Tips to Prepare for 2018 Tax Filings

The year is quickly coming to a close, and with holidays right around the corner, year-end will be here before you know it.  There are tasks you can start doing now to ensure you are ready for tax filing time and prevent panic at the start of the year.

Income Tax Planning or Income Tax Projection

Income Tax Planning and Income Tax Projections are a vital service for taxpayers, especially during this first year of tax reform.  There are various ways that you can optimize tax reform for your situation, many of which would need to be addressed before year-end.  Engaging your CPA for these services will prevent any surprises when you are filing your income tax return and allow you time to make changes before the end of the year.

An income tax projection will involve gathering your income and deductions thus far for 2018 and projecting them out for the remainder of the year.  The result is that you will know what your income tax liability or refund will be. Knowing this information ahead of time will allow you to make necessary changes such as adjusting your withholdings or making estimated income tax payments.

Income tax planning takes the projection one step farther and allows us the opportunity to provide you with strategic ideas to minimize your income taxes.

Get Your Books In Order

Get your books in order. Be sure that all income and expenses are input into QuickBooks and all bank and credit card accounts are reconciled each month. Start gathering the various documents we will request from you. Some examples of items that we will need are: copies of invoices for any fixed asset purchases, quarterly payroll reports, December loan statements, December credit card statements and December bank statements (noting that these may not be available yet depending on when you read this).  If you’d like a list of items that we will need specific to your situation, you may reach out to your relationship manager to request.

Gather Personal Deductions

There were big changes to the standard deduction for 2018 – which could eliminate itemizing for many taxpayers. If your taxes (capped at $10,000), mortgage interest and donations don’t exceed $24,000 married filing jointly ($12,000 single and married filing separate), then you will not itemize.  That being said, if you itemize, we will need your mortgage interest statement, copies of vehicle tax bills and real estate tax bills, and copies of donation receipts.  If you have non-cash donations, we will need you to write the value of the donated goods on the receipt.

This is also a good time to gather estimated income tax payments that have been made. List who you paid (IRS, NC, etc.), the amount, and date paid.  If you have a child under age 13, and you (and your spouse if applicable) have earned income, and you pay for any after school care or childcare, we can deduct those as a credit.  We will need to know whom the payments were made to, their address, EIN and payments made per child.

1099s and Business Property Tax Listing

1099s and business property tax listings are due January 31, unless an extension is available.  We will be happy to discuss in more depth with you who is required to receive a 1099.  If you anticipate that someone will need a 1099, have them fill out a W-9, if you don’t already have one.  For the business property tax listing, if you have your books reconciled, we will be able to use that information to prepare the listing.  Otherwise, we will need record of any assets purchased or disposed of.


These are just a few helpful hints to get you ready for 2018 income tax filing. Good luck!