What to Provide

  • Below is a high level overview of what information you may need to provide for your individual tax return

Income

  • Provide Form W-2 for your wage income.

  • Provide Form 1099-INT for bank accounts that generated $10 or more of interest income.

  • Brokerage providers (e.g. Vanguard) provide 1099 tax forms for interest, dividends, capital gains, etc.

  • Provide Form 1099-R if you had a retirement account withdrawal or rollover.

  • Provide Form SSA-1099 for any social security income received.

  • Provide Form 1099-SA for HSA distributions.

  • Sales of Employee Equity (in general)

    When you sell employee equity, the brokerage company (e.g. Morgan Stanley) will provide 1-2 tax statements:

    1. Form 1099: reports the sale per IRS rules but may not include accurate basis information

    2. Supplemental tax statement: In addition to the 1099, the brokerage company may provide a supplemental statement that provides additional tax basis information for employee equity.

      • The supplemental may be included in the same tax statement as the 1099, as a separate document, or not provided at all. However, most large companies do provide this statement if the tax basis information on the 1099 is not accurate.

    If the basis is not included in the Form 1099 or a supplemental tax statement, we may need additional documents to derive the basis.

    RSU’s

    • The income from vesting is reported on the paystub/W-2

    • Gain or loss on the sale of the stock is reported on the 1099 (see “Sales of Employee Equity” above)

    Employee Stock Purchase Plan

    • Provide Form 3922 for any shares received via ESPP

    • See “Sales of Employee Equity” above for sales of ESPP

    Incentive Stock Options (ISO’s)

    • Provide Form 3921 for any exercises of ISO’s

    • See “Sales of Employee Equity” above for sales of stock acquired via ISO’s

    Non-Qualified Stock Options (NQSO’s):

    • If you exercise non-qualified stock options (NQSO’s), the income from exercise will be included in your paystub/W-2.

    • See “Sales of Employee Equity” above for sales of stock acquired via NQSO’s

  • Provide Schedule K-1’s for any ownership interests in partnerships, S-Corps, multi-member LLC’s, etc.

  • If you receive unemployment, disability, or paid family leave income from the government, you will receive a Form 1099-G.

    For instructions on how to get the 1099-G in California, see: https://edd.ca.gov/en/disability/SDI_FAQ_for_1099G

  • For self-employment income, the two most common items we need are:

    1. Profit and Loss Statement (P&L): A P&L summarizes your income and expenses for the year by category (e.g. rent, professional fees, supplies, etc.)

    2. Form 1099’s from clients/payors (if applicable)

    Tip: Using a separate bank account and/or credit card for the business transactions generally makes it easier to compile the P&L since that way the business transactions are together in one place and not mixed with other transactions.

  • If you qualify for the home office deduction, we will need a summary of the applicable expenses.

    Home office expenses may include:

    • Utilities

    • Internet

    • Insurance

    • Cleaning

    • Rent

    • Maintenance affecting the office or whole home

    • Property taxes

    • Mortgage interest

  • For rental income, the two most common items we need are:

    1. Profit and Loss Statement(P&L): A P&L summarizes your income and expenses for the year.

    2. Form 1099’s for rental income (if applicable). Usually this only applies if you have a commercial tenant, management company, AirBnB, etc.

  • Cryptocurrency Sales

    We will need a report that provides the cost basis and proceeds for any sales. The cryptocurrency exchange you use might or might not provide this.

    If cost basis information is not provided by the exchange, it may be necessary to purchase crypto-specific tax software in order to properly report the income.

    While we do not recommend a specific software, some options include: Koinly, ZenLedger, and Cointracker.

    Purchases with Cryptocurrency (CAUTION)

    Note that under current tax law, any time an individual makes a purchase using cryptocurrency, the cryptocurrency is deemed to have been sold and the amount of capital gain must be reported on the individual’s income tax return.

    Cryptocurrency Transactions Subject to Tax

    In addition to purchases using cryptocurrency, other transactions that may be subject to tax include: selling cryptocurrency, airdrops, hard forks, mining or staking activities, etc.

    For more info, see: https://www.irs.gov/businesses/small-businesses-self-employed/digital-assets

Itemized Deductions

  • Provide Form 1098 Mortgage Interest Statement.

    The mortgage balances as of 12/31 may also be required if over the deductible limit.

    Note: Only loan amounts originally used to purchase the home are deductible as mortgage interest. If you used loan funds for multiple purposes, you may need to provide the amount that was specifically used for the purchase.

  • You can provide the amount of charitable donations in the annual tax questionnaire. You will need to provide:

    • Amount of charitable contributions

    • For stock donations, we will need the name of the stock, the number of shares, the date donated, and the recipient name. This may be provided on a donation receipt.

    • For Goodwill-type donations of furniture, clothes, appliances, etc. of $500 or more, we will need the the value of the goods donated; the name and address of the donee; and the date of the donation.

    • For a single non-cash donations of $5,000 or more, you will likely need an appraisal. Please contact us to discuss

    NOTE: In the rare event of an audit, the IRS will require receipts for all donations of $250 or more.

  • Amount of real estate taxes paid during the year (available on county website)

  • In California, vehicle license fees are tax deductible. To lookup the applicable amount, see:

    https://www.dmv.ca.gov/wasapp/FeeCalculatorWeb/vlfForm.do

    In other states a portion of the vehicle registration fees may also be deductible. Please provide the information with the tax questionnaire.

  • Only medical expenses over 7.5% of AGI are deductible.

    If you are unsure whether you would qualify to deduct medical expenses, you may choose to provide your tax information without the medical expenses and ask us to provide the threshold for deducting medical.

  • Investment interest expense includes interest from loans that are used to fund investments. These amounts may or may not be included on brokerage account tax forms. So be sure that amounts are properly included with your tax information.

    Note that there are strict interest tracing rules such that you need to be able to clearly show the loan proceeds were used for investing.

Credits and Other Items

  • You will need to provide the dates and amounts of any estimated tax payments

  • If you have a dependent child under age 13 you may be able to claim a tax credit for childcare. Note:

    • In order to qualify for the credit both spouses (if married) must have been employed or looking for work when the childcare was provided.

    • Note that the following expenses DO NOT qualify for the credit: 1. overnight camps 2. tuition for kindergarten and above

    Information to provide:

    1. Name of child care provider

    2. Provider's Address

    3. Provider's Tax ID

    4. Amount paid

    5. Which child the payment was for

  • If you made home improvements that saved energy or produced clean energy, you may qualify for a tax credit. Examples include: solar panels, solar powered batteries, heat pumps, energy efficient windows, doors, insulation, etc.

    If you made a qualifying purchase, provide a description of the purchase and the amount paid.

    For more, see: https://www.energystar.gov/about/federal-tax-credits

  • If you have foreign bank or financial accounts, you may need to report information for them.

    We may be able to get the information we need from the annual tax questionnaire or we may need additional information. If you have any questions on what to provide, do not hesitate to reach out.