Tax Information

Necessary Documents to Maintain:

• Photocopies of Driver’s Licenses or State IDs
• Social Security Cards
• Verification of Residency for dependents eligible for EIC

Income Documentation:

• Employment income: W-2 forms for both you and your spouse
• Investment earnings—assorted 1099 forms (-INT, -DIV, -B, etc.), K-1s, stock option details
• State and local income tax refunds and/or unemployment compensations: 1099-G forms
• Received taxable alimony
• Business or farming income—profit and loss statements, details on capital equipment
• Home business usage—dimensions of home and office, home and office-related expenses
• Distributions from IRAs/pensions—1099-R forms, 8606 forms
• Income/expenses from rental properties—profit and loss statements, information on suspended rental property losses
• Social Security payments—SSA-1099 forms
• Property sales income—initial cost, improvement costs, escrow closing statement, debt cancellation data (1099-C form)
• Information on previous year’s installment sales—6252 forms, principle and interest gathered during the year, SSN and payer address
• Miscellaneous income sources—jury duty, gambling winnings, Medical Savings Account (MSA) contributions, scholarships, etc.

Additional Tax Documents:

• IRA contributions
• Energy credits
• Student loan interest deductions
• MSA contributions
• Relocation expenses (applicable only before 2018)
• Premiums for self-employed health insurance
• Contributions to Keogh, SEP, SIMPLE, and other
• self-employed pension plans
• Deductible alimony payments
• Educator expenses
• Payments towards state and local income taxes
• Real estate taxes paid
• Personal property taxes, including vehicle license fees based on value
• Estimated tax payments made during the year, any refund from the previous year applied to the current year, and any amounts paid with filing extensions.
• Direct Deposit Details:
• Routing and account numbers for direct deposit
• Information on Foreign Bank Accounts:
• Location, bank name, account number, and highest value during the year

Tax Deduction Documentation:

• Advanced Child Tax Credit payments
• Childcare expenditures—provider’s details (name, address, tax ID) and total amount paid
• Educational expenses—1098-T forms, other related expenses
• Adoption-related expenses—SSN of the adopted child and associated legal, medical, and transportation costs
• Home mortgage interest and points paid—1098 forms
• Investment interest expenses
• Contributions to charities—monetary amounts, value of donated items, mileage for charitable activities, and other out-of-pocket expenses
• Casualty and theft losses—total damages, insurance settlements
• Various other deductible expenses—union dues, unreimbursed employee costs (uniforms, supplies, seminars, continuing education, publications, travel, etc.)
• Medical and dental expenditures

This checklist ensures you are thoroughly prepared for your business tax consultation in the USA, equipping you with all the necessary documentation for a comprehensive review of your financial standing.

Current rates information provided by Tax Foundation

2023 Tax Brackets Income Tax Brackets and Rates

The tax year 2023 adjustments described below generally apply to tax returns filed in 2024.

The tax items for tax year 2023 of greatest interest to most taxpayers include the following dollar amounts:

• The standard deduction for married couples filing jointly for tax year 2023 rises to $27,700 up $1,800 from the prior year.
• For single taxpayers and married individuals filing separately, the standard deduction rises to $13,850 for 2023, up $900.
• For heads of households, the standard deduction will be $20,800 for tax year 2023, up $1,400.
• Marginal Rates: For tax year 2023, the top tax rate remains 37% for individual single taxpayers with incomes greater than $578,125 ($693,750 for married couples filing jointly).The other rates are:
  • 35% for incomes over $231,250 ($462,500 for married couples filing jointly);
  • 32% for incomes over $182,100 ($364,200 for married couples filing jointly);
  • 24% for incomes over $95,375 ($190,750 for married couples filing jointly);
  • 22% for incomes over $44,725 ($89,450 for married couples filing jointly);
  • 12% for incomes over $11,000 ($22,000 for married couples filing jointly).

Table 1. In 2023, the income limits for all tax brackets and all filers will be adjusted for inflation and will be as follows:

Standard Deduction and Personal Exemption

The standard deduction will increase by $900 for single filers and by $1,800 for joint filers.

The personal exanption for 2023 remains at $0 (eliminating the personal exemption was part of the Tax Cuts and Jobs Act of 2017 (TCJA).

Table 2. 2023 Standard Deduction.

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) was created in the 1960s to prevent high-income taxpayers from avoiding the individual income tax.

This parallel tax income system requires high-income taxpayers to calculate their tax bill twice: once under the ordinary income tax system and again under the AMT.

The taxpayer then needs to pay the higher of the two.

The AMT uses an alternative definition of taxable income called Alternative Minimum Taxable Income (AMTI).

To prevent low- and middle-income taxpayers from being subject to the AMT, taxpayers are allowed to exempt a significant amount of their income from AMTI.

However, this exemption phases out for high-income taxpayers.

The AMT is levied at two rates: 26 percent and 28 percent (Table 3).

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Table 3. 2023 Alternative Minimum Tax Exemptions

In 2023, the 28 percent AMT rate applies to excess AMTI of $220,700 for all taxpayers ($110,350 for married couples filing separate returns).

AMT exemptions phase out at 25 cents per dollar earned once AMTI reaches $578,150 for single filers and $1,156,300 for married taxpayers filing jointly.

Table 4.  2023 Alternative Minimum Tax Exemptions – Phaseout Thresholds

Business Documents To Keep For One Year

• Correspondence with Customers and Vendors
• Duplicate Deposit Slips
• Purchase Orders (other than Purchasing Department copy)
• Receiving Sheets
• Requisitions
• Stenographer’s Notebooks
• Stockroom Withdrawal Forms

Personal Documents To Keep For One Year

• Bank Statements
• Paycheck Stubs (reconcile with W-2)
• Canceled checks
• Monthly and quarterly mutual fund and retirement contribution statements (reconcile with year end statement)

Business Documents To Keep For Three Years

• Employee Personnel Records (after termination)
• Employment Applications
• Expired Insurance Policies
• General Correspondence
• Internal Audit Reports
• Internal Reports
• Petty Cash Vouchers
• Physical Inventory Tags
• Savings Bond Registration Records of Employees
• Time Cards For Hourly Employees