Completing your Tax Questionnaire
As tax season approaches, I thought it might be helpful to provide some guidance on how to successfully proceed in collecting and organizing your information.
The first step is to download this year’s tax questionnaire. The questionnaire is our basis in understanding your unique tax situation and provides the opportunity for you to assist us in the preparation of your taxes. The tax questionnaire covers all tax situations. Since your situation is unique, not all sections in the questionnaire will apply to you, so please feel free to skip over those sections. However, for those sections that do apply to you – please fill them out completely. Should you have any confusion over a question please don’t hesitate to contact me.
Wage, financial, insurance and mortgage statements are a few of the documents you will receive that need to be included with your questionnaire. Also include receipts for any business related expenses. Below, I’ve outlined a few of the mentioned documents and provided a little background on what information each provides and when you should expect to receive them.
Employee wage statements (W-2’s in the U.S.) need to be provided to you by January 31st – therefore you should receive your statements prior to this date. Statements from endorsement or contracted income will be reported on a 1099-MISC and they too are required to be provided to you by January 31st. Since you may complete and hand in your questionnaire before receiving all of your W-2’s or 1099-MISC statements, it’s extremely important to note that you are expecting these statements and from who you are expecting them from on your questionnaire in order for us to help you track them down. One of the most common errors is neglecting to report this income and being audited later. Our goal is to make sure this doesn’t happen.
This information is reported on three separate documents that indicate interest (1099-INT), dividends (1099-DIV) and capital gains (1099-B) earned. If you work with a financial advisor you will receive these statements in a combined report that will be provided to you by January 31st however in the past, the U.S. government has allowed an extension to February 15th due to the statements complexity. If you work with a financial advisor, please include their contact information with the questionnaire. Since this income is reported to the Internal Revenue Service (IRS), should you fail to report it on your tax return – it sets off a red flag and you will be audited.
One of the biggest changes over the last few years is the requirement for health insurance coverage. Although this may change in the future, you will still need to indicate your health coverage for 2016. If you obtained your coverage from your employer this will be reported on a 1095-C. If you obtained your coverage through the Marketplace this information will be reported on a 1095-A. All other coverage will be reported on a 1095-B.
If you financed your home, you are able to deduct your mortgage interest and property taxes. If your taxes are escrowed through your mortgage, both the taxes and mortgage interest paid will be reported on a 1098 mortgage statement. Mortgage interest statements are provided to you by January 31st and in general are included with your January mortgage statement or can be downloaded from your mortgage providers web site. If you don’t have a mortgage, or pay your property taxes separate from a mortgage, you need to obtain a receipt showing that these taxes were paid.
Business related expenses
As a professional athlete, you are able to lower your tax burden by claiming business related deductions. In order to substantiate your deductions, you will not only be required to prove payment but be able to show that the item was ordinary and necessary to your profession (agent fees, travel, training and equipment) with a receipt. One of the best ways to do this is to keep receipts for similar expenses in an envelope and make a note for what the receipt was for. Since agent fees, travel and training expenses can be substantial, they are red flags to the IRS – therefore it is important to keep these records and to include them with your questionnaire.
Team itineraries provide us beneficial information to assist us in preparing your taxes. Please include your team’s monthly itinerary with your tax questionnaire.
The tax deadline this year to file your returns or to request an extension is Tuesday April 18th in the U.S. and April 30th in Canada. In order for us to have ample amount of time to complete your tax return please provide your documents to us between March 1st to March 15th.AFP Consulting LLC, tax questionnaire
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