Tax practitioners, as they rightly say, wear many hats; from document sorting to being a government form translator, and from being a deadline timekeeper to being a counselor for their clients, they have to do everything during the months from January through April. With Tax Season 2019 just around the corner, there is a list of few things that every tax preparer must have at their disposal to make the most of it when required.

1. 2019 PRE TAX
SEASON CHECKLIST
2019 PRE TAX
SEASON CHECKLIST
ebook

2. WHAT'S INSIDE
INTRODUCTION
AVOID: TAX RETURN PREPARATION ERRORS
WHAT TO INCLUDE IN YOUR CHECKLIST
FEW UPDATES ACCORDING TO TAX CUTS & JOBS
ACT
OPPORTUNITIES & CHALLENGES OF TAX
PLANNING POST TCJA
ARE YOU SUFFICIENTLY STAFFED?

3. INTRODUCTION
Tax practitioners, as they rightly say, wear many hats; from document sorting to
being a government form translator, and from being a deadline timekeeper to
being a counselor for their clients, they have to do everything during the months
from January through April.
Developing a detailed practice and procedure manual is very important for tax
firms that employs more than a handful of employees, and is essential for
operating more than one office effectively. However, having a checklist established
before the onset of the Tax Season is something every tax pro should also mark in
the checklist of their annual list of tasks. This comes as a savior compared to
handling cumbersome organizers that very often keep majority of clients in
oblivion, and are left unfilled. Imagine what could happen if you discovered that a
number of required information fields are left blank, and there’s barely any time to
have them filled in.

4. WHAT TO INCLUDE IN YOUR
CHECKLIST
With Tax Season 2019 just around the corner, there is a list of few things that every
tax preparer must have at their disposal to make the most of it when required.
Every accountant needs to have a perfectly planned, scheduled, and target
timelines for collating all necessary documents, reports, books of accounts, and so
on, of all his clients and business entities well ahead of the yearly deadline. This
following checklist is prepared as reference for accounting professionals and
colleagues who will bear the burden of organizing all such documents as required
to be filled in, and filed with the IRS during the Tax Season.
To begin with, every accounting professional must stay abreast with any and all
updates or amendments to the Tax Laws for every year, at the very beginning of
that accounting year. This will simply make their life easier, burden-free, and more
managed when it comes to handling their client’s documents. When you are well
versed with all such laws, provisions, and requirements, you can easily get your
clients to organize and manage their necessary documents well beforehand
instead of running around at the last moment.
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Compare from the last year’s return
and ensure there are no significant
dissimilarities.
For a more involved tax return
comparison feature prepare and
review an Excel tax comparison
worksheet
Check into the completed return if
there are no glaring errors or
omissions
Follow uniform procedures and use
worksheets documenting what you did
wherever possible
Make sure that all worksheets,
schedules, and lead sheets tie into
amounts on the tax return
Complete all checklists after reading
each question or comment
Compare output with any projection
that was done and reconcile large or
illogical differences
Respond to all questions and/or
comments raised on submitted data
by clients

5. Ensure you mark off all valid and (if) missing information from your client, and
fill-in wherever necessary with relevant details. As a reference, the following points
will guide you in having a set of completed tax documents from your clients
beforehand
Moreover, if required on your part, you should also impart any such notices or
follow-ups to your clients with respect to any requirements or changes as
introduced by accounting or tax law changes, to eliminate any delays or errors on
their part when they provide you with all necessary documents and information.
Consequently, you must ensure that you are well aware of all past history of your
clients’ accounts and tax records for managing (if any) dues, fines, penalties, etc. to
be paid in this fiscal year. It also helps to adjust for any tax credits received, or even
any tax returns receivable. To ensure that you have all the correct and relevant
information of your clients’ accounts, try to make time and personally scrutinize &
verify every document thoroughly.

