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Bob
Parrish CPA, P.C. HOME
(941) 387-0926 ~ It Is:
Introduction
Objectives
Your Questions
What You Will Need
Warning
Intro Summary
Related Information
*PREPARE
FOR ADVISER
Entrance Interview
From Your Other Business, or Financial Records
From Corporation or Organization Records (meetings, etc.)
*PREPARE YOURSELF
Action
Checklist - What To Do
PRINT ALL THE REQUIRED DOCUMENTS
OBTAIN THE STANDARD WORKPAPER FORMS NEEDED
pro1040 and Consulting OnLine are ©
Checklist Template
Preface ~ Client Letter - What this idea is about ~ Introduction ~
Dear Client:
Usefulness General Benefits 7 Objectives: Type in this area an introduction to this topic. State what it is about, state whether this is an introduction, beginner level, imd or advanced. State whether any special knowledge is required - for example, law, mathematical, management, knowledge of a specific industry, etc.
TOPEngagement Status Letter ~ WARNING!
You have not engaged Bob Parrish CPA PC, Bob Parrish CPA, pro1040, Consulting on line, any related parties, or the ISP to perform any services for you or offer you advice. This entire site is for educational or informational purposes only. The materials are not opinions, advise, legal advice on any matter and have not been tailored to specific jurisdictions, individuals, other entities, or circumstances. You are not to use the forms, concepts, strategies, or knowledge without assistance from a professional. You must update and validate this information yourself with your own research, experience and the advice of a competent professional adviser in your jurisdiction. The author, the corporation, the ISP, Bob Parrish CPA, Bob Parrish CPA, P.C. or other parties related to those or this site do not guarantee or warrantee in any manner the suitability, usefulness, accuracy, timeliness, or results of any portions of this site, nor the links contained in this site which link to other areas. At times, information is taken from other sources and is believed to be accurate, but no verification or confirmation is performed. Furthermore, if any federal or state law invalidates a portion of this disclaimer, the other portions still apply. In addition, any allegations or actions are restricted to arbitration only and must be arbitrated by the Better Business Bureau in Sarasota Florida. Reading of these pages constitutes complete acceptance and agreement with all disclaimer provisions on all pages of this site. ....... Wednesday, February 21, 2007 01:33 PM
Bob Parrish CPA:
License Jurisdictions —
CPA: LA, FL, TX
Insurance: FL
Securities: LA, FL, TX
Registered Representative with & Securities offered through InterSecurities, Inc. 101 Chardin Drive Nokomis FL 34275 (941/918-8266); Member NASD, SIPC and Registered Investment Adviser
Summary
| Poor old Sue Started a set of books anew without reading these lines few and now Sue is in a Stew |
Related Information
-
A few closely related topics & pages From Bob Parrish CPA PC (left-click this to expand it):
Prepare for Your Adviser CPA or Attorney (or inform yourself about this topic)
PREPARE
FOR ADVISER
Entrance Interview
From Your Other Business, or Financial Records
From Corporation or Organization Records (meetings, etc.)
PRINT ALL THE REQUIRED DOCUMENTS
OBTAIN THE STANDARD WORKPAPER FORMS NEEDED
OBTAIN THE DOCUMENTS FOR THIS JOB
About the Preparation Procedures
If you have decided this task must be done, the first procedure is to be certain you have all the facts important to this topic. So that you may know the value, to you personally, of this topic you must have facts of your circumstances. So that you may comply with applicable rules, you must have all the facts. Factual research is time consuming and if not performed wisely will be very expensive if not performed properly, and thoroughly. IF you decide to make this a do-it-yourself project you should seek the advice of a professional qualified in your jurisdiction to assist you with defining important information and then to overview the information you have gathered.
What to gather - an Organizer and Prepare for your CPA, Attorney or Financial Adviser
GENERAL SETUP & STARTUP
Entrance Interview ~ 1040 Entrance Interview ~ OVERVIEW & BECOME FAMILIAR WITH THE ENTRANCE INTERVIEW FORM
Alien Residency Status Testing
Consider the applicability or tax reduction by using elections ~ 1040 Elections
OBTAIN THE ORGANIZER AND BE CERTAIN ALL INFORMATION IS AVAILABLE
1040 Organizer Fed Only Dec 2000; 1040 Organizer w-California Dec 2000
1040 Organizer incl Florida Dec 2000; 1040 Organizer w-Louisiana Dec 2000
1040 Organizer w-Maryland Dec 2000
OBTAIN OR PRINT FORMS AND DOCUMENTS NEEDED
STARTING - FIRST THINGS FIRST, OBTAIN WHAT YOU NEED
OBTAIN AND SORT THE INFORMATION ~ place the documents behind the organizer section
From Your Other Business, or Financial Records
From Corporation Records or Organization Records (meetings, etc.)
OBTAIN THE STANDARD WORKPAPER FOLDER SETUP
OBTAIN THE STANDARD PRESENTATION LAYOUT - private files
OBTAIN THE STANDARD WORKPAPER FORMS NEEDED
OBTAIN THE DOCUMENTS FOR THIS JOB
PLACE BLANK FORMS IN THE CORRECT SEQUENCE
GENERAL & FOR ALL JOBS
Instructions for finalizing and completion - for example instructions for the mailing of forms to the IRS
Actions Checklist
Report Cover Letter
Required Documents and attachments
PRESENTATION STANDARDS - private files
Start of Preparing For You CPA Section
Prepare Yourself - Become Knowledgeable About Forms, Checklists, Etc.
INFORM
YOURSELF
Action
Checklist - What To Do
How to do this - What to Do: Seek assistance from Bob Parrish, as requirements change from time to time and circumstance to circumstance.
DETAILED STEPS ~ TAX ORGANIZERS ~ 1040 Request For Documents
OVERVIEW THE LIST OF INFORMATION AND CLIENT OR BUSINESS RECORDS NEEDED
Use the entrance interview sheet to assist with the tolls and documents neededIf not already done, place all the documents behind each organizer section
C. PERSONAL DATA ~ 1040 Personal Data
Tax Payments & Refunds
Do you desire the Direct Deposit of Refunds?Record of this year tax paymentsHow do you want to apply any refund?
