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The contents of this website do not constitute a professional service.  Always consult with a competent professional for advice on tax, accounting and other financial matters specific to your situation.  If you wish to engage our firm for this purpose, please contact our office.
 

Date last modified: 10/29/07

Tax Planning and Preparation for Individuals

Personal taxes are based on income minus deductions and personal exemptions.  Some taxpayers qualify for tax credits which may further reduce their tax.  All taxpayers must gather documents reporting income received during the tax year such as wages, unemployment, interest, dividends, stock sale proceeds, pension/retirement account distributions, Social Security, gambling winnings, income from "side" or casual jobs, self-employment income, alimony received, distributions from partnerships, corporations and estates, etc. 

If you change your mailing address during the year, it is important to make sure these reporting documents reach your new address. IRS reviews returns to make sure all W-2s and 1099s issued in your Social Security number are reported on your taxes.

April 15 is the annual due date for personal income taxes.  Some people can file an extension to secure more time to file the paperwork, but all tax liabilities are due by April 15.

Taxpayers use one of three standard forms to complete their federal taxes -- 1040-EZ, the "short" form for taxpayers under 65 with no dependents, taxable income under $50,000 and interest income under $1,500; 1040A for taxpayers with or without dependents, with taxable income less than $50,000 and some capital gain income, taking the standard deduction and not self-employed; and form 1040, the "long" form for all other taxpayers.

All taxpayers are allowed a standard deduction based on their filing status.  The standard deduction figures change each year.  Taxpayers over 65 and/or blind are allowed higher standard deductions.

Taxpayers who have more allowed deductions than the standard deduction amount may itemize their deductions on Schedule A.  If you plan to itemize your deductions, good record keeping throughout the year is essential.   If audited, you would need to provide proof of the expense.  Keep your records to justify your itemized deductions for at least four years. 

Tax laws change every year.  New credits, increases or decreases in allowable limits and other modifications may affect your taxes.  Link to our page of tax law updates and other tax news you can use .