Barry's Accounting Services, Corp.
1852 Flatbush Avenue - 2nd Floor
Brooklyn, New York 11210
(718) 677-4006
Client Update - quarterly newsletter


Personal Tax Preparation Checklist

Want we want from you

1) A paper-copy of the last tax return you filed.

2) Social security cards and birth certificates for every dependent you are claiming on your tax return. The IRS will not allow you to claim for a child that is receiving public assistance. Two persons will not be allowed to claim the same child in the same tax year [IRC Section 151(d)(2)]. Child support payments are not taxable to the recipient and they are not deductible by the payer [IRC Section 71(c)(1)]. If you paid a Baby Sitter, Day Care Center, or Summer Camp to look after your dependent child/children under age 13 [IRC Section 21 and regulation 1.44A-2(a)]; or if you paid a Nursing Home to care for your dependent child or parent. To be eligible for the credit, you must give the IRS and State the care provider's full name, full address, social security number or business identification number, and the amount you pay the provider. The day care provider must give you a receipt as proof of payment every time you pay; and a letter at the end of the year.

3) Forms W-2. Send us a Paper-Copy of W2 form from every employer you worked for during the year. You may be required to go on-line and print them. If you can't print them, ask the computer technicians at your job to access your W2 form and print it for you. You would receive a tax CREDIT if you were employed by two or more employers and you paid EXCESS social security tax. However, if you were employer by one employer and you paid EXCESS social security tax, that employer would have to reimburse you. The IRS would not give you the credit.

4) Estimated tax paid. Money order receipts and cancelled checks used to pay federal and state estimated taxes. State tax you owed and paid as back taxes; or the amount you owed and paid the state when you filed your last year's state tax return(s) are tax deductible. Please show proof of payment when you prepare your next tax return.

5) Forms 1099-MISC. If you are a self-employed, independent contractor working for a company that you do not own. Job related expenses that you are entitled to deduct will depend on the kind of employment you are involved with.

6) Form 1099-INT (interest on savings account) and 1099-DIV (dividends from stocks and bonds) from your bank, credit union, mutual fund companies, where you own and sold shares/stock. If you sold stocks during the year, you will have to report the short and long term capital gains and losses you incurred. Investment expenses you paid, including the interest you paid on your trading/margin account are tax deductible. Contact your bank and other financial institutions for the necessary information if you do not receive documentation from them by January 31.

Forms 1099-R. If you have retirement income from pensions, annuities, IRAs, or other pension distributions; or if you rolled-over your pension into another retirement plan.

Form SSA-1099. If you receive social security benefits. Part of your Social Security income may be taxable when it is added to other income, such as wages, interest, pension, dividends, etc.

8) Form 1099-G. If you receive state unemployment. Contact your state unemployment office if you did not receive this form by January 31.

9) Form W-2-G lottery, gambling winnings/losses (IRC Section 165(d). You can deduct gambling winnings up to the amount of gambling losses you incurred during the tax year. The IRS may ask you to substantiate your claim. If you are a professional gambler (Whale or High-roller), you can deduct gambling loss in excess of gambling winnings. The IRS would ask you to show proof that you are a professional gambler.

Retirement plan deduction IRA. The Maximum contribution and deduction is $5,500 if you are under age 50; or $6,500 if you are age 50 or older in 2017. You can't contribute after age 70 ½ but you must start making withdrawals or pay a penalty. You will be charged 6 percent excise tax for contributing more than the legal amount to the plan. You will be charged a 10 percent penalty for early/premature withdrawal before reaching age 59½. However, you may borrow up to $10,000 from your IRA to pay medical bills or purchase your first home without paying a penalty.

Simplified Employee Pension (SEP). A self-employed individual can contribute up to 25% of net self-employment earnings, up to a total $54,000 for 2017.


Form(s) 1098 for residential and rental property. Every bank or mortgage company you paid during the year sends Form 1098 and the actual figures /numbers to the IRS. Hence, you must bring the Form(s) 1098 that you received. Estimates cannot be use because it would contradict what the IRS has in your file; and your will be audited. Mortgage interest, property tax, Insurance and points are huge tax breaks for rental property. If you did not receive a form 1098 statement by January 31, call the bank or mortgage company for the information.