1. Overview and update basic information such as-
a. Address _____ _____ ____ _____
b. Dependents _____ _____ ____ _____
c. Carryover from last year _____ _____ ____ _____
2. Consider a signed engagement letter _____ _____ ____ _____
3. Obtain any information any IRS audits or correspondence _____ _____ ____ _____
4. Check for carryover or carryback items _____ _____ ____ _____
a. Net operating loss _____ _____ ____ _____
b. Capital loss _____ _____ ____ _____
c. Investment credit _____ _____ ____ _____
d. Alternative minimum tax credit _____ _____ ____ _____
e. Foreign tax credit _____ _____ ____ _____
f. Child care credit _____ _____ ____ _____
g. Charitable contributions _____ _____ ____ _____
h. Installment sales _____ _____ ____ _____
i. Retirement plan contributions _____ _____ ____ _____
j. Passive activity losses and credits _____ _____ ____ _____
k. Suspended losses/credits due to at risk limitations _____ _____ ____ _____
l. S corporation and partnership basis limitations _____ _____ ____ _____
m. Publicly traded partnership losses _____ _____ ____ _____
n. Change of accounting adjustments ( 481). _____ _____ ____ _____
o. Home office deductions (IRS Notice 93-12) _____ _____ ____ _____
p. 179 carryovers _____ _____ ____ _____
q. Investment interest expense carryover _____ _____ ____ _____
r. Home mortgage points for amortization _____ _____ ____ _____
s. Nontaxable or reinvested dividends and original issue discounts _____ _____ ____ _____
t. Deadline for replacing personal residence sold in a prior year and for involuntary
conversions. _____ _____ ____ _____
u. Percentage depletion carryover. _____ _____ ____ _____
v. Carryover of 1231 losses Year Amount Year 5 __________ __________ Year
4 __________ __________ Year 3 __________ __________ Year 2 __________ __________
Year 1 __________ __________ _____ _____ ____ _____
w. Prior year overpayments carried over. _____ _____ ____ _____
x. Estimated tax payments made for the current year: 1 _________________ 2 _________________
3 _________________ 4 _________________ _____ _____ ____ _____
y. Deferral of 1993 payments to 1994, 1995, 1996. _____ _____ ____ _____
5. Determine that accounting methods used are comparable to the preceding yr _____ _____ ____ _____
6. If accrual method note the economic performance election _____ _____ ____ _____
7. Check organizer for accuracy _____ _____ ____ _____
D. Tax Preparation
1. W2 INCOME
a. All w2 income is included on the return, w/h and ss _____ _____ ____ _____
2. RETIREMENT INCOME
a. Social Security benefits
(1) Be certain the full amount has been entered _____ _____ ____ _____
(2) The health insurance portion is to be shown on Sch A as a deduction from income _____ _____ ____ _____
(3) Discover whether any benefits are having to be repaid _____ _____ ____ _____
(4) Social Security is not taxable except for the following conditions -- watch carefully
for them
(a) Certain non-taxable revenue bonds _____ _____ ____ _____
(b) Whenever combined income exceeds the limits listed in the current tax laws - this
changes periodically so be aware of current conditions _____ _____ ____ _____
3. INTEREST INCOME See also 1040 Request For Documents &
a. Be sure to disclose exempt interest on state and municipal bonds on the federal return. _____ _____ ____ _____
b. Determine if any exempt interest is subject to alternative minimum tax. _____ _____ ____ _____
c. Consider whether to exclude interest from US securities and US Treasury mutual funds from
the state income tax return. _____ _____ ____ _____
d. Consider whether municipal bond interest excluded on the federal return should be added
back to state return. _____ _____ ____ _____
e. Compare sources of interest (& dividend) income with prior year items. Identity of payer
and amount should agree with 1099. Include TIN of interest received from seller provided
financing. _____ _____ ____ _____
f. Consider whether any of the interest income was "purchased".
1040 Bond Amortization _____ _____ ____ _____
g. Consider whether there is any early withdrawal penalty. _____ _____ ____ _____
h. Consider whether any income tax withheld. _____ _____ ____ _____
i. Installment Sale Interest Income - be certain to obtain all the 1098's for each of the
installment sales.
(1) address - name - ssno - orig loan, %, date, nbr payments, boy bal _____ _____ ____ _____
(2) address - name - ssno - orig loan, %, date, nbr payments, boy bal _____ _____ ____ _____
(3) address - name - ssno - orig loan, %, date, nbr payments, boy bal _____ _____ ____ _____
(4) address - name - ssno - orig loan, %, date, nbr payments, boy bal _____ _____ ____ _____
j. Closely Held Business Interest Income
(1) Corp nbr 1 _____ _____ ____ _____
k. Nominee Interest To Deduct
(1) _________________________ _____ _____ ____ _____
(2) _________________________ _____ _____ ____ _____
(3) ________________________________________________ _____ _____ ____ _____
l. Other Interest Received From Individuals
(1) Person 1 _____ _____ ____ _____
m. Banks and Financial Institutions
(1) U.S. Treasury - income tax refund interest _____ _____ ____ _____
(2) Bank - checking account _____ _____ ____ _____
(3) Bank - savings account _____ _____ ____ _____
n. Tax Exempt Interest Income
(1) UIT Income _____ _____ ____ _____
(2) Mutual Fund Income _____ _____ ____ _____
o. U.S. Savings Bonds - election to include and income when cashed
(1) US EE Bonds _____ _____ ____ _____
p. Other interest such as:
(1) Interest on a shared or joint interest income for a taxpayer not filing on this return.
A 1099 nominee will need to be filed and the proper information for the shared interest
income will need to be on the 1040. _____ _____ ____ _____
(2) Ascertain whether any minor dependent has interest income and whether the parent
desires to include that income on this return. _____ _____ ____ _____
4. DIVIDEND INCOME ~ See Also 1040 Request For Documents
a. Mutual funds
(1) Continental Mutual Fund _____ _____ ____ _____
b. Pass through entities
(1) Partnerships
(a) _________________________ _____ _____ ____ _____
(2) Sub S Corp
(a) Sub S 1 _____ _____ ____ _____
(3) Trusts and Estates Including grantor trusts, other trusts and income in year of
termination
(a) Trust 1 _____ _____ ____ _____
c. Securities owned directly
(1) Stock 1 _____ _____ ____ _____
5. Self Employment Income
The following forms will assist you with this project:
Obtain the financial report, and general ledger from the bookkeeping. Reprint as necessary
after any changes or adjustments.
