presented by :
CHANTELLE BENTLEY
MODULE 3: TAX PREPARATION
PROCESS
The Tax Preparation Process
Tax preparation is the core of what we do as professionals.
It’s more than entering numbers — it’s understanding your client’s story,
ensuring compliance, and maximizing refunds.
Definition:
Tax preparation is the process of collecting financial information,
calculating income and deductions, and accurately filing a client’s return
with the IRS.
Steps in Preparing a Return
The tax preparation process involves five main steps
1️⃣ Collect Client Information – Gather W-2s, 1099s, IDs, and personal info.
2️⃣ Organize Documents – Separate income, deductions, and credits.
3️⃣ Input Data into Tax Software – Use professional software for calculations.
4️⃣ Review for Accuracy – Double-check numbers, forms, and signatures.
5️⃣ E-File and Confirm Submission – Send the return securely to the IRS.
Income Shifting Techniques
Income shifting helps reduce your total tax by legally
directing some of your earnings to others in lower tax
brackets, such as family members. This chapter
outlines simple strategies like paying a child for
legitimate work or using a basic trust structure to
split income.
Reviewing Client Documents
Client documents provide the proof and details needed to complete a
return accurately.
Documents to Review:
✅ W-2 – Employee wages and withholdings
✅ 1099-NEC – Self-employment income
✅ 1098-T – Education expenses
✅ ID & SSN verification
✅ Receipts for deductions (childcare, donations, mileage)
Reviewing Client Documents
Example:
If a client reports $30,000 in self-employment income, confirm their
1099s match that total and they’ve kept records of related expenses.
Tips:
✔️ Always double-check SSNs and spellings.
✔️ Compare totals from all income forms.
✔️ Keep copies or scans of key documents.
Using Professional Tax Software
Tax software is your primary tool for calculating, organizing, and
filing tax returns efficiently and accurately.
Professional tax software allows you to:
✔️Enter client data securely
✔️Automatically calculate totals and credits
✔️Generate IRS-approved forms (1040, Schedule C, etc.)
✔️E-file returns directly from the platform
Using Professional Tax Software
Example:
A client earns $50,000 as an employee and $10,000 from freelance
work. The software calculates total income, standard deduction, and
taxes owed or refunded automatically.
Tips:
💡 Learn keyboard shortcuts and navigation for efficiency.
💡 Use built-in error-check features.
💡 Never skip software updates — they include IRS rule changes.
Checking for Accuracy Before Filing
Accuracy review ensures the return is correct, complete, and
compliant before submission.
What to Check:
✅ All names, SSNs, and addresses match client IDs
✅ All income forms (W-2s, 1099s) are entered correctly
✅ All deductions and credits are supported by documentation
✅ Refund or balance due is verified
✅ Client has reviewed and signed Form 8879 (E-file authorization)
Tips:
✔️ Use a checklist for every client.
✔️ Review with a “fresh set of eyes” — step away, then recheck.
✔️ Ask a colleague or mentor to double-review complex cases.
The Electronic Filing (E-File) Process
Electronic filing (E-file) is the IRS-approved method
of submitting tax returns digitally. It’s faster, safer,
and more efficient than paper filing.
E-File Steps:
1️⃣ Prepare and review the return.
2️⃣ Have client sign Form 8879.
3️⃣ Transmit the return through your ERO software.
4️⃣ Wait for IRS acknowledgment (Accepted or Rejected).
5️⃣ If rejected, correct errors and resubmit.
The Electronic Filing (E-File) Process
Example:
A client’s return gets rejected due to an
incorrect SSN. Correct it in the software and
resubmit — no need to redo the entire return.
Tips:
✅ Always wait for IRS confirmation before closing a case.
✅ Keep all acknowledgment receipts in client files.
✅ Protect client data with passwords and encryption.
Key Takeaways
✅ Tax preparation follows a step-by-step process — precision matters.
✅ Review documents carefully and use software effectively.
✅ Always double-check accuracy before filing.
✅ E-filing is the safest, fastest way to get clients their refunds.
When you prepare with care, you build trust — and success follows.
thank you
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