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Preparing to file
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January 9, 2002: 10:41 a.m. ET
There are several things you can do while waiting for tax information.
By Gary Klott
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CHICAGO (Tribune Media) - Even if you're eager to file your 2001 income tax return in order to get hold of your refund check, it may not be possible just yet. Although 2001 tax forms have already been published and mailed, most people will have to wait a few more weeks for some critical information they'll need to fill out their 2001 returns.
Employers, banks, brokers and other financial institutions generally have until Jan. 31 to provide employees and customers with W-2s, Form 1099s, and other year-end tax statements.
While you're waiting, there are some important steps you can take so that you're ready to file once you receive your W-2s and 1099s. Even if you're not in a hurry to file, be aware that there are some paperwork matters that require attention long before you file your return.
Estimated tax deadline
Of most immediate concern is the Jan. 15 deadline for self-employed workers and other individuals who need to make an estimated tax payment to the IRS for the fourth quarter of 2001.
Most employees don't need to worry about making quarterly estimated tax payments since they fulfill their obligation to pay tax on income as it's earned during the year through withholding at work. But employees who didn't have enough tax withheld from their paychecks in 2001 should consider making an estimated tax payment by Jan. 15 in order to minimize IRS underpayment penalties on their 2001 return.
Likely candidates include employees who cashed in large stock market gains last year. A common reason employees get hit with IRS penalties for underwithholding is that they neglect to take their capital gains and other investment income into account when figuring how much tax to withhold.
Check W-2s, 1099s
When your W-2s, 1099s and other year-end tax statements arrive in the mail, don't just set them aside. Check to make sure the figures are accurate.
The reason you want to check them now is that if there is an error, you'll need to contact the issuer and have them send you a corrected version before you file your return. Getting the issuer to fix a mistake is critical. If you simply insert the amount you believe to be correct on your return without getting a corrected W-2 or 1099 from the issuer, you'll likely hear back from the IRS.
Click here for CNN/Money's tax center
That's because employers and financial institutions send the IRS a copy of your year-end tax statements. IRS computers then use the information to verify the amounts reported on your tax return to ensure you didn't understate your income or inflate your deductible expenses. If the amount you report on your return doesn't match the amount reported on the W-2 or 1099 sent by your employer or financial institution, you can expect to receive a discrepancy notice from the IRS.
Charitable letters
Another matter that requires attention long before you file your return is substantiation for large charitable donations. This paperwork requirement is likely to be a concern for many more taxpayers this year given the record level of donations made to disaster relief organizations in the wake of the Sept.11 terrorist attacks.
If you made a charitable gift of $250 or more last year, you'll need to obtain a written acknowledgment from the charity before you file your return. The statement must verify the amount of your contribution and disclose whether you received any benefits in exchange for your contribution. Most charities now automatically send the required letters to donors who made a gift of $250 or more.
But if you don't receive one, you'll need to contact the charity and get one. While the letter doesn't get filed with your return, you need to have the statement in your possession by the time you file your return. If you don't, and you later get audited, the IRS can automatically disallow your charitable deduction for the gift. Volunteer workers also need a substantiation letter in order to deduct an unreimbursed expense of $250 or more.
So if you were among the many volunteers who traveled from out of town to help with the disaster relief efforts, you'll need a statement from the relief organization in order to deduct a plane ticket costing $250 or more. The statement needs to describe the types of services you performed for the charity and disclose whether you received any goods or services in return for your volunteer services.
Social security numbers
If you don't have a Social Security number for a member of your household, this is the time to apply for an ID at your local Social Security Administration office. You'll need to list on your tax return the Social Security number of yourself, your spouse and every dependent, including infants born on or before Dec. 31, 2001.
If you changed your name for some reason, such as marriage or divorce, update the information with the Social Security Administration before you file your tax return. If a name listed on your tax return doesn't match Social Security Administration records, the IRS may delay issuing your refund check and disallow the personal exemption for that individual. 
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