a. Self employment - Occupation:_____________
(1) Overview the general ledger - note whether there may be missing deductions. _____ _____ ____ _____
(2) Enter the information on the appropriate form as prescribed by the IRS. _____ _____ ____ _____
(3) Watch the "drawing" accounts for possible business deductions --
(a) Dues _____ _____ ____ _____
(b) Entertaining _____ _____ ____ _____
(c) Professional dues and licenses _____ _____ ____ _____
(d) Professional insurance _____ _____ ____ _____
(e) Estimated tax payment to apply _____ _____ ____ _____
(4) Where this office does not help or offer any services maintaining records:
(a) Obtain all 1099's enter on 1040 and compare to 1040 _____ _____ ____ _____
(b) Obtain sales tax return and compare to the 1040 gross. Be certain the sales tax
collected is not included in the gross sales -- if it is, then either remove from
gross sales on the 1040 or show as an expense on the 1040. _____ _____ ____ _____
(c) Update depreciation schedules and note payable schedules. Use the prescribed in house
form where advantageous. Consider whether any promissory notes need to be renewed,
revised or updated. _____ _____ ____ _____
(d) If on the accrual basis:
I. Accounts receivable balance, trade, employee, other _____ _____ ____ _____
II. Inventory - at cost and based upon physical count _____ _____ ____ _____
III. Trade accounts payable _____ _____ ____ _____
IV. Sales taxes payable _____ _____ ____ _____
(e) Payroll taxes and payroll:
I. Payroll taxes payable _____ _____ ____ _____
[A] 940 _____ _____ ____ _____
[B] 941's _____ _____ ____ _____
[C] TEC's _____ _____ ____ _____
[D] Amounts paid after the end of the current year, but shown as a deduction on the
tax returns at end of year. _____ _____ ____ _____
II. Accrued payroll expense and accrued related liabilities for taxes. _____ _____ ____ _____
III. Accrued vacation pay if it is permissible - see IRC _____ _____ ____ _____
(f) Expenses:
I. If the client wants to do the recordkeeping, then furnish an organizer to the
client and help with the items the client is not experienced with. _____ _____ ____ _____
II. If we are to obtain the totals:
[A] Consider loans used to pay expenses _____ _____ ____ _____
[B] Consider credit card balances not paid in full for business expenses - will need a
statement showing the balance and have client help make an analysis of the
character of the unpaid balance of each card. _____ _____ ____ _____
[C] Obtain the business bank statements -
Deposits - scan for income and non-income items, compare to other information such
as invoices or sales tax reports.
Checks - use a computerized trial balance, NewViews, or sort checks by expense
category depending upon what seems to be the fastest and best method for getting
totals by category.
_____ _____ ____ _____
[D] There may be business expenses in the personal checking account - get checks or
make a request to have someone go through the personal checks looking for tax
deductions. _____ _____ ____ _____
(5) For the sch C items - whether we have done bookkeeping, obtained totals, or the client
has prepared totals and/or an organizer; print an input sheet and/or the sch C, compare
to the worksheets (f/s - t/b - organizer or whatever was used to post from). Compare
the totals on the worksheets to the totals on the tax form or input form {C1, C2,
etc.}. _____ _____ ____ _____
(6) Print the tax depreciation detail and match the asset totals to the balance sheet. _____ _____ ____ _____
b. Self employment - Sch C #1
(1) Overview the general ledger - note whether there may be missing deductions. _____ _____ ____ _____
(2) Enter the information on the appropriate form as prescribed by the IRS. _____ _____ ____ _____
(3) Watch the "drawing" accounts for possible business deductions --
(a) Dues _____ _____ ____ _____
(b) Entertaining _____ _____ ____ _____
(c) Professional dues and licenses _____ _____ ____ _____
(d) Professional insurance _____ _____ ____ _____
(e) Estimated tax payment to apply _____ _____ ____ _____
(4) Where this office does not help or offer any services maintaining records:
(a) Obtain all 1099's enter on 1040 and compare to 1040 _____ _____ ____ _____
(b) Obtain sales tax return and compare to the 1040 gross. Be certain the sales tax
collected is not included in the gross sales -- if it is, then either remove from
gross sales on the 1040 or show as an expense on the 1040. _____ _____ ____ _____
(c) Update depreciation schedules and note payable schedules. Use the prescribed in house
form where advantageous. Consider whether any promissory notes need to be renewed,
revised or updated. _____ _____ ____ _____
(d) If on the accrual basis:
I. Accounts receivable balance, trade, employee, other _____ _____ ____ _____
II. Inventory - at cost and based upon physical count _____ _____ ____ _____
III. Trade accounts payable _____ _____ ____ _____
IV. Sales taxes payable _____ _____ ____ _____
(e) Payroll taxes and payroll:
I. Payroll taxes payable _____ _____ ____ _____
[A] 940 _____ _____ ____ _____
[B] 941's _____ _____ ____ _____
[C] State Unemployment Tax _____ _____ ____ _____
[D] Amounts paid after the end of the current year, but shown as a deduction on the
tax returns at end of year. _____ _____ ____ _____
II. Accrued payroll expense and accrued related liabilities for taxes. _____ _____ ____ _____
III. Accrued vacation pay if it is permissible - see IRC _____ _____ ____ _____
(f) Expenses:
I. If the client wants to do the recordkeeping, then furnish an organizer to the
client and help with the items the client is not experienced with. _____ _____ ____ _____
II. If we are to obtain the totals:
[A] Consider loans used to pay expenses _____ _____ ____ _____
[B] Consider credit card balances not paid in full for business expenses - will need a
statement showing the balance and have client help make an analysis of the
character of the unpaid balance of each card. _____ _____ ____ _____
[C] Obtain the business bank statements -
Deposits - scan for income and non-income items, compare to other information such
as invoices or sales tax reports.
Checks - use a computerized trial balance, NewViews, or sort checks by expense
category depending upon what seems to be the fastest and best method for getting
totals by category.
_____ _____ ____ _____
[D] There may be business expenses in the personal checking account - get checks or
make a request to have someone go through the personal checks looking for tax
deductions. _____ _____ ____ _____
(5) For the sch C items - whether we have done bookkeeping, obtained totals, or the client
has prepared totals and/or an organizer; print an input sheet and/or the sch C, compare
to the worksheets (f/s - t/b - organizer or whatever was used to post from). Compare
the totals on the worksheets to the totals on the tax form or input form {C1, C2,
etc.}. _____ _____ ____ _____
(6) Print the tax depreciation detail and match the asset totals to the balance sheet. _____ _____ ____ _____
6. HORSE BREEDING AND RACING
a. Print the financial report for these items _____ _____ ____ _____
b. Enter the income and expenses on the IRS forms _____ _____ ____ _____
c. Compare any information which has been given to the IRS by others such as the tracks or
racing authorities, to know that information is going to match in the IRS computers. _____ _____ ____ _____
d. Print the tax depreciation detail and match the asset totals to the balance sheet. _____ _____ ____ _____
7. OTHER SELF EMPLOYMENT INCOME
a. Annual commission from _______________ _____ _____ ____ _____
8. CAPITAL GAINS AND LOSSES See Also Capital Loss Carryover Worksheet
1040 Securities Buy-Sell Organizer Packet
Shareholder Basis - S Corporation Excel (c)
Sample ledger for gathering Securities gain-loss info
Mutual Fund Accounting - Newest Version
Real Property Transactions - If You Receive a 1099-S
Some Useful Related Topics:
a. From pass throughs
(1) Partnerships
(a) Partnership 1 _____ _____ ____ _____
(2) Sub S
(a) Sub S 1 _____ _____ ____ _____
(3) Trusts and estates
(a) Trust 1 _____ _____ ____ _____
b. Co-owned property
(1) Property 1 _____ _____ ____ _____
c. Sales of property -
(1) Sale 1 _____ _____ ____ _____
d. Installment sales See section M. Section M is where the checklist procedures are for the installment sale recording. The section M will provide the procedures to prepare the input forms [D4] for the accumulation and distribution of the amounts to the appropriate IRS forms. Use this section I-4 for a reminder and a check to observe the amounts were in fact properly spread to the appropriate forms - Sch D; 4797; etc.
