Preparing and filing your income tax returns is a bother and quite a job, even with the help of computers, etc.
That work is easier if you have all the necessary and helpful information handy.
Many folks have already started their 2011 "tax file" to hold information as the year goes by.
That information includes the list of "noncash charitable contributions." That list is best done as you put the items in a bag or box. You need to list the items (i.e. four pair shoes) and your best memory of the original cost. Then a column that shows the estimated fair market value (what the thrift shop can sell it for). It would be great to take a photo of the items if they are special or unusual and put a copy in your file.
If you save that information in your "2011 tax file" ... it will be fairly easy to claim the lower of your cost or the fair market value when your 2011 return is prepared.
Those deductions will help reduce the tax. With the receipt from the charity in your "2011 tax file" and your detailed list, you have the information that is needed later.
It could be a help to start a list of any items you sold in 2011. If it's stocks or bonds, you want to have the date purchased and your cost or tax basis. If the broker report shows that the broker does not know your cost, then now is a good time to start working on getting that information. That can speed up the preparation of the tax return and that might speed up the refund to you.
Some folks keep sort of a running total to know if they have net gains or net losses so far for the year. That way they can easily see what actions they might consider before the year is over (sell one of the losers to get a capital loss deduction, etc).
If you have rental operations, then keeping the details of receipts and expenditures as the year goes along is helpful. You can do this many ways, with or without a computer. If you have a separate bank account for that activity, I'm sure you are reconciling the monthly bank statements as the year goes along. Those bank charges are a good expense deduction too.
The storm door, insulation, etc. that you pay for in 2011 can give an energy tax credit. That information can be saved in your "2011 tax file" to help you get the tax savings.
That "2011 tax file" is a good place to put your questions that you want to get answered later. All questions are valid. The tax law has many special deductions, credits and I hope you get all of the benefits to which you are entitled.
Did you hear "Thinking is like loving and dying - each of us must do it for himself" by Josiah Royce.
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.
