Reviewing Your Tax Return
It’s your tax return, and you should review it.
You are ultimately responsible for your tax return.
I know, it may seem a bit much to have to review your tax return – after all, you’re working with a tax preparer, and we’re the experts, right!?
While you’re not wrong, we want to make sure you’ve done everything you can to understand your tax return before it gets filed. We’ll provide you with an asynchronous video review of your tax return and use that as an opportunity to clarify the questions we most commonly get about returns that are similar to yours. But, we’re not mind readers. And, sometimes, you see things we don’t. We’d rather answer a question and help you understand your return before its filed than to file a return that may be incorrect and have to amend later.
What am I looking at!?
The short answer is anything surprising or confusing or that doesn’t make sense for your financial life.
We can’t tell you not to look at every number on the tax return. And, frankly, it might be confusing to look at every number on the return itself. We do encourage you to take a deep breath and look at the forms themselves.
- Look for things that don’t make sense or that you don’t understand. See $1,000 of interest income you weren’t expecting? Income you were expecting that isn’t there? Anything else surprising? Ask a question about that number.
- Businesses can look at their accounting records and compare them to your tax return. The numbers there and the numbers on your tax return won’t always be the same though.
- Adjustments happen! As part of tax return preparation, we look at and compare certain numbers in your accounting records to other documentation. When they don’t match, we look for reasons why. This may cause us to make an adjustment to your accounting.
- We provide a copy of those adjustments, which includes a brief explanation of what that adjustment is doing. We also give you summaries that start at the information that was originally in your accounting software and move through to the end results on your tax return.
- Some adjustments are for tax purposes only. They’re made on the tax return and not to or through your accouning. These are also shown on your summaries.
- Anything else on your return that you’re not understanding and/or would like further clarification on.
Double Check the Things You Know
Your name, address, and other information on the tax return are an easy thing to check. This will also give you a boost of confidence – you can, indeed, check these.
If you’re expecting a refund, you’ll receive information about how and where that refund will be received. This is also something you can (and really should) double check.
What do you most often change?
After our clients review their tax returns, we’re most likely to change:
- An address – yes, we do ask for your address every year. And, yes, we do look at that address you provide and update our records. It’s still the most common thing that ends up being changed.
- Additional deductions. For business owners, this is usually things like mileage (we ask about this during return preparation) or expenses that weren’t included originally. The best way to get ahead of that is to use an accounting system.
- A change in direct deposit information.
- An additional 1099 – usually for interest income.
- Charitable contributions not originally provided.
- Estimated tax payments not originally provided.
What do I do if I don't understand something?
Ask us a question. And please, help us help you. “I don’t understand,” doesn’t point us toward the problem. Neither does, “why are my taxes so high,” “why are my taxes so low?” or, “but that’s not the amount of money I received.”
“I don’t understand this number (give the number – even better, tell me where you see it),” or, “Why does this number exist,” or, “Could you walk me through this line,” helps me help you.
What do I do if I found something!?
Don’t just stand there! Say something. We’re not going to be offended if you found something that needs changing. It’s better for us to update your return prior to filing than to file an incorrect or incomplete tax return.
When we know what the problem is, we can provide you with support and next steps.
Something's being changed. What's next?
Short answer: we update the tax return.
Your engagement letter will guide what happens with and during the resolution.
But what if the return has already been filed and then I find something that should have been different!?
First off, tell us as soon as you possibly can. We can’t solve problems that we don’t know exist. We’ll provide you with our best advice and your options as soon as we’re able to.
First off, tell us as soon as you possibly can. We can’t solve problems that we don’t know exist. We’ll provide you with your options as to how to move forward.
This post has been developed as a generic explanation of reviewing your tax return. This information is written to be informative and is not tax advice. You should consult with your tax advisor as to how this information applies to your situation. Your specific needs may vary and may cause specific attention to need to be given to your processes. You should speak with your tax professional regarding the applicability of these issues to you and your business (and, yes, that includes Crayon Advisory if you are a current or onboarding client).