(1) _______ _____ _____ ____ _____
(2) _______ _____ _____ ____ _____
(3) _______ _____ _____ ____ _____
(4) _______ _____ _____ ____ _____
(5) ___________________________________ _____ _____ ____ _____
1040 Home Sale Organizer
1040 Home Improvements Organizer
9. RENTAL PROPERTY
Related Help Topics:
a. Commercial rental property
(1) Vacant Land - address____; Sch E entity #__
(a) Income _____ _____ ____ _____
(b) Expenses
I. Insurance _____ _____ ____ _____
II. Interest paid _____ _____ ____ _____
III. Property taxes _____ _____ ____ _____
IV. Repairs _____ _____ ____ _____
V. Commissions or mgt. fees paid. _____ _____ ____ _____
VI. Lease costs _____ _____ ____ _____
(c) Print the tax depreciation detail and match the asset totals to the balance sheet. _____ _____ ____ _____
b. Residential rental property
(1) Residential building - shared between ________ and _________; _____________; Sch
E entity 1
New Views is the software for the accounting. Some years an Excel spreadsheet is used
to report the ___% sharing between _________ and ____________.
(a) Income _____ _____ ____ _____
(b) Expenses:
I. Insurance _____ _____ ____ _____
II. Property taxes _____ _____ ____ _____
III. Repairs _____ _____ ____ _____
IV. Commissions or mgt. fees paid. _____ _____ ____ _____
V. Misc. _____ _____ ____ _____
VI. Professional _____ _____ ____ _____
VII. Advertising _____ _____ ____ _____
VIII. Condo fee _____ _____ ____ _____
IX. Utilities _____ _____ ____ _____
X. Bank charges _____ _____ ____ _____
XI. Outside services _____ _____ ____ _____
(2) Residential building - address ____; Sch E entity 3
(a) Income _____ _____ ____ _____
(b) Expenses:
I. Insurance _____ _____ ____ _____
II. Property taxes _____ _____ ____ _____
III. Repairs _____ _____ ____ _____
IV. Commissions or mgt. fees paid. _____ _____ ____ _____
V. Misc. _____ _____ ____ _____
VI. Professional _____ _____ ____ _____
VII. Advertising _____ _____ ____ _____
VIII. Condo fee _____ _____ ____ _____
(3) Print the tax depreciation detail and match the asset totals to the balance sheet. _____ _____ ____ _____
10. OIL AND GAS INCOME
Self-employed "Packet" - 1040 Self-employed Packet
Knowledge About the Industry - Oil & Gas Industry IRS Study
a. For each of the following consider that actual receipt of some of the income may be in a
year other than reported on the 1099. If an amount is large, consider the reporting based
upon receipt and in relation to potential tax brackets (the new tax law). _____ _____ ____ _____
b. For each of the following watch for expenses paid by the Dr. from checking accounts and
not reflected on the 1099. _____ _____ ____ _____
c. Be certain depletion is calculated on the mineral income properly.
d. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
e. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
f. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
g. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
h. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
i. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
j. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
k. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
l. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
m. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
n. Operator or Purchaser Name:
(1) Please circle - Royalty or Working Interest ------- ----------------
_____ _____ ____ _____
(2) Income _____ _____ ____ _____
(3) Expenses:
(a) Is this a marginal production or "stripper" well? _____ _____ ____ _____
(b) Production taxes shown on 1099 _____ _____ ____ _____
(c) Operating expenses shown on 1099 _____ _____ ____ _____
(d) Operating expenses paid for from checking and other sources not shown on the 1099 _____ _____ ____ _____
(e) Watch for write off or amortization of specific costs relating to oil and gas income _____ _____ ____ _____
o. Operator or Purchaser Name: _____ _____ ____ _____
p. Operator or Purchaser Name: _____ _____ ____ _____
q. Operator or Purchaser Name: _____ _____ ____ _____
r. Operator or Purchaser Name: _____ _____ ____ _____
s. Operator or Purchaser Name: _____ _____ ____ _____
t. Operator or Purchaser Name: _____ _____ ____ _____
u. Operator or Purchaser Name: _____ _____ ____ _____
v. Operator or Purchaser Name: _____ _____ ____ _____
w. Operator or Purchaser Name: _____ _____ ____ _____
x. Operator or Purchaser Name: _____ _____ ____ _____
y. Operator or Purchaser Name: _____ _____ ____ _____
z. Operator or Purchaser Name: _____ _____ ____ _____
aa. Operator or Purchaser Name: _____ _____ ____ _____
bb. Operator or Purchaser Name: _____ _____ ____ _____
cc. Operator or Purchaser Name: _____ _____ ____ _____
dd. Operator or Purchaser Name: _____ _____ ____ _____
11. PARTNERSHIPS
The following are various items to assist with this item
a. For all partnerships:
(1) If the tax return has data already posted to the input sheets, print the input sheets
to use for determining whether all the K1 information has been placed into the computer
appropriately. _____ _____ ____ _____
(2) Overview current K1's to find if there are questionable items. _____ _____ ____ _____
(3) If a technical termination has occurred, consider a 732(d) election. _____ _____ ____ _____
(4) Determine if there are passive activities _____ _____ ____ _____
(5) If there are distributions of property other than cash _____ _____ ____ _____
(6) If there are contributions of property other than cash _____ _____ ____ _____
(7) If there are contributions of services _____ _____ ____ _____
(8) If there are exchanges of property such as inventory, accounts receivable and/or other
property that would be classified as ___________ property. _____ _____ ____ _____
(9) Keep up to date the outside basis worksheet _____ _____ ____ _____
(10) Keep up to date the at risk work sheet _____ _____ ____ _____
(11) Watch for optional basis adjustment possibilities - if the inside basis and outside
basis amounts __________________ _____ _____ ____ _____
(12) If there is any forgiveness of debt passed through, then consider the net worth of the
partner - if it is negative, then forgiveness of debt may not be income at the partner
level. _____ _____ ____ _____
b. Partnership name: _____ _____ ____ _____
c. Partnership name: _____ _____ ____ _____
d. Partnership name: _____ _____ ____ _____
e. Partnership name: _____ _____ ____ _____
f. Partnership name: _____ _____ ____ _____
g. Partnership name: _____ _____ ____ _____
h. Partnership name: _____ _____ ____ _____
i. Partnership name: _____ _____ ____ _____
j. Do any basis limitations apply such as 465; 704(d); 1366(d) _____ _____ ____ _____
S Corporations
Income From Estates or Trusts
12. INSTALLMENT SALES
a. Determine that the full amount of depreciation recapture is reported in the year of sale
whether or not payment was received in that year. _____ _____ ____ _____
b. Determine that adequate stated interest on debt - if less than required, then make the
computations required by IRC _____ _____ ____ _____
c. If the taxpayer is a dealer of the underlying property of the installment sale:
(1) Except for farm property, certain timeshare rights and residential lots (where there is
an election) do not use the installment sale method. _____ _____ ____ _____
(2) Determine that the interest owed as a result of an election (a) above is properly
reported.
