Certified Public Accountants



By Rick Torkelson, CPA and principal of Torkelson & Associates, LLP in Petaluma, CA

Another year gone and taxes are upon us again.  What do you need to gather to prepare or to have your individual tax return prepared?  I always look at January as the eye of the hurricane – the tax return can be filed, but nobody has any final information to move forward.  January is the time to get organized and avoid the panic in April.

The first thing is to designate a “tax place”.  This could be a file with “2014 Taxes” written on it, in a convenient place.  Every tax document you get for 2014 goes in here.  This is where you put your W-2, your 1099s, the 1098 for your mortgage interest, your property tax bills and your K-1’s.  If you pay estimated taxes, put a schedule of each estimate you paid for each state and federal along with each date paid.  If you refinanced, bought or sold a house, put a copy of your closing statement(s) in here – not the whole package from the escrow company, just the closing statement.  Include your year-end brokerage statement too – and if it gets revised, draw a line through the original just to remind you not to look at it.  Put your “Goodwill” receipts here all year long for the stuff you drop off at the local charity – you might even open a 2015 tax file for those receipts for the new year.  A copy of last year’s tax return might go here for a reference.  The organizer from your tax preparer and a list of any questions and you’re ready to go.

It’s very important that ALL 1099s and W-2s – what I call the “government issue” is included in the file because this is what the government knows about your return and this is the stuff that better get on your return or you get a happy little computer notice from the IRS.  If you happen to get one of these notices, don’t ignore it because you know it’s wrong.  The IRS computer doesn’t know it’s wrong and soon you will get another letter and a limited time to deal with it.

Affordable Care Act (Obama Care)

2014 is the first year that Obama Care will hit the tax return.  If the taxpayer, spouse, and all dependents were covered by a qualified health insurance plan all year, you check a box on line 61 of your 1040.  If everyone was not covered all year, you will need to fill out the new form 8965.  The purpose of this new form 8965 is to compute the penalty (euphemistically called the “Shared Responsibility Payment”) unless you meet one of the exceptions for the lack of coverage.  Penalties for 2014 will be relatively low, but by the 2016 return the penalty for not being covered can be about as high as the cost of the insurance to get coverage.

The “Covered California” website is www.coveredca.com.  There is open enrollment until 2/15/15.  Like it or not, probably best to seek coverage.


If you are a taxpayer that pays estimated taxes – Your last estimate for 2014 would be due 1/15/15 – and remember that estimate is for 2014 even though due on 1/15/15.

© 2020 Torkelson & Associates CPAs, LLP.