New property and refinance property. Bring us the closing documents that your Attorney gave you when you buy a new property or refinance an existing property. Those documents contain important information that can qualify you for tax deductions.

For residential property (Single family home). If you own one or more residence (a home and a vacation home), you can deduct the mortgage interest and Real Estate Tax you paid for each property. Get Form 1098 form your mortgage company. Estimates cannot be use because it would contradict what the IRS has in your file; and your will be audited. The Law/IRS would not allow you to deduct expenses for repairs, heating, electricity, water, etc. because that is not a Rental property or Tenant occupied property. However, you MAY be qualified for the Federal Residential Energy Credit of 30% of the cost of installing Solar Energy Systems in your home; or New York State tax credit (Form-IT-241 "Claim for clean heating fuel credit") for using clean fuel oil in your boiler. For example, 1,800 gals of oil can get you back an extra $270. Bring us the documents you received from the Solar and oil company.

For rental property (Tenant Occupied). You must report the amount of rent you actually received for each property during the year [IRC Sections 61(a)(5), 109 and 856(d)(1)] plus an itemized list of rental expenses you paid during the year for each property (IRC Sections 163, 164, and 212), such as mortgage interest, property tax, school tax, county tax, community fee, water, gas/oil, electricity, insurance, legal and eviction fee, advertising, extermination, cleaning and maintenance, carpet, management fee, and travel to the property. Minor repairs for plumbing, electrical, patch roof, and carpentry are deductible in full in the year paid (Treasury regulation 1.162-4). Equipment and capital improvement such as boilers, refrigerators, stoves, central air conditioning, new bathrooms, complete renovation of apartments and kitchens, including structural improvements made to the property such as a new roof, sidewalk, driveway, garage, fence, and basement are depreciated and deducted annually over a period of 3-15 years [IRC Sections 167, 168, and 1016(a)(1)]. Expenses attributed to your personal use of the property are not deductible [IRC Sections 262 and 280(A) and treasury regulation (regs) 1.280A-3(d)(3)]. Lodging (free apartment), meals, and utilities that you furnished to a Super and his dependents are considered a condition of employment. These amenities are tax-free to the Super. They must not be included in his gross income; and they are not deductible by the property owner [IRC Section 119(a)(2)].


Record(s) of sale and purchase of real estate. You do not have to pay tax on $250,000 or $500,000 of profit you obtain from the sale or destruction of your principal residence by hurricane, tornado, treats of condemnation, or eminent domain if you own the property for five years and live in it for two years. You can claim this exclusion once every two years (IRC Sections 121 and 1033). If your principal residence was destroyed or condemned, you may have to purchase a replacement property within two years to offset recognized gains. If a lender has foreclosed on your property, your gain or loss for tax purposes is the difference between the net proceeds the lender received at the auction and your adjusted basis in the property [IRC Sections 856(e)(1) and 1001]. Your attorney or insurance company should give you copies of these settlement papers. Take the documents along with you at your tax interview.

* Form-1099A Acquisition or Abandonment of Secured Property: Send us this form If you walk away from your property and the bank took it over and foreclosed on it (Short-Sale).

* Form-1099C Cancellation of Debt: Send us this form if you had difficulty paying your mortgage and the mortgage lender foreclosed on you property or Modify your Mortgage.

* Form-1099C Cancellation of Debt: Send us this form if you had filed for Bankruptcy and obtain a discharge of your mortgage debt under the bankruptcy law

* If you sold a rental/commercial property, you may have to pay capital gains tax on the profit or on the amount of the depreciation taken over the years (IRC Sections 1231, 1245, & 1250). However, you can avoid paying tax on capital gain and instead pay tax on ordinary income if you sold your rental property to a relative (IRC 1239). If you are not qualified to use this method, then you may use the installment sales method to spread the capital gains and your overall tax burden over several years if you received a down payment from the buyer and you hold a note or second mortgage for the balance of the sale. Seller finance (IRC Section 453).