d. Consider the special rules for installment reporting by certain non-dealers of real (post
1986 sales) or personal property (post 1988 sales) where the sales price exceeds $150,000
( 453A).
(1) Compute the interest charge imposed on outstanding tax deferred installment obligations
if the face amount of these obligations that arose during, and are still outstanding at
the close of, the tax year exceeds $5 million. _____ _____ ____ _____
(2) Determine that the proper amount is treated as a collection on any pledged obligation. _____ _____ ____ _____
e. Consider whether it would be appropriate to elect out of the installment method.
f. Individual sales _____ _____ ____ _____
(1) ___________________________ _____ _____ ____ _____
(a) Principle _____ _____ ____ _____
(b) Interest _____ _____ ____ _____
(2) ___________________________ _____ _____ ____ _____
(a) Principle _____ _____ ____ _____
(b) Interest _____ _____ ____ _____
(3) ___________________________ _____ _____ ____ _____
(a) Principle _____ _____ ____ _____
(b) Interest _____ _____ ____ _____
(4) ___________________________ _____ _____ ____ _____
(a) Principle _____ _____ ____ _____
(b) Interest _____ _____ ____ _____
g. Sales through the partnerships _____ _____ ____ _____
h. Any depreciation recapture must be in yr of sale _____ _____ ____ _____
i. Overview for adequate stated interest on debt. _____ _____ ____ _____
j. If the taxpayer is a dealer:
(1) Determine the installment method is not used after 12/87
k. If the sales is real or personal property over $150,000 (453A) applies _____ _____ ____ _____
l. Other installment sales -- this current year
_________________________
_________________________
_________________________ _____ _____ ____ _____
Farm & Ranch -
The following forms will assist you with this project:
1. Rental operations
a. Income
b. Expenses
c. Depreciation schedule
2. Self employment operations
a. Income
b. Expenses
c. Depreciation schedule
3. Print the tax depreciation detail and match the asset totals to the balance sheet. _____ _____ ____ _____
4. Were any assets from these activities sold?
a. Obtain "Equipment & Loan Information" sheet
Retirement Income
1040 Retirement Income Organizers
Foreign Income Exclusion
5. OTHER INCOME POINTS TO CONSIDER:
1040 Misc Income Organizer
1040 Foreign Income Exclusion
a. Exempt interest income -- some might be subject to AMT _____ _____ ____ _____
b. Alimony paid or received _____ _____ ____ _____
c. Sales or other dispositions of property _____ _____ ____ _____
d. Annuities _____ _____ ____ _____
e. IRA or pension distributions _____ _____ ____ _____
f. Discharge of indebtedness _____ _____ ____ _____
g. Abandonment of property or investment interests including partnerships, and sub-s corp. _____ _____ ____ _____
h. Income from estates or trusts _____ _____ ____ _____
Adjustments to Income
1040 Adjustments to Income
6. GIFTS AND OTHER TRANSFERS
a. _____________ residential rental property _____ _____ ____ _____
b. ___________________________ _____ _____ ____ _____
c. Contracts for deed:
(1) ___________________________
NOTE - This was a contract made by John individually, NOT the corporation! _____ _____ ____ _____
(2) ___________________________
_____________ acres _____ _____ ____ _____
d. Partnership interests:
(1) ___________________________ % limited partnership interest _____ _____ ____ _____
(2) ___________________________ % partnership interest Ltd. _____ _____ ____ _____
(3) ____________________________ _____ _____ ____ _____
e. Promissory notes:
(1) Note - describe in full:
dated ___/___/___ _____ _____ ____ _____
(2) Note - describe in full:
dated ___/___/___ _____ _____ ____ _____
f. Other items not effecting the current yr are items of separate property, cash settlements,
household goods.
7. DEDUCTIONS:
1040 Itemized Deductions Packet
a. Home office 1040 Home Office Deduction Organizer _____ _____ ____ _____
Home Office Expense
b. IRA, Keogh etc. _____ _____ ____ _____
c. Worthless investments _____ _____ ____ _____
d. SE Health insur. _____ _____ ____ _____
e. Charity _____ _____ ____ _____
f. Amortizable items _____ _____ ____ _____
g. Medical _____ _____ ____ _____
h. Is a parent being cared for? Is a parent's nursing home cost being paid for? There may
be medical deductions available to the t/p. _____ _____ ____ _____
i. Taxes _____ _____ ____ _____
j. Casualty losses _____ _____ ____ _____
k. Vacation homes _____ _____ ____ _____
l. Obtain all checks from all personal accounts for the year. Observe each check to determine
whether any checks are for tax deductible items. Mark checks for questions. _____ _____ ____ _____
8. OTHER TAXES
a. ITC recapture _____ _____ ____ _____
b. Premature distributions _____ _____ ____ _____
c. Penalty for excess contributions or drawing from IRA etc. _____ _____ ____ _____
9. OTHER FORMS
a. 8271 and K1 attached _____ _____ ____ _____
b. Election to forego carryback _____ _____ ____ _____
c. Partner stepped up basis _____ _____ ____ _____
d. Section 1244 statement _____ _____ ____ _____
e. Consider need to disclose taxable income information on dependent's return _____ _____ ____ _____
f. Form 8814 to include child's income _____ _____ ____ _____
g. Inquire whether t/p has entertainment documentation _____ _____ ____ _____
h. State and local returns _____ _____ ____ _____
i. 1099 nominee forms, or other information returns t/p is required to file. _____ _____ ____ _____
j. Form 5500 _____ _____ ____ _____
k. Annual reporting to participants in plans. _____ _____ ____ _____
l. Gift tax return _____ _____ ____ _____
m. Estate tax return _____ _____ ____ _____
10. The papers and folders should be sorted as follows. This will create a packet to route
through the office for each person to use in the accomplishment of the duties.
a. Route Sheet _____ _____ ____ _____
b. Notes, questions, client notes, action sheets, etc. _____ _____ ____ _____
c. All items to be attached to the return or to be copied for the firm's files. _____ _____ ____ _____
d. Accountant's copy of the return _____ _____ ____ _____
e. Firm folder _____ _____ ____ _____
f. Client's information we do not need to copy and does not need to be attached to the
return.
