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Tax Extension
Personal Tax Prep Checklist
LAE Business Services, Inc.
P: 631-664-1390 F: 631-382-8334
www.laebusiness.com Email: info@laebusiness.com
Click to print Checklist- What Documents Do I Need to File My Taxes
What you need to file your taxes varies depending on your situation. For example, a tax prep checklist for a self-employed college student may include a 1099 and 1098-T. However, if you weren’t in college and only received a W-2, you could skip those items on your tax documents checklist.
Whether you see a tax professional or prepare your taxes on your own, we’re here to help you determine what forms and information you need to file your taxes.
Use the tax checklist below to find the documents and forms you’ll need to get started.
Personal Information
Tax Identification Numbers are mandatory items on your tax prep checklist. All taxpayers will need the following information.
- Your social security number or tax ID number
- Your spouse’s full name and social security number or tax ID number
Dependent(s) Information
Parents and caregivers should gather this information as they review what they need to file their taxes.
- Dates of birth and social security numbers or tax ID numbers
- Childcare records (including the provider’s tax ID number) if applicable
- Income of other adults in your home
- Form 8332 showing that the child’s custodial parent is releasing their right to claim a child to you, the noncustodial parent (if applicable)
Sources of Income
Many of these forms won’t apply every year. For example, you will only receive the investment forms you may need to file your taxes if you had distributions or other activity.
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Employed
- Forms W-2
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Unemployed
- Unemployment, state tax refund (1099-G)
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Self-Employed
- Forms 1099, Schedules K-1, income records to verify amounts not reported on 1099s
- Records of all expenses — check registers or credit card statements, and receipts
- Business-use asset information (cost, date placed in service, etc.) for depreciation
- Office in home information, if applicable
- Record of estimated tax payments made (Form 1040–ES)
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Rental Income
- Records of income and expenses
- Rental asset information (cost, date placed in service, etc.) for depreciation
- Record of estimated tax payments made (Form 1040–ES)
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Retirement Income
- Pension/IRA/annuity income (1099-R)
- Traditional IRA basis (i.e., amounts you contributed to the IRA that were already taxed)
- Social security/RRB income (1099-SSA, RRB-1099)
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Savings & Investments or Dividends
- Interest, dividend income (1099-INT, 1099-OID, 1099-DIV)
- Income from sales of stock or other property (1099-B, 1099-S)
- Dates of acquisition and records of your cost or other basis in property you sold (if basis is not reported on 1099-B)
- Health Savings Account and long-term care reimbursements (1099-SA or 1099-LTC)
- Expenses related to your investments
- Record of estimated tax payments made (Form 1040–ES)
- Transactions involving cryptocurrency (Virtual currency)
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Other Income & Losses
- Gambling income (W-2G or records showing income, as well as expense records)
- Jury duty records
- Hobby income and expenses
- Prizes and awards
- Trusts
- Royalty Income 1099–Misc.
- Any other 1099s received
- Record of alimony paid/received with ex-spouse’s name and SSN
Types of Deductions
The types of deductions you can take depend a lot on your life situation. It’s likely you won’t need all of the records listed below for your tax documents checklist.
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Home Ownership
- Forms 1098 or other mortgage interest statements
- Real estate and personal property tax records
- Receipts for energy-saving home improvements (e.g., solar panels, solar water heater)
- All other 1098 series forms
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Charitable Donations
- Cash amounts donated to houses of worship, schools, other charitable organizations
- Records of non-cash charitable donations
- Amounts of miles driven for charitable or medical purposes
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Medical Expenses
- Amounts paid for healthcare insurance and to doctors, dentists, hospitals
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Health Insurance
- Form 1095-A if you enrolled in an insurance plan through the Marketplace (Exchange)
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Childcare Expenses
- Fees paid to a licensed day care center or family day care for care of an infant or preschooler
- Wages paid to a baby-sitter
Don’t include expenses paid through a flexible spending account at work
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Educational Expenses
- Forms 1098-T from educational institutions
- Receipts that itemize qualified educational expenses
- Records of any scholarships or fellowships you received
- Form 1098-E if you paid student loan interest
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K-12 Educator Expenses
- Receipts for classroom expenses (for educators in grades K-12)
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State & Local Taxes
- Amount of state/local income tax paid (other than wage withholding), or amount of state and local sales tax paid
- Invoice showing amount of vehicle sales tax paid
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Retirement & Other Savings
- Form 5498-SA showing HSA contributions
- Form 5498 showing IRA contributions
- All other 5498 series forms (5498-QA, 5498-ESA)
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Federally Declared Disaster
- City/county you lived/worked/had property in
- Records to support property losses (appraisal, clean up costs, etc.)
