Statements of fact and opinion are the authors’ responsibility alone and do not imply an opinion on the part of PICPA officers or members. The information contained in herein does not constitute accounting, legal, or professional advice. For professional advice, please engage or consult a qualified professional.

What You Need to Take to Your Tax Preparer

Lora Bahrey-Ament, CPABy Lora Bahrey-Ament, CPA

MoneyLife100Since many aspects of the Tax Cuts and Jobs Act of 2017 will come into play for the first time on 2018 tax returns, it is especially critical to make sure you engage a tax return preparer who is right for your needs and, just as importantly, you provide all pertinent information to them so that they can prepare an accurate and complete tax return.

Before hiring a professional tax return preparer, you should be aware that tax professionals have different levels of skill, education, expertise, and representation rights. Any tax professional with an IRS Preparer Tax Identification Number (PTIN) is authorized to prepare federal tax returns, but not everyone who has a PTIN has the same credentials. Certified public accountants (CPAs), enrolled agents, and attorneys have unlimited representation rights before the IRS, meaning they may represent you on any matters including audits, payment and collection issues, and appeals.

Tax File FolderOrganize Your Documents

Prior to meeting with your preparer, it is a good idea to organize all your tax-related documents. If you will be meeting with the tax professional for the first time, you will need to provide certain personal information as well as documentation substantiating your income and deductions.

Get a copy of both your and your spouse’s drivers’ licenses and Social Security cards or tax ID cards. If you have children, provide their dates of birth as well as a copy of their Social Security cards. You must have a valid Social Security number/tax ID number for every person included on your tax return to electronically file with the IRS.

Include a copy of last year’s federal, state, and local tax returns since you may be able to claim some of the same deductions this year, or you may have carryovers from last year’s returns that can be used in the current tax year. Also, supply copies of any prior year gift tax returns and any relevant trust agreements.

For those with children in childcare, you will need to provide copies of your childcare records and the provider’s tax ID number. Divorced taxpayers who have children should provide a copy of Form 8332, if applicable. Form 8332 is used by the custodial parent to release or revoke a release of claim to exemption for a child. Even though personal exemptions have been suspended through tax year 2025, eligibility to claim the exemption for a child remains important for determining filing status as well as who may claim the child tax credit.

Income Documentation

Taxpayers receive a Form W-2 (Wage and Tax Statement) from every employer he or she worked for during the year. If you do not receive one by Jan. 31, you should contact your employer. There are also various Form 1099s that you may have received that your tax professional will need. For example, if you received nonemployee compensation of $600 or more during the year, a Form 1099-MISC (Miscellaneous Income) should be sent to you by Jan. 31 as well.

If you earned interest from a bank, it will send you a Form 1099-INT (Interest Income). Dividend income from stocks or funds will be reported on a Form 1099-DIV (Dividends and Distributions) from each company or institution. You may also receive a Form 1099-B if you sold stock, bonds, or other investments from each company or institution.

State unemployment compensation received during the year also needs to be included as income on the tax return. Form 1099-G should be sent to you from the state by Jan. 31.

For those who receive Social Security payments, some of these funds may be taxable income. The taxpayer should bring Form SSA-1099 (Social Security Benefit Statement) so your tax professional can determine how much of the benefit is taxable, if any. Here are some of the common 1099 variants that you will need to provide to your tax return preparer, if applicable:

A (Foreclosure of a home)
B (Sales of stock, bonds, or other investments)
C (Cancellation of debt)
DIV (Dividends)
G (State tax refunds and unemployment compensation)
INT (Interest income)
K (Business or rental income processed by third parties)
LTC (Benefits received from a long-term care policy)
MISC (Self-employment and other various types of income)
OID (Original issue discount on bonds)
(Patronage dividends)
(Distributions from an education savings plan)
(Distributions from individual retirement accounts, 401(k) plans, and other retirement savings plans)
(Railroad retirement benefits)
(Proceeds from the sale of real estate)
(Distributions from health savings accounts)
(Social Security benefits)


If you received income that is not reported on any of these forms you are still required to report and pay taxes on that income. Also, if you received any income from partnerships, S corporations, estates, or trusts, you should receive a Schedule K-1 that provides information as to any income, deductions, or credits passed on to you. You will need to report this on your tax return.

Tax Deduction Documentation

Personal exemptions have been suspended through tax year 2025. However, the 2018 standard deductions has nearly doubled to $12,000 for individuals, $24,000 for a married couple filing jointly, and $18,000 for head of households. Due to the higher standard deduction amounts, fewer taxpayers will be claiming itemized deductions rather than taking the standard deduction.