Preparer's Overview - perform after preparation, and before passing to math-check or theory overview
-
Check name, address and SS #'s
-
Exemption for over 65
New or deleted dependents
children's income - is a return necessary?
Filing status
Attach information forms as needed - 1099, etc. ~ bind these with but separate from the return
Were gifts made during the year - is the gift tax return filed?
Check the cost basis of gifts made
IRA, SEP or other retirement plan contribution
Early distribution penalties or elect exceptions to the penalty
Roll over in 60 days or direct ttee to ttee
Death of participant
Disability
Separation from service after 55 (not for IRA's)
Part of series of periodic payments
After 59.5
Used for medical expenses
Used to pay health insurance premiums if unemployed
Higher education expenses
First time home buyer
Education benefits
Required minimum distributions?
Social Security received
Check amount of estimated tax payments
Proper election of application of overpayment
Deduction of tax planning and tax preparation
Child care expenses
Personal Credits
Dependent care
Child tax credit
Elderly or permanently disabled
Adoption credit
Foreign tax credit
AMT credit
Academy bond credit
Non-conventional fuel credit
Business tax credits
Energy credit
Rehab credit
Reforestation credit
Work opportunity credit - form 5884
Welfare to work credit - form 8850
Research and Experimentation credit form 6765
Contributions to specified Community Development corporations - form 8847
Low income housing credit 8586
Disabled Access credit 8826
Fuel used for nonhighway purposes - #4136
AMT - #8827
Foreign tax credit
Dependents
Add, delete, income, school, marriage, etc.
A schedule is attached to the return for each line with an amount on the 1040
Moving expenses?
Self-employment tax
S/E tax is include in subsequent year estimate
Carryovers and carrybacks
S Corp or Partnership basis or at risk amounts both prior yr and current year
Capital losses - unlimited c/o no c/b
NOL - c/b 2 yrs; c/o 20 yrs
AMT credit - unlimited c/o
Foreign tax credit - c/b 2 years, c/o 5 years
Charitable contributions
PAL's - unlimited
§1231 look back rule
§179 carryover - unlimited
Losses restricted because of the $25,000 limit, c/o is unlimited
Investment interest c/o - unlimited
Adoption credit - 5 year c/o
Home Office deduction - unlimited c/o
Credits
Recapture of depreciation
If the portfolio income volume is large enough to warrant the portfolio worksheet, prepare it or check
its preparation
Compare - line by line, last year tax return to this year return, use a separation Sch C comparason
Complete the following items:
Item Total Submitted by Client Canceled Checks Other Contributions - cash Contributions - property Interest expense Taxes Medical Casualty losses Other deductions Travel & Entertainment Carryovers & Carrybacks
Answer the following and prepare both a note on MCC and a paper copy to place in
a folder to be made for next year - items that will apply to next year:
| Yes | No | |
| Credits to be carried over | ||
| Net operating loss | ||
| Capital loss carryover | ||
| Contributions carryover | ||
| Installment sales | ||
| Nontaxable dividends | ||
| At risk losses c/o | ||
| PAL losses c/o | ||
| AMT tax credit c/o | ||
| Foreign tax credit c/o | ||
| §1231 lookback amounts | ||
| §179 c/o | ||
| Limited Rental loss c/o due to the $25,000 limit | ||
| Investment Interest | ||
| Adoption credit | ||
| Home office deduction c/o | ||
F. MATH CHECKER
-
1. Name and address on the return and schedules is spelled correctly and agrees with prior year or subsequent information _____ _____ ____ _____ -
2. ID# is the same in all instances and agrees with prior yr return _____ _____ ____ _____
-
Signed? SS#? ID #? address of preparer?
Is filing status correct?
-
3. Check all pages for ID# _____ _____ ____ _____
-
4. All questions and blocks on all forms have been properly answered or checked _____ _____ ____ _____
-
5. Match all amounts on return to supporting schedules and w/p's included w/ return. _____ _____ ____ _____
-
6. Know that all schedules included do show and match the amounts on the return. _____ _____ ____ _____
-
7. Foot all schedules _____ _____ ____ _____
-
8. Verify filing status and dependents _____ _____ ____ _____
-
9. Trace all totals carried from one line on the return and schedules to another line on return in order to know the accuracy. _____ _____ ____ _____ -
10. IS form 2210 needed? _____ _____ ____ _____
-
11. _____ _____ ____ _____
-
12. Form 5329 only t/p with name of plan. _____ _____ ____ _____
-
13. Check dates on the estimate and voucher & amounts. _____ _____ ____ _____
G. TAX ADVISER/CPA OVERVIEW
1. Obtain the bookkeeping computer files and print the needed reports in order to overview the
tax forms from the outside sources, the IRS forms, and the actual money received and paid by
the taxpayer per the bookkeeping.
a. Financial reports _____ _____ ____ _____
b. General ledger _____ _____ ____ _____
c. Journals _____ _____ ____ _____
2. W2
3. Interest and Dividend Income
4. Refunds
5. Alimony
6. Proprietorship - Sch C
a. Revenue from operations
b. Cost of sales
c. Other income
(1) Recapture of depreciation whenever business use drops below 50% for IRC 280F property.
(a) Compare Sch C, statement attached, 4797 and the depreciation detail for the prior
year.
I. Be certain that the prior year(s) have been correct for the business use %.
II. Be certain that the prior year was in fact 50% or more and that the depreciation
s/b recaptured
III. Watch any computed recapture of §179 deduction in prior years - affirm by
observation or computation that the §179 was in fact taken or used.
7. Capital gains and losses - Sch D
8. Other gains and losses - 4797
9. Oil and Gas Income
a. Oil and gas income - working interests (schedule C)
Compare the "Oil Income Statement", the "Organizer (with the 1099's)", and the IRS
prescribed form schedule C. These should all match. If there are discrepancies, prepare
a worksheet listing the deviations and consider whether there is significant variance to
warrant involving taxpayer's or office manager's/bookkeeper's time.