- Records of rebuilding/repair costs
- Insurance reimbursements/claims to be paid
- FEMA assistance information
- Check FEMA site to see if my county has been declared a federal disaster area
RS Gives Tax Relief to Victims of California Wildfires; Extension Filers Have Until Jan. 31 to File
IR-2017-172, Oct. 13, 2017
WASHINGTON –– Victims of wildfires ravaging parts of California now have until Jan. 31, 2018, to file certain individual and business tax returns and make certain tax payments, the Internal Revenue Service announced today.
This includes an additional filing extension for taxpayers with valid extensions that run out this coming Monday, Oct. 16.
Currently, the IRS is providing relief to seven California counties: Butte, Lake, Mendocino, Napa, Nevada, Sonoma and Yuba. Individuals and businesses in these localities, as well as firefighters and relief workers who live elsewhere, qualify for the extension. The agency will continue to closely monitor this disaster and may provide other relief to these and other affected localities.
The tax relief postpones various tax filing and payment deadlines that occurred starting on Oct. 8, 2017. As a result, affected individuals and businesses will have until Jan. 31, 2018, to file returns and pay any taxes originally due during this period.
This includes the Jan. 16, 2018 deadline for making quarterly estimated tax payments. For individual tax filers, it also includes 2016 income tax returns that received a tax-filing extension until Oct. 16, 2017. The IRS noted, however, that because tax payments related to these 2016 returns were originally due on April 18, 2017, those payments are not eligible for this relief.
A variety of business tax deadlines are also affected, including the Oct. 31 deadline for quarterly payroll and excise tax returns. Calendar-year tax-exempt organizations whose 2016 extensions run out on Nov. 15, 2017 also qualify for the extra time.
In addition, the IRS is waiving late-deposit penalties for federal payroll and excise tax deposits normally due after Oct. 8 and before Oct. 23, if the deposits are made by Oct. 23, 2017. Details on available relief can be found on the disaster relief pageon IRS.gov.
The IRS automatically provides filing and penalty relief to any taxpayer with an IRS address of record located in the disaster area. Thus, taxpayers need not contact the IRS to get this relief. However, if an affected taxpayer receives a late filing or late payment penalty notice from the IRS that has an original or extended filing, payment or deposit due date falling within the postponement period, the taxpayer should call the number on the notice to have the penalty abated.
In addition, the IRS will work with any taxpayer who lives outside the disaster area but whose records necessary to meet a deadline occurring during the postponement period are located in the affected area. Taxpayers qualifying for relief who live outside the disaster area need to contact the IRS at 866-562-5227. This also includes firefighters and workers assisting the relief activities who are affiliated with a recognized government or philanthropic organization.
Individuals and businesses who suffered uninsured or unreimbursed disaster-related losses can choose to claim them on either the return for the year the loss occurred (in this instance, the 2017 return normally filed next year) or the return for the prior year (2016). See Publication 547 for details.
The tax relief is part of a coordinated federal response to the damage caused by these wildfires and is based on local damage assessments by FEMA. For information on disaster recovery, visit disasterassistance.gov.
Medical and Dental Expenses May Impact Your Taxes
Issue Number: IRS Tax Tip 2017-26
Medical and Dental Expenses May Impact Your Taxes
Medical expenses can trim taxes. Keeping good records and knowing what to deduct make all the difference. Here are some tips to help taxpayers know what qualifies as medical and dental expenses:
- Itemize. Taxpayers can only claim medical expenses that they paid for in 2016 if they itemize deductions on a federal tax return.
- Qualifying Expenses. Taxpayers can include most medical and dental costs that they paid for themselves, their spouses and their dependents including:
- The costs of diagnosing, treating, easing or preventing disease.
- The costs paid for prescription drugs and insulin.
- The costs paid for insurance premiums for policies that cover medical care.
- Some long-term care insurance costs.
