• Prepare W2s/W3's (Do you/they have all employee addresses and ID numbers?)
• 1099's (Do you/they have all supplier addresses and ID numbers?)
• Is an IC, but should be an Employee?
• Do they qualify as Statutory Employees? (benefit from amended return?)
• Sales Tax Returns
• Household Employees
• ES payments
• Make or change SCorp Election
• Wants to Incorporate in January
• Did you remember to file corp/ptrship dissolution (or only final return)?
• Fiscal year
• Set up Biz Plan (sec 105 plan)
• Set up family payroll
• Required to make electronic (EFTPS) payroll tax payments
• Open IRA
• Open KEOGH before 12/31?
• Need to amend prior year returns (errors or changes in file)
• Open Medical Savings Account
• Qualifies for FICA TAX Tip Credit (retroactive to 1994)
• Owns Rental Real Estate Make note about Sec 179 no longer applies
• Qualifies to deduct unused deprec (Rev Proc 9631)
• Entitled to Educational Credits
• Missing TIN (dependent, employees, independent contractors)
• Resident/Nonresident Issues
• Subject to Backup withholding
• Out of State forms Needed (common states + add your own) [see NAEA directory for addresses]:
  • California_New York_New Jersey_Pennsylvania
  • Illinois
  • Florida
  • Washington DC needs Virginia Maryland

Unfortunately, this may require buying additional cabinets to hold them all.

Another use for all this information is to build some tickler files. I like to keep set of the following files in my desk drawer:

• All clients that require quarterly returns with a checklist showing when the returns were done.
• All clients that have fiscal years, in order of due date
• All clients that have calendar year corporations they are due a month earlier than individuals
• All clients with partnerships their extensions end a month earlier than individuals
• All clients for whom we do regular bookkeeping checklist when each month is complete

Other things to order/create and do you have all the (red) forms you need?

1. W2's/ W3's b) 1099's:
   Int
   Misc
   OID
   
2. Out of State Forms
3. BizPlan Agreements (Sec 105 agreements)
4. SS5's (fill them out for your client's to ensure they get to keep their dependents)
5. Extra toner cartridges for copier and fax machines (you always run out just when)
6. Extra typewriter ribbons and eraser ribbons
7. Cases and cases of paper
8. Envelopes for everything (if not using preprinted ones) Note using window envelopes whenever possible reduces errors and typing/printing labels
9. Updated Engagement letter be sure to include
   1. What you are hired to do (prepare 1999 returns, audit representation, remove levy)
   2. What you will charge for each action (bookkeeping rates, consulting rates, etc.)
   3. What problems you anticipate (warnings, notes about items they are missing, CYA)
   4. What you expect to accomplish (goals)
   5. What client is expected to provide
10. Fee Schedule be sure you enter it into your tax software.
11. List of important IRS and State contact numbers, fax numbers and Telefile numbers

You give your clients organizers. Make sure that you have them complete all the answers to that checklist questionnaire they usually ignore. If not, at least get the following information from them AND have them sign the bottom of this checklist in your presence and keep it in the file. Send it out with the organizer. If they do not return it, taking the time to do it during the interview will save you much aggravation later.

Be sure that any missing information is provided to you in writing. They can fax it, email it, mail it or drop it off. But if they write it themselves, you'll never have to

1. wonder where you came up with that number or
2. have a misunderstanding when they say, "I never told you that!"

Things to ask your client:
Have each client, new and old, sign a blank IRS and State power of attorney. If they balk, explain that it is only for tax purposes and they can cancel it anytime they chose. However, if they give it to you now, you can use it to take care of any IRS/State correspondence or problem quickly and easily. Even when they're out of town.

Also, if they are new clients, get a copy of the last two years' returns. It's amazing how sometimes something drops off between years that belongs on the current year's return. (Rollover of residence sale).

Although your software provider no doubt provides a checklist of questions, I've provided my own list for you. Sometimes, it's nice to be able to hand this to your client, in person, and have then check it off in your presence and you can watch them SIGN IT!

What a concept cover yourself to avoid any liability for not having asked these questions. Please feel free to use this in your office:

CLIENT CHECKLIST PLEASE FILL OUT AND SIGN BELOW

Dear Client, we want to be sure to do the best job possible for you. So please take a moment to review your organizer or last year's tax return and be sure you provide the following information:

• Are all the names spelled correctly?
• Is each Social Security number correct (if possible, please enclose
• copy of each card)
• Are the dependents still correct (new baby, got married, not fulltime student, moved out)
• Please provide date of birth for each person (if you're smart, you will also use this to send them personalized birthday cards each year.)
• Did you get married last year (or are you engaged now)?
• Did you get divorced (or are you separated now)?
• Do you help support a parent? (possible dependent)
• Is this the mailing address you want on the tax returns or will you be moving soon?
• If you sold securities this year, please provide purchase date and costs (please attach list)
• Did you have a bankruptcy or foreclosure this year?
• Did you pay household employees $1,100 + this year (includes maid, babysitter, kid who mows the lawn and washes your car)
• Did you pay into your IRA/SEP? Do you plan to?
• Did you pay into your KEOGH? Do you plan to (until extension ends)
• Did you make ES payments? If possible, please provide copies of all canceled checks.
• Did you pay any prior year state (deductible) taxes?
• Do you have any gambling winnings (include casinos, tracks, lotteries)
• Did you use airline miles for personal use?
• Did you get rebates or interest credits from use of credit cards?
• Did your boss reimburse you for mileage? Is it included in the W2 or in a separate check?
• Do you get paid for equipment rental (entertainment industry)? (ditto)
• Did you get any insurance settlements?
• Did you collect unemployment?
• Did you collect State Disability?
• Get any money as gifts from family?
• Give any gifts of $10,000 or more?
• Anything else that comes to mind?

I will not hold my tax professional liable for any omissions on my part. And I understand that if the returns are completed and then I remember additional things, I will be responsible for paying for revised or amended returns.

Print Name Print Name

Date Date

Sign Name Sign Name

Have you had enough of checklists yet? Well, there are more. Next month, I'll give you a batch to help you prepare your tax returns with fewer errors AND minimize your clients' taxes.

Come on back now, y'hear?

Return to Start Getting Ready for Tax Season Now (Part One)

First published on Oct. 25, 1999.