For each property match or check the following: The income is the same as shown on each of
the above sources ______________ The expenses of the above are all shown and deducted on
the return ________ Depletion is calculated and deducted, it can be 100% of the net
___________
(1) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(2) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(3) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(4) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(5) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(6) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(7) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(8) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(9) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(10) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(11) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(12) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(13) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(14) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(15) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(16) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(17) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(18) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(19) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(20) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(21) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(22) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(23) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(24) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(25) Valence Operating _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(26) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
(27) Property Name:______ _____ _____ ____ _____
(a) Organizer, 1099, bookkeeping, and applicable tax form -- the income is identical, or a
worksheet is prepared explaining the variance and whether it is significant to warrant
further investigation or changes. _____ _____ ____ _____
(b) Organizer, 1099 (if it shows expenses), bookkeeping, and the tax form, all expenses
should be on the tax forms. Watch especially the expenses paid by the taxpayer from
the checking accounts. _____ _____ ____ _____
(c) Apply depletion calculations - watch the depletion to see that the new law has been
applied. _____ _____ ____ _____
b. Oil and gas income - royalty interests (schedule C)
See the notes on the working interests
The income should be the same from all sources ____________________________ The expenses
from all source s/ deducted on the return ____________________ Depletion s/b deducted on
each property and can be 100% of the net ________
(1) Property Name:______ _____ _____ ____ _____
(2) Property Name:______ _____ _____ ____ _____
(3) Property Name:______ _____ _____ ____ _____
(4) Property Name:______ _____ _____ ____ _____
(5) Property Name:______ _____ _____ ____ _____
(6) Property Name:______ _____ _____ ____ _____
(7) Property Name:______ _____ _____ ____ _____
(8) Property Name:______ _____ _____ ____ _____
(9) Property Name:______ _____ _____ ____ _____
(10) Property Name:______ _____ _____ ____ _____
(11) Property Name:______ _____ _____ ____ _____
(12) Property Name:______ _____ _____ ____ _____
(13) Property Name:______ _____ _____ ____ _____
(14) Property Name:______ _____ _____ ____ _____
(15) Property Name:______ _____ _____ ____ _____
(16) Property Name:______ _____ _____ ____ _____
(17) Property Name:______ _____ _____ ____ _____
(18) Property Name:______ _____ _____ ____ _____
(19) Property Name:______ _____ _____ ____ _____
(20) Property Name:______ _____ _____ ____ _____
(21) Property Name:______ _____ _____ ____ _____
(22) Property Name:______ _____ _____ ____ _____
(23) Property Name:______ _____ _____ ____ _____
(24) Property Name:______ _____ _____ ____ _____
(25) Property Name:______ _____ _____ ____ _____
(26) Property Name:______ _____ _____ ____ _____
(27) Property Name:______ _____ _____ ____ _____
c. Oil and gas income - oil & gas schedules (schedules C and E supporting work papers)
(1) Property Name:______ _____ _____ ____ _____
(2) Property Name:______ _____ _____ ____ _____
(3) Property Name:______ _____ _____ ____ _____
(4) Property Name:______ _____ _____ ____ _____
(5) Property Name:______ _____ _____ ____ _____
(6) Property Name:______ _____ _____ ____ _____
(7) Property Name:______ _____ _____ ____ _____
(8) Property Name:______ _____ _____ ____ _____
(9) Property Name:______ _____ _____ ____ _____
(10) Property Name:______ _____ _____ ____ _____
(11) Property Name:______ _____ _____ ____ _____
(12) Property Name:______ _____ _____ ____ _____
(13) Property Name:______ _____ _____ ____ _____
(14) Property Name:______ _____ _____ ____ _____
(15) Property Name:______ _____ _____ ____ _____
(16) Property Name:______ _____ _____ ____ _____
(17) Property Name:______ _____ _____ ____ _____
(18) Property Name:______ _____ _____ ____ _____
(19) Property Name:______ _____ _____ ____ _____
(20) Property Name:______ _____ _____ ____ _____
(21) Property Name:______ _____ _____ ____ _____
(22) Property Name:______ _____ _____ ____ _____
(23) Property Name:______ _____ _____ ____ _____
(24) Property Name:______ _____ _____ ____ _____
(25) Property Name:______ _____ _____ ____ _____
(26) Property Name:______ _____ _____ ____ _____
(27) Property Name:______ _____ _____ ____ _____
10. Estimated tax forms for the new year
a. Estimate #1 April 15
(1) Make inquiries from appropriate source as to any significant changes _____ _____ ____ _____
(2) Base upon the prior year tax and accounting _____ _____ ____ _____
(3) Using the income tax spreadsheet make the projections for the new year
(a) Overview the spreadsheet for reasonableness of input and calculations _____ _____ ____ _____
(4) Where the information is available, use the current year books and annualize the data.
Place the annualized data into the BNA spreadsheet and compare for reasonableness.
Decide whether to use one of the projections or something between the two. _____ _____ ____ _____
(5) Copy and FAX the estimate to the taxpayer. _____ _____ ____ _____
b. Estimate #2 June 15
(1) Make inquiries from t/p or bookkeeper as to any significant changes _____ _____ ____ _____
(2) Base upon the prior year tax and accounting _____ _____ ____ _____
(3) Using the income tax spreadsheet make the projections for the new year
(a) Overview the spreadsheet for reasonableness of input and calculations _____ _____ ____ _____
(4) Where the information is available, use the current year books and annualize the data.
Place the annualized data into the BNA spreadsheet and compare for reasonableness.
Decide whether to use one of the projections or something between the two. _____ _____ ____ _____
(5) Copy and FAX the estimate to the Dr. _____ _____ ____ _____
c. Estimate #3 September 15
(1) Make inquiries from t/p as to any significant changes _____ _____ ____ _____
(2) Base upon the prior year tax and accounting _____ _____ ____ _____
(3) Using the income tax spreadsheet make the projections for the new year
(a) Overview the spreadsheet for reasonableness of input and calculations _____ _____ ____ _____
(4) Where the information is available, use the current year books and annualize the data.
Place the annualized data into the BNA spreadsheet and compare for reasonableness.
Decide whether to use one of the projections or something between the two. _____ _____ ____ _____
(5) Copy and FAX the estimate to the Dr. _____ _____ ____ _____
d. Estimate #4 January 15
(1) Make inquiries from T/P as to any significant changes _____ _____ ____ _____
(2) Base upon the prior year tax and accounting _____ _____ ____ _____
(3) Using the income tax spreadsheet make the projections for the new year
(a) Overview the spreadsheet for reasonableness of input and calculations _____ _____ ____ _____
(4) Where the information is available, use the current year books and annualize the data.