For those taxpayers who still find it beneficial to itemize (when the sum of itemized deductions is greater than the standard deduction), they will be able to deduct the following expenses.

Home Mortgage Loan Interest – The mortgage holder should send a Form 1098 by Jan. 31 that shows how much has been paid in interest the previous year. For mortgages taken out on or before Dec. 15, 2017, homeowners can deduct mortgage interest paid on up to $1 million of principal value on a home. However, under the Tax Cuts and Jobs Act, the deduction allowed for mortgage interest on an owner-occupied home mortgages was lowered to $750,000 for home purchases. Therefore, interest paid on home mortgage loans of up to $750,000 (for mortgages taken out after Dec. 15, 2017) can be deducted in tax year 2018.

Medical, Dental, and Eye Care Expenses – Unreimbursed expenses are deductible only after they exceed 7.5 percent of the taxpayer’s adjusted gross income. Keep records of your family’s medical, dental, eye care, and health insurance expenses for the year to provide to your tax preparer.

Cash and Noncash Charitable Donations – Provide cancelled checks for any donations under $250. For any single contribution of $250 or more, the IRS requires you to keep written acknowledgements from the charitable organization. For noncash charitable donations, the amount of the contribution should be the fair market value of the property donated. If the noncash donation is greater than $5,000, an appraisal will be required to substantiate the value of the property.

State and Local Taxes – This deduction covers property, sales, and state and local income taxes. Taxpayers must choose between deducting either sales taxes or income taxes, not both. Beginning with tax year 2018, there is a limit of $10,000 that can be deducted. Be sure to keep accurate keep records of all taxes paid so your tax preparer can determine how to maximize this deduction.

Qualified Business Income Deduction

If you receive a Schedule K-1 from a partnership, LLC, S corporation, or some trusts, you may be entitled to a deduction of up to 20 percent of the qualified business income from a qualified trade or business. If you operate a sole proprietorship and file Schedule C or receive rental income and file Schedule E, you also may be eligible to claim the deduction. The qualified business income deduction can be taken in addition to the standard or itemized deductions. However, this deduction is subject to multiple limitations based on the type of trade or business, the taxpayers’ taxable income, the amount of W-2 wages paid with respect to the qualified trade or business, and the unadjusted basis of qualified property held by the qualified trade or business.

Tax Credits

Once your tax return preparer has calculated your federal income tax liability, he or she will investigate which federal tax credits you may be eligible to claim. Tax credits are even more beneficial than tax deductions: deductions reduce the amount of your income that is subject to tax, but a credit reduces your tax liability dollar for dollar. An important distinction among tax credits is whether they are refundable or nonrefundable. A refundable credit can be taken and refunded to the taxpayer, even if the taxpayer has no tax liability at all; a nonrefundable credit can only be used to reduce a taxpayer’s liability. The following are some commonly claimed tax credits:

  • Child Tax Credit – This credit is available to be claimed for qualified children under age 17. The child tax credit has been expanded to $2,000 per qualifying child, and is refundable up to $1,400, subject to phaseouts.
  • Child and Dependent Care Credit – This nonrefundable credit can be claimed if you paid for child or dependent care so that you could work. To claim this credit, you must furnish the care provider’s name, address, and EIN or Social Security number, as well as the amount paid during the year.
  • Family Tax Credit – This new, nonrefundable credit allows taxpayers a credit for certain dependents that don’t qualify for the child tax credit, such as qualifying children age 17 or older and adult dependents. The credit is $500 per qualifying dependent, subject to phaseouts.
  • Education Credits – An education credit may be claimed if the taxpayer, his or her spouse, or a dependent was a student enrolled at or attending an eligible educational institution. There are two education credits available: the American Opportunity Credit (part of which may be refundable) and the Lifetime Learning Credit (nonrefundable). Both can be claimed on the same tax return, but not for the same student. Your tax return preparer will be able to determine which credit you are entitled to claim on your tax return.

Communication is key to a successful relationship between you and your tax preparer. The tax preparer may ask certain questions and request information he or she believes is necessary to prepare a complete and accurate tax return. However, you must understand that the responsibility to provide all necessary information lies with you. To prepare an accurate report of all income and claim all deductions and credits entitled to the taxpayer, you must volunteer all information you believe the tax return preparer may need, and communicate any questions or concerns you have on a timely basis to ensure that all pertinent information is properly reported on the return.

If you would like to hire a CPA to complete your taxes and are not sure where to turn, visit the CPA Locator, a listing of Pennsylvania CPA firms with PICPA members.

Lora Bahrey-Ament, CPA, is manager in the tax consulting and compliance department at Louis Plung & Company. She is experienced in preparation of corporate, partnership, and multistate tax returns.

Load more comments
New code
Comment by from