Exceptions and special rules apply. Costs reimbursed by insurance or other sources normally do not qualify for a deduction. More examples of what costs taxpayers can and can’t deduct are in IRS Publication 502, Medical and Dental Expenses.
- Travel Costs Count. It is possible to deduct travel costs paid for medical care. This includes costs such as public transportation, ambulance service, tolls and parking fees. For use of a car, deduct either the actual costs or the standard mileage rate for medical travel. The rate is 19 cents per mile for 2016.
- No Double Benefit. Don’t claim a tax deduction for medical expenses paid with funds from your Health Savings Accounts or Flexible Spending Arrangements. Amounts paid with funds from these plans are usually tax-free.
- Use the Tool. Taxpayers can use the Interactive Tax Assistant tool on IRS.gov to see if they can deduct their medical expenses.
Taxpayers should keep a copy of their tax return. Beginning in 2017, taxpayers using a software product for the first time may need their Adjusted Gross Income (AGI) amount from their prior-year tax return to verify their identity. Taxpayers can learn more about how to verify their identity and electronically sign tax returns at Validating Your Electronically Filed Tax Return.
Always consult your tax professional. info@laebusiness.com
IRS “Dirty Dozen” Series of Tax Scams for 2017
Issue Number: IR-2017-23
IRS “Dirty Dozen” Series of Tax Scams for 2017 Includes Return Preparer Fraud; Choose Reputable Return Preparers
IR-2017-23, Feb. 6, 2017
WASHINGTON — The Internal Revenue Service today warned taxpayers to be on the lookout for unscrupulous return preparers, one of the most common “Dirty Dozen” tax scams seen during tax season.
The vast majority of tax professionals provide honest, high-quality service. But there are some dishonest preparers who set up shop each filing season to perpetrate refund fraud, identity theft and other scams that hurt taxpayers. That’s why unscrupulous preparers who prey on unsuspecting taxpayers with outlandish promises of overly large refunds make the Dirty Dozen list every year.
“Choose your tax return preparer carefully because you entrust them with your private financial information that needs to be protected,” said IRS Commissioner John Koskinen. “Most preparers provide high-quality service but we run across cases each year where unscrupulous preparers steal from their clients and misfile their taxes.”
Return preparers are a vital part of the U.S. tax system. About 60 percent of taxpayers use tax professionals to prepare their returns.
Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.
Choosing Return Preparers Carefully
It is important to choose carefully when hiring an individual or firm to prepare a tax return. Well-intentioned taxpayers can be misled by preparers who don’t understand taxes or who mislead people into taking credits or deductions they aren’t entitled to in order to increase their fee. Every year, these types of tax preparers face everything from penalties to jail time for defrauding their clients.
Here are a few tips when choosing a tax preparer:
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- Ask if the preparer has an IRS Preparer Tax Identification Number (PTIN). Paid tax return preparers are required to register with the IRS, have a PTIN and include it on tax returns.
- Inquire whether the tax return preparer has a professional credential (enrolled agent, certified public accountant or attorney), belongs to a professional organization or attends continuing education classes. A number of tax law changes can be complex. A competent tax professional needs to be up-to-date in these matters. Tax return preparers aren’t required to have a professional credential. The IRS website has more information regarding the national tax professional organizations.
- Check the preparer’s qualifications. Use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help locate a tax return preparer with the preferred qualifications
- The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:
- Attorneys
- CPAs
- Enrolled Agents
- Enrolled Retirement Plan Agents
- Enrolled Actuaries
- Annual Filing Season Program participants
- Check the preparer’s history. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. For attorneys, check with the State Bar Association. For Enrolled Agents, go to IRS.gov and search for “verify enrolled agent status” or check the Directory.
- Ask about service fees. Avoid preparers who base fees on a percentage of their client’s refund or boast bigger refunds than their competition. Don’t give your tax documents, SSNs, and other information to a preparer when only inquiring about their services and fees. Unfortunately, some preparers have improperly filed returns without the taxpayer’s permission once the records were obtained.
- Ask to e-file your return. Make sure your preparer offers IRS e-file. Paid preparers who do taxes for more than 10 clients generally must file electronically. The IRS has processed more than 1.5 billion e-filed tax returns. It’s the safest and most accurate way to file a return.
