January 2012

Tax filing season is here again and important tax documents should be arriving in the mail soon.  Personal tax returns for 2011 are due April 17, 2012 which will be here before you know it.  So a word to the wise is to start now with your efforts to accumulate all supporting documentation for preparation of your return.  Since April 15^th falls on a Sunday and Monday, April 16^th is a holiday in the District of Columbia, the due date for filing 2011 personal returns is extended to Tuesday, April 17, 2012.

Taxpayers are required to keep accurate, permanent books and records as supporting documentation for various types of income, gains or losses, cost basis, expenses and other amounts that affect their income tax liability for the year.  The records must be retained for as long as they may be or could become material for any Federal tax purpose.  Generally, records that support an item of income or a deduction on a tax return should be kept at least for the period of limitation for that return.  The period of limitation for that return and related assessment of tax is generally within three years after the original return is filed including extensions.  A return filed prior to its due date is deemed to have been filed on the due date excluding extensions.

All individual taxpayers should be on the look-out for the following tax related items that should be arriving in the mail soon:

• W-2’s for wages earned from employer
• 1099’s for income earned as non-employee compensation for services
• 1099’s for interest and dividend income
• 1098’s for mortgage interest paid
• K-1’s for taxpayers share of income and deductions from investment in partnerships, trusts or S-corporations
• Acknowledgement of contributions to religious or non-profit organizations

This list is not all-inclusive, but is a good start for getting ready for the preparation and filing process.  Remember, when in doubt about the relevance of a document to your personal tax filing, KEEP IT!  Better to be safe than sorry.

By: Rick L. Evans, Partner