It’s a pretty unsexy blog title as they go, but hey, we get the question often enough that it seemed like it would make sense to answer it! Give the people what they want, am I right?

For any new client (business or personal) we always ask for a copy of last year’s tax returns for a few very good and equally important reasons. And in no particular order, they are: 

To see that they were filed

We want to make sure that the return was actually prepared and filed. And if not, we want to make sure that both YOU and WE know about it. Because the worst thing is to get another year or two down the road, get a nasty letter from the IRS, and then be wondering whether that was a mess you came in with or whether we were involved… We don’t want that kind of confusion and neither do our clients! So we ask to get eyeballs on it and make sure the thing exists.

To review the return for obvious errors

We don’t reconstruct the return by comparing every 1099 and W2 to the numbers on your 1040. (Unless you want us to, but that costs as much as preparing the tax return because the only way to do that is to literally reconstruct the return and compare the results.)

But we’ll always give it a cursory review to see if anything pops out and you’d be surprised how many times we catch things that needed to be done differently. Claiming dependents, missing K1s, estimated payments not reflected, home office deductions… if we can see a change needed to be made, we’ll let you know the impact of the change and you can decide whether you’d like us to prepare that amendment for you.

To check for Carryovers

There are occasionally items that carry over from one year to the next and if we didn’t prepare your return last year, we might not know that those things exist. Whether it’s suspended home office deductions, passive losses that are bottled up, or capital loss carryforwards, we want to make sure we “roll in” those carryover amounts so you don’t lose track of the items you might be leaving behind.

To check for completeness

This is maybe the least obvious reason, but the most impactful in our experience. We ask new clients to complete a questionnaire answering typical background questions about themselves and their “tax situation” and then upload all the relevant documents for the prior year. But you’ve all been in this spot, right? You think you’ve given your CPA everything related to last year… and then another 1099 shows up in your mailbox. When we review a client’s prior return, we’re making a note of all the components and making sure that they either;

1) show up in the current year’s info, or

2) that there’s a good reason why they don’t.

This increases our accuracy significantly and cuts down on the time and stress of having to amend returns in the future when “surprise” items show up late. We’re team #nosurprises over here!

So keep a copy of those returns handy, and be ready to share them with us when we get started on your first return with Revel!

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