deduction, written

Home Office

Form 8829
___ Area exclusively for business
___ Simplified method ($5 per square foot; limit $1,500)
___ Multiple business, multiple forms
___ Principal place of business/inventory storage/no other fixed location
___ Separate structure
___ Daycare rules
___ Mortgage interest
___ Real estate taxes
___ Mortgage insurance
___ Insurance
___ Rent
___ Repairs and maintenance
___ Utilities
___ Direct vs. Indirect expenses
___ Carryover operating expenses, casualty losses and depreciation
___ Depreciation of home and improvements
___ Basis in home (first year of use; value of land)
___ Depreciation recapture on sale

Moving Expenses

Form 3903
Pub. 521
___ Distance/time test
___ Armed Forces
___ Amount paid by employer
___ Transportation expenses
___ Storage expenses
___ Expenses for moving from old to new home (travel and lodging but not meals)

Underpayment Penalty

Form 2210
___ Annualization of income
___ 90% exemption, business owner
___ Disaster area status
___ Equal or unequal payments
___ Withholding based on actual dates
___ Special rule for health care individual responsibility tax, 2014

Child and Dependent Care Expenses

Form 2441
Pub. 503
___ Provider information-name, address, ID, amount paid
___ Paid to allow employment
___ Qualifying expenses
___ Age under 13
___ Dependent care benefits received
___ Disabled spouse/relative

Energy Credits

Form 5695
___ Insulation, exterior doors, windows, skylights, special roof
___ Furnace, hot water heater, blower motor, air conditioner
___ Solar electric, wind power, solar water heating, geothermal
___ Lifetime limits; $500; $200
___ IRS Publication 17, Chapter 37

Home Sale

Pub. 523
___ $250,000/$500,000 gain-2 out of 5 requirement
___ Other gain excluded within 2 years; special circumstances
___ New/former spouse rules
___ Sale for employment, health, etc. reasons
___ Business or rental use of residence post May 6, 1997
___ Sale on installment basis
___ Purchase price of home sold-less postponed gain on prior home
___ Additions to basis include improvements, settlement fees and closing costs on purchase
___ Commissions and selling expenses
___ Acquired in like-kind exchange
___ Report on Form 8949
___ Points remaining on mortgage
___ Deceased spouse

List of Forms 1099 and 1098

___ 1095-A Health Insurance Marketplace Statement
___ 1098 Mortgage Interest Statement (interest paid)
___ 1098-C Contributions of Motor Vehicles, Boats, and Airplanes
___ 1098-E Student Loan Interest (paid)
___ 1098-T Tuition Statement (paid)
___ 1099-B Proceeds From Broker and Barter Exchange Transactions
___ 1099-C Cancellation of Debt (income)
___ 1099-CAP Changes in Corporate Control and Capital Structure
___ 1099-DIV Dividends and Distributions (dividends received)
___ 1099-G Certain Goverment Payments (unemployment compensation, state and local refunds, taxable grants
___ 1099-INT Interest Income (interest received)
___ 1099-K Merchant Card Third-Party Network Payments
___ 1099-LTC Long-Term Care and Accelerated Death Benefits
___ 1099-MA Mortgage Assistance Payments
___ 1099-MISC Miscellaneous Income (generally nonemployee compensation, rents, and royalties)
___ 1099-OID Original Issue Discount
___ 1099-PATR Taxable Distributions Received From Cooperatives
___ 1099-Q Payments from Qualified Education Programs (e.g., 529 plans)
___ 1099-R Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts
___ 1099-S Proceeds from Real Estat Transactions
___ 1099-SA Distributions from an HSA, Archer MSA, or Medicare Advantage MSA
___ 3921 Exercise of Incentive Stock Options
___ 3922 Transfer of Stock Acquired Through and Employee Stock Purchase Plan
___ 5498 IRA Contribution Information
___ 5498-ESA Coverdell ESA Contribution Information
___ 5498-SA HSA, Archer MSA, or Medicare Advantage MSA Information (contributions to)


Copyright 2015 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Articles in this publication are not intended to be used, and cannot be used, for the purpose of avoiding accuracy-related penalties that may be imposed on a taxpayer. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536

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--Last Update 02/11/15