- Provide records and receipts. Good preparers will ask to see your records and receipts. They’ll ask questions to determine your total income, deductions, tax credits and other items. Do not rely on a preparer who is willing to e-file your return using your last pay stub instead of your Form W-2. This is against IRS e-file rules.
- Make sure the preparer is available. In the event questions come up about your tax return, you may need to contact your preparer after the return is filed. Avoid fly-by-night preparers.
- Understand who can represent you. Attorneys, CPAs, and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent you in limited situations if they prepared and signed your return. However, non-credentialed preparers who do not participate in the Annual Filing Season Program may only represent clients before the IRS on returns they prepared and signed on or before Dec. 31, 2015.
- Never sign a blank return. Don’t use a tax preparer that asks you to sign an incomplete or blank tax form.
- Review your return before signing. Before you sign your tax return, review it and ask questions if something is not clear. Make sure you’re comfortable with the accuracy of the return before you sign it and that your refund goes directly to you – not into the preparer’s bank account. Reviewing the routing and bank account number on the completed return is always a good idea.
- Report abusive tax preparers to the IRS. You can report abusive tax return preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer. If you suspect a return preparer filed or changed the return without your consent, you should also file Form 14157-A, Return Preparer Fraud or Misconduct Affidavit. You can get these forms on IRS.gov.
- To find other tips about choosing a preparer, understanding the differences in credentials and qualifications, researching the IRS preparer directory, and learning how to submit a complaint regarding a tax return preparer, visit www.irs.gov/chooseataxpro.
Remember: Taxpayers are legally responsible for what is on their tax return even if someone else prepares it. Make sure the preparer you hire is up to the task.
NY Filing Requirements for Highway Use Tax
New York State imposes a highway use tax (HUT) on motor carriers operating certain motor vehicles on New York State public highways (excluding toll-paid portions of the New York State Thruway). The tax rate is based on the weight of the motor vehicle and the method that you choose to report the tax.
If you have been issued a certificate of registration ( except a highway use tax trip certificate of registration), you must file a highway use tax return even if no tax is due, or even if another person will pay any tax due on the use of the vehicle operated under the certificate of registration.
There are two ways to file:
Web File: You may Web File your highway use tax return.
File by mail: You may file a paper tax return using Form MT-903, Highway Use Tax Return.
When to file and pay:
Quarterly – You must file a highway use tax return and make payment of tax due each quarter, starting with the calendar quarter when you began operations in New York State.
The periods and due dates for quarterly filing are:
Reporting quarter Due date
January through March April 30
April through June July 31
July through September October 31
October through December January 31 (following year)
Monthly – After filing quarterly in the first year, you will be reclassified by the Tax Department to a monthly filer if your preceding calendar year’s total highway use tax is more than $4,000. You must begin filing monthly highway use tax returns for the January reporting period. Returns are due by the last day of the month following each reporting period.
Requesting change of filing period
If your preceding calendar year’s total highway use tax liability is $4,000 or less, and you were subject to the highway use tax during the entire year, you may request permission to file quarterly.
If your preceding calendar year’s total highway use tax liability is $250 or less, and you were subject to the highway use tax during the entire year, you may request permission to file once a year.
Submit your request and taxpayer identification number to:
NYS Tax Department
Miscellaneous Tax – Highway Use Tax
W A Harriman Campus
Albany NY 12227
Always consult your tax professional before filing any returns..
Contact us to schedule an appointment and take the guess work out of filing. info@laebusiness.com
IRS Announced 2016 Standard Mileage Rates and They’re DOWN from 2015!!
The IRS announced on December 17, 2015 the new 2016 tax-deduction rates for using your vehicle for business, charity, medical and moving…
These rates tend to change from year to year, usually going up. This will not be the case for 2016! Vehicle-Use tax-deduction rates will decrease in 2016:
• Business: 54¢ per mile (57.5¢ in 2015, decrease of 3.5¢)
• Charity: 14¢ per mile ( 14¢ 2015, No change)
• Medical: 19¢ per mile (23¢ in 2015, decrease of 4¢)
• Moving: 19¢ per mile (23¢ in 2015, decrease of 4¢)
Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.
Stay up to date with the latest tax news and information at LAE Business Services on LinkedIn.
