Individual Tax Return Preparation Checklist

Use the firm's standard 1040 engagement letter — scope limited to current-year individual return, fee structure stated, no implied representation for prior-year audits or amended returns. Scope creep during tax season is the most common realization-killer; if the client asks for additional work, issue a change order rather than absorbing the hours.

Do not begin substantive prep work until the letter is countersigned and the retainer has cleared. Attach the executed copy to the client's TaxDome folder.

Roll forward NOLs, capital-loss carryovers, suspended passive losses, AMT credit, and Form 8606 nondeductible IRA basis. Missed carryovers are a frequent amended-return trigger — verify each schedule ties to the prior-year filed return, not a draft.

Check each SSN/ITIN against the prior-year return and a Social Security card image when available. Mistyped SSNs are the leading cause of e-file rejects (IRS reject codes IND-031 / IND-032). For dependents, also confirm date-of-birth — age drives CTC, ODC, and EITC eligibility.

Walk through the residency and support tests for any dependent claimed. For Head of Household, document the qualifying person and >50% household maintenance. If a custody arrangement applies, request Form 8332 from the noncustodial parent before claiming the child.

Capture routing and account numbers from a voided check or bank letter — never from client memory. Wrong routing on Form 1040 line 35 sends refunds to the IRS Treasury offset queue and recovery takes 12+ weeks.

Tie box 1 wages to the December final pay stub when available. Watch box 12 codes — code W (HSA), code DD (employer health), code D (401(k) deferral) — and code 14 state-specific items that affect state returns.

Pull 1099-NEC, 1099-MISC, 1099-INT, 1099-DIV, 1099-R, 1099-B, 1099-G, 1099-K, and SSA-1099. Pass-through K-1s from 1065 / 1120-S / 1041 frequently arrive late (after Mar 15); confirm whether to extend if any are outstanding.

Includes sole proprietorships, single-member LLCs, gig income, freelance, Schedule C consulting, and 1099-NEC contractor work. Answer drives whether the Schedule C reconciliation phase below is required.

Only the amount above 7.5% of AGI is deductible on Schedule A. For most middle-income clients medical falls below the floor and itemizing fails — confirm before chasing receipts. Long-term care premiums are subject to age-based caps (Pub 502).

SALT cap is $10,000 ($5,000 MFS) — state income, property, and sales taxes combined. Mortgage interest deductible on acquisition debt up to $750K (post-2017 originations) or $1M (grandfathered). Confirm any HELOC interest is acquisition-related, not personal-use.

Cash contributions over $250 require a contemporaneous written acknowledgment from the charity. Non-cash contributions over $500 require Form 8283; over $5,000 require a qualified appraisal. Missing acknowledgment letters are a routine IRS correspondence-audit disallowance.

Sum of all 1099-NEC and 1099-K amounts received should be ≤ Schedule C line 1 gross receipts. If gross receipts are lower than 1099 totals, the IRS DIF system flags the return — document any reconciling items (returns, refunds, prior-year deferrals) in the workpaper.

Map QBO P&L categories to lines 8–27a. Watch for meals (50% limitation), entertainment (no longer deductible post-TCJA), and Section 179 vs. bonus depreciation on assets placed in service. Vehicle expenses require business-use percentage from a contemporaneous mileage log.

Office must be used regularly and exclusively for business. Simplified method ($5/sq ft up to 300 sq ft) versus actual-expense method — run both and take the better number. Actual method requires depreciation recapture on sale; flag this for the client before electing.

Confirm covered vs. noncovered lots; basis on noncovered lots must come from client records, not the 1099-B. Watch for wash sales (code W) — most brokers report only intra-account; cross-account wash sales between spouses' accounts are a common audit finding.

Roll prior-year basis forward and add current-year nondeductible contributions. Backdoor Roth conversions require Form 8606 every year — missing the form turns the conversion into a fully taxable distribution under the pro-rata rule.

Excess IRA contributions hit a 6% excise tax each year until withdrawn. HSA contributions limited by months of HDHP coverage (last-month rule has a testing-period clawback). If the client over-contributed, they have until the extended return due date to withdraw the excess plus earnings.

Clear all critical and FYI diagnostics. Compare two-year tax summary line-by-line against the prior return — large unexplained variances are usually data-entry errors. Confirm Circular 230 §10.34 due-diligence positions are documented.

Reviewing partner ties each schedule to a workpaper, signs the review note, and clears any open items in writing. Partner sign-off is the firm's quality control under SSTS No. 1. Do not release the return to the client before the review note is closed.

Send Form 8879 (and 8879-S for state, if required) through TaxDome or DocuSign with the client's KBA layer. Do not e-file until both signatures are received — filing without signed 8879 is a Circular 230 §10.51 violation.

Transmit federal and state returns. Watch the acknowledgment queue for 24–48 hours. If rejected, fix and retransmit within the 5-day perfection window to preserve the original timely-filed date. Save the IRS submission ID and acceptance acknowledgment to the client folder.