Small Business Taxes & Management

Checklist


2014 Individual Tax Return Checklist

 

Small Business Taxes & ManagementTM--Copyright 2014, A/N Group, Inc.

 

We've developed a checklist (for 2013 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.

 

Basic Documents You Need

__ 2012 tax return
__ W-2s
__ 1099-MISC
__ 1099-R
__ 1099s for interest and dividends
__ 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
__ 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 bank accounts (includes signature authority)
__ Reporting of specified foreign financial assets (Form 8938)
__ Grantor or transferor of foreign trust
__ Gifts over $14,000 or gift to trust (gift tax return may be due)
__ Reporting of income and deductions in respect of decedent
__ Pay 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
__ 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
__ Filing required in other than home state (rental property, partnership)
__ Repayment of First-Time Homebuyer Credit (Form 5405)

Income

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
__ IRA/SEP/SIMPLE
__ Penalty for early distribution; exceptions (Form 5329)
__ Tax on lump-sum distributions (Form 4972)
__ Excess contributions


1099-INT
__ Interest income
__ Early withdrawal penalty
__ Savings bond or Treasury interest (generally nontaxable for state)
__ Investment expenses
__ Federal income tax withheld
__ Foreign tax paid, country
__ Tax-exempt interest
__ Private activity bond interest
__ Tax-exempt interest attributable to state of residence
__ Federal/state income tax withholding
__ 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
__ 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
__ Property inherited from decedent who died in 2010
__ Incentive stock options
__ Employee stock purchase plan


Other Income
__ 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


Taxes
__ 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 take as credit)


Interest (Pub. 936)
__ Home mortgage interest for purchase of principal residence
__ Home mortgage interest for purchase of second residence
__ 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)


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
__ 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)
__ 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


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
__ 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

__ 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-H Health Coverage Tax Credit
__ 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 2014 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 02/10/14