Understanding the Affordable Care Act (ACA)
Starting January 2014, The Individual Shared Responsibility provision of the Affordable Care Act takes effect. This means that each and every taxpayer (and family member) is now required to maintain basic health insurance, also known as “minimal essential coverage.” You must either have health insurance coverage throughout the year, qualify for an exemption from coverage, or make a payment when you file your 2014 federal income tax return in 2015. Many people already have qualifying health insurance coverage and do not need to do anything more than maintain that coverage. Plans that meet the minimal essential coverage requirement may be obtained through employer-sponsored coverage, government programs, or the Health Insurance Marketplace. Visit the IRS website for a chart of coverage types that qualify.
Health Coverage Exemptions
There are a limited number of exemptions from the individual shared responsibility provision. Types of exemptions include: members of certain religious sects, members of Federally-recognized Native American tribes, certain non-citizens, households with income below the return filing threshold, people for whom coverage is considered unaffordable, incarceration exemptions, and certain hardship exemptions.
Exemptions must be obtained through either the Marketplace or the IRS. Exemptions are reported on your income tax return, but you are automatically exempt if you aren’t required to file a return because of insufficient income.
Individual Shared Responsibility Payment
The 2014 tax return (IRS Form 1040) will ask whether you have health insurance coverage or if you qualify for an exemption. If you (or any member of your household) do not have the minimal essential coverage and do not meet the exemption criteria, you will need to make an Individual Shared Responsibility payment. For 2014, the individual shared responsibility payment is the greater of:
- 1% of your household income above your tax filing threshold
- The flat dollar amount, which is $95 per adult and $47.50 per child, limited to a family maximum of $285
Health Care Tax Tips
Here are some general tax tips for the Affordable Care Act:
- Certain employers are required to report the cost of coverage under an employer-sponsored group health plan. Consequently, your employer may report the value of the health insurance provided to you on your Form W-2 (in Box 12 with Code DD) — however, it is not taxable income. This amount is only provided for informational purposes and should not be reported as taxable earnings.
- If you are self-employed, you can deduct the cost of health insurance premiums (within limits) on your Federal income tax return, as well as on your state tax return in many cases.
- Individuals and families with low or moderate income, who purchased health insurance through the Health Insurance Marketplace (the “Exchange”), may be eligible for a Premium Tax Credit designed to help them afford insurance coverage. You can elect to have the tax credit paid in advance to your insurance company to lower your monthly premiums, or you can claim all of the credit when you file your Federal tax return for the year. If you choose to have the credit paid in advance, you will need to reconcile the amount paid in advance with the actual credit you calculate (based upon family size and income) when you file your tax return.
- As part of the Affordable Care Act, an Additional Medicare Tax went into effect in 2013. This affects taxpayers at higher income levels (as measured by wages, compensation, and self-employment income). The rate of the Additional Medicare Tax is 0.9%. To find out if you are subject to this tax, you can view the income threshold chart on the IRS website.
Tax-Favored Health Plans
Some employers offer additional types of tax-favored health plans, including the following:
- A health flexible spending arrangement (FSA) enables you to reduce your taxable income by the amount of money you contribute.
- A health savings account (HSA) allows your employer to put money aside for you, which is not taxable to you within certain limits. Money that you put into an HSA generally qualifies for a tax deduction and can reduce your income tax liability. Money that you withdraw from an HSA to use for qualified medical expenses is not considered taxable income. However, withdrawals for other (nonqualified) purposes are taxable and may even trigger an additional tax.
- Money you receive from a health reimbursement arrangement (HRA) is usually not taxable.
Information for Employers
An employer’s tax responsibilities are based on how many employees they have and what type of health coverage they offer. The general rules are as follows:
- Employers with less than 25 full-time employees may qualify for the Small Business Health Care Tax Credit, which helps cover the cost of providing insurance coverage.
- Employers with 50 employees or less are generally eligible to purchase coverage through the Small Business Health Options Program (SHOP).
- Employers with 50 or more employees must file an annual information return and report what type of health insurance they provide (if any). These employers are also subject to the Employer Shared Responsibility Provisions under the Affordable Care Act.
For more information about how the health care law may affect you, please visit the IRS website: Affordable Care Act (ACA) Tax Provisions.
