Corporate Tax Preparation Checklist

Pull the EIN letter (CP 575) or last year's return cover sheet and verify the legal name matches what the IRS has on file. Mismatches between the return and IRS records are a top cause of e-file rejects (R0000-901). Capture any DBAs that need to appear on state returns.

Confirm the entity type from the Form 2553 / 8832 election on file. C-Corps file 1120 (Apr 15), S-Corps file 1120-S (Mar 15), partnerships file 1065 (Mar 15). A late S-election is the most common discovery at this step — flag it before assuming pass-through treatment.

Roll the prior return forward in UltraTax / Lacerte / ProConnect. Confirm NOL carryforwards, Section 163(j) interest carryforwards, charitable contribution carryforwards, AMT credit, and Section 179 carryforwards all carried correctly. Reconcile to the prior preparer's workpapers if this is a first-year engagement.

Issue the document request list through Suralink, TaxDome, or SmartVault — not email attachments (WISP / IRS Pub 4557). Standard items: TB, GL detail, bank/credit-card statements, fixed-asset additions and disposals, loan amortization schedules, payroll registers, Form 941s, sales-tax returns, and merchant-processor 1099-Ks.

Import the working trial balance into Caseware or CCH Engagement and tie net income to the client's issued financial statements to the penny. Any variance is an unposted AJE — chase it down before starting M-1 work.

Confirm year-end balances tie to bank statements with no stale uncleared items older than 30 days. Stale checks > 90 days old should be reviewed for escheatment or reversal — preparing a return on top of an unreconciled cash account creates AJEs that show up in IRS audit.

Walk through every standard M-1 line: 50% meals limitation, non-deductible penalties and fines, club dues, life insurance premiums (officer), tax-exempt interest, federal income tax expense. Corporations with > $10M in assets file Schedule M-3 instead — confirm threshold before choosing the form.

Reconcile fixed-asset additions and disposals to the GL. Compute current-year MACRS depreciation, bonus depreciation (60% for 2024 placed-in-service, phasing down), and Section 179 election. Watch the Section 179 taxable-income limit — excess carries forward but doesn't reduce current-year tax.

Sum four quarters of Form 941 Box 2 (wages) and reconcile to W-3 totals and the GL wages account. Differences typically come from accrued wages at year-end, fringe benefits booked in GL but not on payroll, or 401(k) deferrals classified inconsistently. Document the reconciliation — IRS routinely matches these.

Required when total receipts hit $500K. For S-Corps, confirm officer comp is reasonable relative to distributions — disproportionately low officer wages with heavy distributions is the #1 S-Corp audit trigger. Document the reasonable-comp analysis (RCReports, comparable-survey data).

Apply the 50% meals limitation; entertainment is fully nondeductible post-TCJA. For company autos, confirm personal-use add-back to W-2 Box 1 was processed by payroll. Mileage logs supporting business-use percentage should exist for any vehicle deduction.

Walk through the four-part test (permitted purpose, technical uncertainty, process of experimentation, technological in nature). Software development, product engineering, and manufacturing process improvements commonly qualify. If qualifying activities exist, plan to file Form 6765 and the new Section G project-detail disclosures.

Post-TCJA, all R&E expenditures must be capitalized and amortized over 5 years (domestic) or 15 years (foreign) — no current-year deduction. Identify the Section 174 buckets, prepare the Form 4562 amortization schedule, and document the methodology in the workpaper. Software development is included.

Post-2017 NOLs are limited to 80% of taxable income and carry forward indefinitely (no carryback). Pre-2018 NOLs retain old rules. Track the vintages separately on the carryforward schedule — mixing them is a common audit finding.

Form 7203 (S-Corp) is required when shareholders take distributions, claim losses, or dispose of stock. Update stock basis and debt basis separately. Distributions exceeding stock basis are taxable as capital gain — surfacing this at the return level (rather than at the shareholder's 1040) avoids late surprises.

Pull the IRS account transcript or EFTPS history and tie each Q1-Q4 estimate to the GL prepaid-tax account. Mis-applied payments (wrong year, wrong EIN) are common — easier to fix before filing than after.

Pull a 50-state revenue summary and identify economic-nexus states (Wayfair thresholds vary; many at $100K). For pass-throughs, evaluate PTET election state-by-state — the SALT-cap workaround saves federal tax but the election deadlines and mechanics differ wildly (NY, CA, NJ, IL each different).

Extension extends the filing deadline 6 months but does NOT extend payment. Estimate the tax liability and have the client wire the balance with the 7004 — under-extension penalties are 0.5%/month plus interest. Confirm with the partner whether to extend before the original deadline.

E-file 7004 through the tax software and confirm IRS acceptance the same day. Direct-debit the estimated balance or have client wire via EFTPS. Save the acceptance acknowledgment in the engagement folder.

Partner ties every line of the return to a tickmarked workpaper, reviews the M-1, signs off the depreciation roll-forward, and clears every open review note. Circular 230 §10.34 due-diligence documentation lives here — partner review is the firm's defense if a position is later challenged.

Send the signature-ready return through TaxDome or DocuSign with Form 8879-CORP / 8879-S / 8879-PE. Do NOT e-file before the signed 8879 is back — IRS rules require the signed authorization in hand before transmission. Retain for 3 years.

Transmit through the tax software and watch for the IRS acceptance ack (typically within 24-48 hours). If rejected, identify the reject code, fix, and re-transmit within the 10-day perfection window so the original filing date holds. Archive the ack, the DCN, and the final PDF in the permanent file.