Jean A. Cordasco CPA – Tax Preparation
What exactly is income tax?
Income tax is a type of tax that governments impose on income generated by businesses and individuals within their jurisdiction. Income taxes are used to fund public services such as national defense, health care programs like Medicaid and Medicare, Social Security benefits, education, and infrastructure, to name a few. Additionally, they are used to pay government obligations and provide goods and services to citizens.
It is important to note that any kind of income is subject to income tax, not just your salary. Income taxes also apply to interest, dividends, rental income, lottery winnings, and unemployment earnings. Every person has a different amount of money they owe in income taxes since everybody’s income is different. For example, in 2017, income taxes made up roughly 48% of federal revenue.
What should I give my tax preparer?
When meeting with your tax preparer, you must bring everything you believe must be reported on your tax return. These documents include but are not limited to Social Security documents, Income statements such as W-2’s and MISC-1099’s. Tax forms that report any type of income like a Schedule K-1 for trusts, partnerships, and S corporations.
Along with your income expenses, you must bring any expenses you incurred like charitable donations, property taxes, gambling losses, tuition, mortgage payments, student loan interest, medical expenses, child care expenses, to name a few.
If you forget to provide your tax preparer with any of these documents at the initial meeting, do not worry. A simple phone call to your accountant or from your accountant can solve the issue quickly. Original papers should be brought to the tax preparer’s office. Photocopies can be accepted; however, not recommended.
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