Still have questions? Consult with your local tax professional. You can email us at: info@laebusiness.com
Small Business Tax Prep Checklist
LAE Business Services, Inc.
373 Smithtown Bypass Suite 134, Hauppauge, NY 11788
P : 631-793-1292 F: 631-382-8334
www.laebusiness.com Email: info@laebusiness.com
Small Business Tax Prep Checklist
Income
Gross receipts from sales or services
Sales records (for accrual based taxpayers)
Returns and allowances
Business checking/savings account interest (1099-INT or statement)
Other income
Cost of Goods Sold (if applicable)
Inventory
Beginning inventory total dollar amount
Inventory purchases
Ending inventory total dollar amount
Items removed for personal purposes
Materials & Supplies
Expenses
Advertising
Phones (landline, fax or cell phones related to business)
Computer & internet expenses
Transportation and travel expenses
Local transportation
Business trip (mileage) log
Contemporaneous log or receipts for public transportation, parking, and tolls
Travel away from home:
Airfare or mileage/actual expense if drove
Hotel
Meals, tips
Taxi, tips
Internet connection (hotel, Internet café etc.)
Other
Commissions paid to subcontractors
File Form 1099-MISC and 1096 as necessary
Depreciation
Cost and first date of business use of assets
Records relating to personal use of assets
Sales price and disposition date of any assets sold
Business insurance
Casualty loss insurance
Errors and omissions
Other
Interest expense
Mortgage interest on building owned by business
Business loan interest
Investment expense and interest
Professional fees
Lawyers, accountants, and consultants
Office supplies
Pens, paper, staples, and other consumables
Rent expense
Office space rent
Business-use vehicle lease expense
Other
Office-in-home
Square footage of office space
Total square footage of home
Hours of use, if operating an in home daycare
Mortgage interest or rent paid
Homeowner’s or renters’ insurance
Utilities
Cost of home, separate improvements and first date of business use
Wages paid to employees:
Form W-2 and W-3
Federal and state payroll returns (Form 940, Form 941, etc.)
Employee benefit expenses
Contractors
Form 1099-MISc
Form 1096
Other expenses:
Repairs, maintenance of office facility, etc
Estimated tax payments made
Other business related expenses:
Health insurance [This needs to be left-aligned with “Other expenses”]
Premiums paid to cover the sole-proprietor and family
Premiums paid on behalf of partners and S corporation shareholders
Information on spouse’s employer provided insurance
Top Tips on Making IRA Contributions
IRS Tax Tip 2014-50
If you made IRA contributions or you’re thinking of making them, you may have questions about IRAs and your taxes. Here are some important tips from the IRS about saving for retirement using an IRA.
1. You must be under age 70 1/2 at the end of the tax year in order to contribute to a traditional IRA. There is no age limit to contribute to a Roth IRA.
2. You must have taxable compensation to contribute to an IRA. This includes income from wages and salaries and net self-employment income. It also includes tips, commissions, bonuses and alimony. If you’re married and file a joint return, generally only one spouse needs to have compensation.
3. You can contribute to an IRA at any time during the year. To count for 2013, you must make all contributions by the due date of your tax return. This does not include extensions. That means you usually must contribute by April 15, 2014. If you contribute between Jan. 1 and April 15, make sure your plan sponsor applies it to the right year.
4. In general, the most you can contribute to your IRA for 2013 is the smaller of either your taxable compensation for the year or $5,500. If you were age 50 or older at the end of 2013, the maximum you can contribute increases to $6,500.
5. You normally won’t pay income tax on funds in your traditional IRA until you start taking distributions from it. Qualified distributions from a Roth IRA are tax-free.
6. You may be able to deduct some or all of your contributions to your traditional IRA. Use the worksheets in the Form 1040A or Form 1040instructions to figure the amount that you can deduct. You may claim the deduction on either form. Unlike a traditional IRA, you can’t deduct contributions to a Roth IRA.
7. If you contribute to an IRA you may also qualify for the Saver’s Credit. The credit can reduce your taxes up to $2,000 if you file a joint return. Use Form 8880, Credit for Qualified Retirement Savings Contributions, to claim the credit. You can file Form 1040A or 1040 to claim the Saver’s Credit.
8. See Publication 590, Individual Retirement Arrangements, for more about IRAs.
Always consult your tax professional for your individual situation.
