What Does an Accountant Need to Do Your Taxes?

Preparing for tax season involves gathering various documents and information. Organizing these details upfront helps streamline the work for your accountant. This proactive approach minimizes delays, contributes to a precise calculation of your tax obligations or refund, and allows your accountant to identify all applicable deductions and credits, optimizing your tax outcome.

Personal and Identifying Details

Your accountant requires fundamental personal information to prepare your tax return. This includes full legal names and Social Security Numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs) for yourself, your spouse, and any dependents. Accurate numbers are important for identity verification and claiming eligible dependents, as discrepancies can lead to processing delays with the IRS.

You will also need to provide dates of birth for all individuals listed on the return, along with your current mailing address and contact information. For direct deposit of refunds or direct debit of taxes owed, your bank account routing and account numbers are necessary. A photo identification, like a driver’s license, might be requested, especially during your initial engagement with a new accountant.

Documents for Income Reporting

Your accountant needs specific documents to report all income sources received throughout the year. These forms are typically issued by employers, financial institutions, or other entities that paid you.

Form W-2 reports wages, salaries, tips, and other compensation from an employer, along with taxes withheld. For independent contractors or freelancers, Form 1099-NEC reports nonemployee compensation. Form 1099-MISC reports miscellaneous income.

Form 1099-INT reports interest income. Form 1099-DIV shows dividends and distributions. Form 1099-R reports distributions from pensions, annuities, and retirement plans. Form 1099-G reflects government payments, including unemployment compensation and state tax refunds.

If you have investments in partnerships, S corporations, or trusts, you will receive a Schedule K-1 detailing your share of income, deductions, and credits. For self-employment or business income, records of gross receipts and all business expenses are necessary, which may include home office details. Rental property owners should provide income statements and expense records, such as mortgage interest and property taxes.

Information for Deductions and Credits

Your accountant requires specific documentation for all claimed deductions and credits. These records substantiate the expenses or situations that qualify you for tax benefits.

Form 1098 reports mortgage interest paid. For education-related expenses, Form 1098-E shows interest paid on qualified student loans, and Form 1098-T indicates tuition and related expenses.

Records for child care expenses must include the provider’s name, address, and their Employer Identification Number (EIN) or Social Security Number (SSN). Charitable contribution receipts are important for donations, with acknowledgment letters required for larger contributions. Itemized medical expense records, including total out-of-pocket costs, are also necessary.

Documentation for state and local taxes (SALT) paid is needed for potential deductions. Records of contributions made to IRAs or 401(k) plans outside of payroll deductions should be provided. If you sold a home, the closing statement, often Form 1099-S, and records of any significant improvements are relevant. For alimony, a divorce decree and payment records are needed.

Records for Investments and Other Assets

Your accountant needs specific forms and detailed records for investment transactions, especially for calculating capital gains and losses.

Form 1099-B reports the proceeds from broker and barter exchange transactions. For these transactions, provide cost basis information to determine the taxable gain or deductible loss.

Distributions from Health Savings Accounts (HSAs) or Archer MSAs are reported on Form 1099-SA. Form 1099-LTC details long-term care and accelerated death benefits received. For cryptocurrency transactions, records of all purchases, sales, exchanges, and other dispositions, including dates and values, are necessary.

If you hold foreign bank accounts, information for FinCEN Form 114 (Report of Foreign Bank and Financial Accounts, or FBAR) may be required. Additionally, records of significant life changes, such as marriage or divorce decrees, birth certificates for new dependents, adoption papers, or death certificates, can impact your tax situation.

Prior Year Tax Information and Communication

Providing your accountant with previous tax returns ensures continuity and helps identify potential carryforwards or tax planning opportunities. This historical information offers a comprehensive view of your financial situation.

Prior year federal and state tax returns help your accountant understand your tax history and identify any unused capital losses, net operating losses, or other carryforwards that can reduce current or future tax liabilities. If you are working with a new accountant, these past returns are particularly important for establishing a baseline.

Records of any quarterly estimated tax payments made throughout the year, typically documented with Form 1040-ES vouchers or bank statements, are necessary to credit these payments against your total tax due. Any correspondence or notices received from the IRS or state tax authorities should also be shared. Providing information or access to online tax portals can allow your accountant to retrieve necessary tax documents directly. Finally, you may need to sign consent forms required by your accountant for e-filing your return or to represent you before tax authorities.