* You may also qualify for non-recognition of capital gains tax through a Section 1031 like-kind exchange transaction. This tax strategy allows you to reinvest your entire profit into a new property without paying capital gains tax. The new property MUST be comparable to you old property in terms of use, price, structure, etc. You cannot exchange a commercial property for a residential property. Section 1031 exchange must be completed within 180 days (six months) after the transfer of the exchange property. It is important that you retain the services of a real estate attorney to construct your transactions within Section 1031 exchange rules because you can be audited and indicted for tax evasion.

* You can deduct a maximum loss of $3,000 on your tax return every year if you paid a contractor or developer to build your house and you and other homebuyers lost your money because the contractor filed bankruptcy. This is a non-business bad debt [IRC Section 166(d)(1)(B)]. To qualify for this non-business bad debt, you must show proof of contract, original cancelled check(s) and a letter from the bankruptcy court or from the contractor's attorney.

13) Medical and dental expenses (IRC Section 213). Expenses you paid for yourself, your dependent children and your parents that were not reimbursed to you by your insurance, including co-payments for hospital, clinics, x-rays, eye glasses, contact lenses, prescription drugs, over the counter medications, and insurance premiums you paid. You can deduct 19 cents per mile for traveling to the hospital to see your doctor and up to $50 per night per person for lodging. The amount you paid for cosmetic surgery is NOT tax deductible. However, the amount you paid for Restorative Surgery is tax deductible if the surgery is necessary to ameliorate a deformity arising from, or directly related to, a congenital abnormality, a personal injury resulting from an accident, trauma or disfiguring disease. You may also deduct the cost (buying, training and maintaining) of having a Guide Dog; and the cost of installing and maintaining a Hot Tub & Swimming Pool in your home if your doctor prescribed them and signed off on them as medically necessary. Auditors from the IRS may contact your doctor for details and pay a visit to your home (field audit) (Life insurance premiums you paid as a beneficiary under the policy is not tax deductible [IRC Section 264(a)(1)]. Life insurance proceeds you received as the beneficiary as a result of the death of a family member who owned the policy is not taxable to you [IRC Section 101(a)(1)]. Funeral expenses you paid on behalf of a friend or relative is not deductible. If you want your money back, you can seek reimbursement from the estate of the deceased person.

* Send us Form 1095-A, 1095-B or 1095-C if you have medical coverage. The IRS would charge you a penalty for failure to prove that you have medical insurance.

* Send us Form 1099-SA if you have an employer sponsored Health Savings Account (HSA) that covered you and; or your family members.

14) Structured settlement. Proceeds for personal injury or sickness (compensatory damages) received whether by lawsuit or settlement agreement; and whether as a lump sum or as periodic payments are not taxable [IRC Section 104(a)(2)]. However, compensation you received for exemplary/punitive damages are included in gross income and are taxable under IRC Section 61. Contact you attorney for advice.

15) Charitable contributions (IRC Section 2522). Amount deducted from your paychecks by your employer, pledge cards, and written acknowledgments from the charitable organization. According to the IRS, can deduct the appraised value for furniture and vehicles you donated to a charitable organization. Hence, you must have a letter from the appraiser and charitable organization. The IRS would allow no more than $500 for clothing and other household items that were not appraised. If you perform voluntary work for a charitable organization, you can deduct travel expense of 14 cents per mile plus toll and parking. No deduction for meals and lodging.

Education & Job related expenses (IRC Sections 162, 212, and 274). Traveling from home to work by bus, train or car is called commuting. It is considered a personal expense and the cost is not deductible, even if you use the EASY PASS. However, you can itemize and deduct job related travel expenses that you PAID or INCURRED to operate your vehicle from your place of business to visit customers, patients, and job sites. Hence, those expenses are usually deducted by salespeople, visiting nurses, and self-employed individuals. The IRS usually require/request those individuals to produce a written approval from their employer, including receipts and records for mileage deducted, gas, lease payments, insurance, repairs, parking, and tolls. If you don’t have those receipt and records, the IRS allows you to use the "standard mileage allowance" expense deduction of 53.5 cents per mile as an alternative for the actual cost.

