SIOUX CITY | Randall Kramer has a few clients who come to his office packing a shoe box filled with paper receipts. Others bring nothing but their 1099 or W-2 forms.
Kramer probes the latter group, asking how many work miles they put on their cars and how much they spent on food and entertainment while on the job.
"I just try and pull all these pieces out of them," he said. "I maintain that those who don't keep good records, they lose more deductions than they think they're going to get."
Kramer, a certified public accountant and owner of Kramer & Associates LLC, 4300 S. Lakeport St., strongly urges people to start preparing for tax season the year before. So, on Jan. 1, 2016, he recommends setting aside a file in which to store receipts relating to charitable contributions, health care costs and other expenses that are tax deductible. Also put you tax forms in there and mark the folder or envelope "important tax document enclosed."
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"That way at the end of the year you're not scrambling all over the place looking for information," Kramer said.
You could create a spreadsheet of your charitable deductions on your home computer or try one of the many budget and finance apps available.
Free apps like iSpending and Pocket Expense, which can be downloaded in the iTunes store, allow you to keep an electronic record of expenses.
"You have your entire world on your telephone. If you're going that route, by all means back it up," Kramer cautioned. "Be careful if you're storing it all electronically.
As tax season approaches, Kramer said a lot of tax prepares will send their clients a tax organizer. He said it's a good idea at least to look at the organizer, which might appear intimidating to complete. That way they'll notice any major life changes that may have taken place in the last year.
"Don't assume that the tax preparer knows that you added a member to your family. I've had that happen a few times," Kramer said. "Somehow another child comes up and all of a sudden it's like, 'We didn't have that child last year.' So we have to amend the return."
Kramer said day care expenses are sometimes overlooked. In order to receive a child and dependent care tax credit, income tax filers need their provider's name, address and social security number, as well as how much they paid the provider.
Another form to look out for this year, Kramer said, is form 1095, which became mandatory in the 2015 tax year. The tax forms were introduced as a result of the Affordable Care Act. The forms are 1095-A, 1095-B and 1095-C. People who don't have health insurance have to pay a penalty.
"The 1095 will tell us how much they paid for health insurance and if they had health insurance all 12 months of the year," he said. "That's how they determine if you get hit with a penalty."
Once you have all your information and forms in order, it's time to make an appointment with your accountant. Kramer said you shouldn't do that until the first week of February, but be sure to schedule the appointment before the first week in April. The deadline for filing federal income tax returns is April 18.
Kramer said both spouses should be involved in the tax preparation process. He's seen too many lose a husband or wife and not know what's going with their finances.
"I have some spouses that just come to the appointment to at least know who I am and what the conversation is. I really like that," he said.
Kramer said people should always look at their tax returns after they receive it from their preparer. He said most just want to sign it and leave.
"I think people should look at their tax preparers as an adviser more so than somebody who just puts the numbers on the form," he said.
