4 Reasons to Review Your Tax Return

Do you or someone from your accounting team review the tax return each year?

Your tax return preparer expects you to and with good reason.  In the flurry of tax season, numbers get inverted.  Sometimes an extra zero or two gets added.  And beyond being a second set of eyes for errors, you and your staff know your business much more intimately than your tax preparer.  Did they misunderstand some data you provided?

Top 4 Reasons to Review Your Tax Return

1.  Compare your accounting data to the tax return to locate process changes:

What was reported differently on the return?

Are there things about your accounting system that you could change to save time for your preparer?

Are the numbers different?  If so, why?

2. Helps remind you to enter Journal Entries and Depreciation:

What journal entries did the tax preparer provide?  If none, ask for them.

If there are more than a couple journal entries, what needs to change so adjustments do not need to be made at tax time?

Ensure the depreciation expense is entered in your accounting system

Ask for the current year projected depreciation so you can write off 1/12 each month.

3. A great time to do a Fixed Assets Review:

Ask for the detailed depreciation schedule.

Review it for accuracy.  Are there assets on the books that you disposed of or sold years ago?

Keep a copy of the schedule on hand to note assets that are disposed of or sold in the current year.

4. Save time during next tax season by Locking the Period:

Did you lock the period after providing information to your preparer?

If not, users may have added or removed transactions from the prior year.

Are the numbers on the tax return different than what you have in your accounting system now?

If so, locate what has been changed, change it back as of 12/31 and then make the necessary change as of 1/1.

Then ensure you lock the books so changes cannot be made.