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.

Tax Questionnaire

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 and to the best of your ability.  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. In some sections, we have asked if you have included a receipt. The receipts will help us ensure we have properly classified the item. 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.

Background Information

The first two pages give us a sense of your current situation. Please include yours (and your spouse’s, if you are married) information. Additionally, please provide any information on your dependents that may be missing from our records. If you incurred any childcare expenses or college tuition or student loan payments for you or a child, please include that information and any tax documents you received.

For the mailing address, please provide one we can add to our records where we could reliably forward any tax refunds and/or correspondences we may receive on your behalf.

To help facilitate the tax preparation process, we are also asking for contact information for your agent and financial advisor (if applicable). This will help us track down missing information or receive clarification as questions arise without asking you to take time out of your busy schedule.

Next, please include whether or not you held, bought, and/or sold Cryptocurrency through the year. Buying or holding Cryptocurrency will have no impact on your tax liability but does need to be reported. If you sold any, please include any summaries you receive.

Finally, we would strongly advise utilizing direct deposit for any refunds or balances due. If you are due a refund, your receive the money much faster. If you have a balance due, we will contact you prior to filing. Please provide your bank information to do so. If we did your taxes last year, we have the information on file.

Tax Documents

Wage Slips

Employee wage statements (W-2’s in the U.S. or T-4s in Canada) 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 or 1099-NEC and they too are required to be provided to you by January 31st.  If you received income during 2021 but do not have a W-2’s or 1099-MISC/NEC from the payer, it’s extremely important to note the amount and who it was received from on your questionnaire in order for us to help you track them down.

For anyone who worked or played for a team based outside of the U.S. or Canada, please forward any documents you have that detail your earnings throughout the year. Ideally, a year end wage statement will be issued to you by your team. However, we recognize it is sometimes difficult to get that document from some foreign teams. If that is the case, please forward any paystubs or other documents showing your earnings you may have received through the year.

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.

Itineraries & Missing Games

Team itineraries provide us beneficial information to assist us in preparing your taxes.  Please include your team’s monthly itinerary with your tax questionnaire. With the ongoing COVID pandemic, many individuals are missing road trips with their team. Not traveling to a road game will reduce your income earned in the state and could lower your tax liability. If you did not travel to a game, please include the dates/games you missed.

Stimulus & Advance Child Credit Payments

The COVID pandemic has brought with it unique tax credit payments. During the year, you may have received a third stimulus payment, which was authorized in March 2021. If you received that payment, please provide the amount and include Notice 1444-C, which is a letter outlining the amount you received. You may also have received a monthly Advanced Child Credit payments from July until December. Please provide the total amount you received through the year and include Letter 6419. Please note, if our firm’s address is used on your tax return, we received these letters directly and have added them to your tax records.  

Financial statements

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 February 15th, however, in the past, the U.S. government has allowed an extension to March 15th due to the statement’s complexity. If you work with a financial advisor, please include their contact information with the questionnaire so we can touch base with them if we have questions or to assist you in tracking down missing documents. 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.

Health Insurance

One of the biggest changes over the last few years is the requirement for health insurance coverage. It is currently not required at the federal level but may be at the state level. Our questionnaire has a few questions to determine your reporting requirements. If you received coverage through your employer, simply check “Yes” for that question and no further action is needed.  If you obtained your coverage through the Marketplace, this information will be reported on a 1095-A. Please be sure to include this document if it was issued to you.

Tax deductions

Retirement Contributions

There are multiple options available to individuals who wish to contribute to a retirement account. If you will file a Canadian resident return you may make a contribution prior to February 28th. Otherwise, you may make a $6,000 contribution to a Traditional IRA or ROTH IRA account prior to April 15th. Traditional IRAs provide immediate tax savings, while ROTH contributions provide no immediate tax savings but allow your investments to grow and be withdrawn later tax free. There are income limits on a direct ROTH IRA contribution, but a legal backdoor way exists to contribute if you fall above the income limit. If you would like to discuss further, please let us know

Business Deductions

The changes in tax law have greatly reduced the ability to deduct businesses expenses not related to self-employment. To help simplify what may be beneficial to you, we would recommend only spending time on including agent fees, union dues, and conditioning expenses.

Mortgage Statements

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.

Medical Expenses

Although medical expenses can be used as a tax deduction, you will need to have had little income or a large amount of expenses for them to provide any savings. Unless that applies to you, you should skip this section.

Income from Self-Employment and Rental Properties

If you earn income from running your own business and/or a rental property it is important to keep good records and provide the most accurate information to us. You should total all of the income you earned throughout the calendar year for each business and/or rental property you own. You are allowed to take any expenses that are related to earning that income. Those expenses should be substantiated by a receipt. If you own or operate more than one business or rental property, please do your best to keep your income and expenses separate.

Deadlines

The tax deadline this year to file your 2021 return or to request an extension is Monday 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 do your best to provide your documents to us between March 1st to March 15th.

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