* Form 1099 (Interest you paid on Student Loan) — Up to $1,500 tax deduction

* Form 1098-T or Form 1099-Q (For College Tuition paid) — up to $2,500 tax credit.

* Every taxpayer is entitled to deduct expenses they paid for job related education, including continuing or higher education to maintain their skills, telephone calls to patients or job, professional dues, textbooks, software, stationery, supplies, travel from work to school (one-way only), travel between jobs for taxpayers working two or more jobs, uniforms, safety equipment, instruments, tools, safety garments, a maximum of $25 for business gifts to an individual, and interest paid on your student loan, etc.


Moving expenses (IRC Section 217). You may deduct unreimbursed moving expenses if your new job is more than 50 miles away from your old residence and you were employed full time in the new location for at least 39 weeks (9.75 months) during the 12 month period immediately following your arrival in the new location [IRC Section 217(c)(2)(A)]. The 39 month rule does not apply to you if you were a full time employee with your company and were transferred to a new location as a condition of employment that benefits your employer. Expenses not reimbursed to you by your employer such as the cost for transportation and storage of household goods and personal effects and Plane tickets for you and your family, and lodging expense in the new location are "above-the-line" items and they are tax deductible whether or not you itemize your deductions [IRC Section 62(a)(15)]. You can deduct 19 cents per mile if you drive to the new location. Moving expenses, down payment or closing costs on your new residence that your employer reimburses you for are taxable income -IRC 82. However, your employer may exclude this amount from your gross income by treating it as a fringe benefit qualified moving expense reimbursement under IRC Section 132(a)(6).

* If you worked in the USA and during the tax year you moved from one state to another to be gainfully employed you may be required to file more than one state tax return. If you moved and work overseas, Tax Treaties between the USA and the foreign country may enable you to claim the Foreign Tax Credit and the Foreign Income Exclusion, etc.

We prepare tax returns for the following taxpayers:

1) Taxpayers who moved from New York State to live and work in NJ, CT, CA, GA, PA, etc.; and taxpayers who moved from another states to New York. (Part-Year state residence; and credit for tax paid to another state).

2) Taxpayers who live in New York City and travel to work in another state (NJ, CT, PA, GA, CA, etc.). (Non Residence, Part Year residence and credit for tax paid to another state).

3) Taxpayers who lived in New York City and moved to Long Island and upstate New York during the year (Change of City Residence).

4) New York City Government employees who reside outside the City of New York, such as Long Island and upstate New York — Form 1127.

18) Casualty and theft losses (IRC Section 165). You may be able to deduct a tax deduction if you lost money in a failed financial institution or suffered a loss caused by robbery, vandalism, fire, hurricane or storm that was not reimbursed by insurance. The IRS requires you to provide a police report for theft of your property and an insurance claims adjuster's report to substantiate proof of losses.

Alimony paid or received [IRC Sections 61(a), 215(a), and 682(a)]. If your divorce decree or separate maintenance agreement requires you to pay alimony and child support and you pay less than the annual total amount, your payment will first be applied to child support. The balance of your payment will be applied to alimony. Alimony received is taxable to the recipient/former spouse. It is deductible from gross income by the payer/former spouse. It is an "Above-the-line" item. Therefore, the payer spouse does not have to itemize deductions to be allowed the deduction.

20) NY State 529 College Tuition Savings Program. Anybody can contribute money to this plan to pay for any child's college tuition in the future. The child (or children) does not have to be the taxpayer's dependent. Taxpayers filing single or head of household can contribute a maximum of $5,000 per year and married persons filing a joint tax return can contribute a maximum of $10,000 per year. This deduction is allowed by New York state only. It is not a Federal tax deduction. This is an "above-the-line" item of deduction on New York state tax returns. Therefore, taxpayers do not have to itemize their expenses to take this deduction.

This is a partial list of the information needed to prepare your personal tax return. Tax rules and deductions are subject to change without notice. Call our office if you would like us to prepare your tax return (718) 677- 4006; or call the IRS at (800) 829-1040.