Place the annualized data into the BNA spreadsheet and compare for reasonableness.
Decide whether to use one of the projections or something between the two. _____ _____ ____ _____
(5) Copy and FAX the estimate to the Dr. _____ _____ ____ _____
H. TAX PLANNING AND INVESTMENT PLANNING NOTED FROM THE 1040:
1. If there is an address change -- life insurance, casualty insurance, etc. up to date. _____ _____ ____ _____
2. If social security is taxed, would tax free muni. bonds give an economic benefit? A
deferred annuity? _____ _____ ____ _____
3. If there is considerable interest -- should a retirement plan be considered? _____ _____ ____ _____
4. Should a personal budget form be furnished to the t/p to help set up an investment plan? _____ _____ ____ _____
5. Should a cash flow be prepared in order to find what amount of income is discretionary and
how much should be available for investing? _____ _____ ____ _____
6. How old are children? Should a college savings plan be started? _____ _____ ____ _____
I. ASSEMBLY
1. Copy items for firm files:
a. Anything sent to the IRS _____ _____ ____ _____
b. Anything proving the basis of an asset sold or purchased this year. _____ _____ ____ _____
c. High $ items _____ _____ ____ _____
d. Organizer _____ _____ ____ _____
e. Sheet pbc or calculating totals _____ _____ ____ _____
2. Stamp t/p copy _____ _____ ____ _____
3. Attach W2, W2-P, 1099R, or any other form showing income tax withheld. _____ _____ ____ _____
4. Obtain a total of the information forms sent to the IRS and compare to the return. _____ _____ ____ _____
5. Prepare IRS copy for mailing. _____ _____ ____ _____
6. Cut 1040es & prepare for client to mail _____ _____ ____ _____
7. Complete the firm's files
a. Permanent file _____ _____ ____ _____
b. Carryover file _____ _____ ____ _____
c. Tax return file _____ _____ ____ _____
8. Final --
a. Prepare envelop to IRS _____ _____ ____ _____
b. Be certain returns are signed _____ _____ ____ _____
c. Be certain letters are signed _____ _____ ____ _____
d. Financial planning questionnaire _____ _____ ____ _____
e. Business cards in folder _____ _____ ____ _____
f. Invoice is included _____ _____ ____ _____
g. Call client _____ _____ ____ _____
h. Release after t/p pays prep. fee. _____ _____ ____ _____
J. INVOICING AND MARKING JOB COMPLETE
1. Prepare invoice on Access and compare to the Lacerte and last year billing. _____ _____ ____ _____
DOING THE WORK
PRINT ALL THE REQUIRED DOCUMENTS OR MAKE COPIES AS NEEDED
DETERMINE THE CORRECT PRESENTATION STANDARD TO USE
ENGAGEMENT LETTER AND DISCLAIMER
PRESENTATION IN GENERAL
The presentation will nearly always be composed with the following sections:
Transmittal Letter (Consider a copy of the engagement letter and the prudence of an engagement letter for the closing of the engagement); WHAT THE ENGAGEMENT IS LIMITED TO ~ WHAT SERVICES WERE PERFORMED
Cost and Benefits Analysis ~ HOW THIS HELPS & BENEFITS
Proposal Analysis
Pertinent input (Organizer, employee census, etc.) and important assumptions
Computation Detail
Legal Analysis, & Citation of authorities
The written plan, timeline and actions required (to do list)
Standard Sections s/b integrated with the above:
Gov Filing Copy
Items to Mail
Bring Back for Next Year
Documents
Other
Permanent Records Folder
7 Year (Retention) Folder
Client Copy Current Year Tax Return
Special Reports
Prepared for --
You are responsible for
Estimated Taxes
About Your Tax Return
Your Copies
Information From You
Retain For 3 Years
4 WAY TEST APPLICATION
Is it the TRUTH
Is it FAIR
Will it build GOODWILL and BETTER FRIENDSHIPS
Will it be BENEFICIAL to all
Submit the finalized assembly for overview by the CPA in charge
OVERVIEW OF THE WORK by CPA in charge
BEFORE FINALIZING THE WORK PROCESS CONSIDER THE FOLLOWING
Compliance
Paying Bills or other events
The professional should perform functions the client does not have time for
The professional should perform necessary functions the client staff does not have training for
Reduce Costs
Reduce Risks
Setting Goals or objectives
Setting methods for monitoring
Setting dates, methods & procedures for follow-up
Setting guidelines for defining when variances from the guideline warrant policy or procedure changes
Identify the policies or procedures that need to be changed to accomplish the goal or objective
FINAL OVERVIEW BEFORE THE JOBS IS ENDED & CLOSED
LOOK AT THE ORIGINAL QUESTION - has it been answered, were more questions added?
THE ANSWER - limit the answer to a short paragraph of about 7 sentences. Did this solve the issue? The ANSWER is not considered the SOLUTION
THE SOLUTION - understand the objective or goal and restate it. Were the goals met? What might prevent obtaining the goals. Do the benefits outweigh the costs? Reduce Costs? Reduce Risks? Setting Goals or objectives:
Setting methods for monitoring
Setting dates, methods & procedures for follow-up
Setting guidelines for defining when variances from the guideline warrant policy or procedure changes
Identify the policies or procedures that need to be changed to accomplish the goal or objective. State Remedial Solutions and Preventive Solutions.
ACTIONS - checklist, calendar, columnar presentation showing separate columns for Client, CPA, Broker, Bookkeeper, Lawyer, Insurance Agent, etc.
COST v. BENEFITS ANALYSIS
PROPOSAL
FACTS DISCOVERED & USED
COMPUTATIONS & REPORTS
TECHNICAL ANALYSIS WITH CITATIONS AND AUTHORITY
FORMS - agreements, contracts, trusts, tax forms, financial reports, management information reports, policies or procedures
REQUIRED ATTACHMENTS
Overview - look at the steps required and the steps performed. Are there unusual items? Are there exceptions or adverse results of the procedures performed? Find resolutions for all unusual or adverse items.
Compliance - has compliance "substantially" been met. That is no "material" adverse results?
Math Check
Proof and spell check
Theory & overview by someone not performing the procedures
Close the case and archive it.
Index
Click on the text -- (a) to expand or collapse the outline if the text has no underline OR (b) to jump to the topic if the text has an underline
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Inform Yourself
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How To Do This
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Information Sources
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Introduction
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Procedures
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Tools
Contact Information