6. AVOID: TAX RETURN PREPARATION
ERRORS
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Number transposition and spelling errors. This includes income and deduction amounts
and client Social Security numbers, addresses and zip codes. Spelling errors should also be
avoided – they indicate a lack of attention to what you are doing
Unreported 1099 income. Clients frequently leave out 1099s, but the preparer should make
sure all 1099 items from last year are accounted for. Missing 1099s that were not final for last
year should be accounted for
Tax payments. Entering incorrect and unpaid amounts can be avoided by requiring the
client to provide “proof” of the payments. Entering “incorrect” amounts provided by the
client is a major cause of tax notices
Keeping review notes after the return is completed. This can create liability issues if there is
ever a controversy over the return. Review notes usually deal with errors and omissions and
the type and quantity of them can indicate a lack of training or adherence to processes or
care, or improper procedures. Retaining these notes cannot ever help you
Not correcting reason for tax notices for prior year on this year’s return. This is a no brainer,
but for many preparers there is a disconnect between a notice for last year’s return and the
preparing of this year’s return
Not questioning numbers that stretch the imagination. My imagination is likely to be differ-
ent from yours, but a client with high debt indicated by mortgage and home equity loan
interest usually won’t be making cash charitable contributions equal to 8 percent of their
gross income. Likewise for maximum allowable IRA contributions. Explain the requirements
for substantiating these deductions and ask client if they have it

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Not following up enough with clients to get missing information. This could create last
minute rushes and unhappy clients, even though it was because of client’s lack of response
Not specifically asking clients if they have, can sign or control a foreign bank account
Not informing client(s) about items that aren’t on return such as traditional and Roth IRAs,
SEPs, making charitable contributions with appreciated stock, claiming a grown child with
minimal income who lives with client as a dependent, or signing up for an employer’s 401k
plan and/or flexible spending account, partial exercising of ISOs to avoid AMT or potential
for a Section 83(b) election for restricted stock or ISO awards
High mortgage interest deductions. Excessive amounts (usually over $50,000) are a red flag
for the IRS. Make sure the interest is not from excessive mortgages, that the funds were
used for proper purposes or that the interest tracking rules have been complied with, and
if mortgage proceeds were used for investment purposes, it is properly reflected on the
return
Alternative minimum tax. Watch for unapplied AMT credits and AMT NOLs, and state tax
refunds reported as income even though not deducted in prior year because of AMT
Not calling a client to relay unexpected (and especially bad) final results

8. The recently passed 2017 Tax Reform Act (“TCJA”) significantly changes the scope
for Taxpayers beginning on January 1, 2018. With substantial changes to the
individual income tax, the estate and gift tax and the taxation of business entities,
such changes implemented through the TCJA present a host of tax planning
challenges and opportunities for many Taxpayers across the country.
The TCJA is the first major overhaul of
the U.S. tax system in 30 years. The
TCJA is effective immediately, and
influences many aspects of your
financial standing. Consequently, it is
important to understand the
opportunities, challenges, and
provisions in the Act. Here is a
summary of who you would plan or
execute filing tax returns after TCJA
takes effect:
OPPORTUNITIES AND CHALLENGES
OF TAX PLANNING POST-TCJA

9. HERE ARE A FEW UPDATES
ACCORDING TO TAX CUTS & JOBS ACT
CHECKLIST OF CHANGES:CHECKLIST OF CHANGES:
STANDARD VS. ITEMIZED DEDUCTIONS
THE INCREASE IN THE STANDARD DEDUCTION LIKELY MEANS THAT MANY MORE TAXPAYERS
WILL BE BETTER OFF WITH THE STANDARD DEDUCTION IN 2018. THAT WILL MEAN SIMPLIFI-
CATION FOR MANY MORE TAXPAYERS, BUT THEY STILL MAY NOT BE HAPPY IF THEY DID NOT
KNOW ABOUT IT AND DID NOT PREPARE FOR THE LOSS OF ITEMIZED DEDUCTIONS DURING
2018.
MEDICAL EXPENSE DEDUCTION
THE THRESHOLD FOR THE MEDICAL EXPENSE DEDUCTION IS LOWERED TO 7.5 PERCENT OF
ADJUSTED GROSS INCOME FOR REGULAR TAX AND ALTERNATIVE MINIMUM TAX PURPOSES.
IT REVERTS BACK TO 10 PERCENT IN 2019.
THE SALT CAP
THE STATE AND LOCAL TAX DEDUCTION IS CAPPED AT $10,000. THIS INCLUDES BOTH STATE
INCOME OR SALES TAXES AND PROPERTY TAXES. STATE EFFORTS TO DO WORKAROUNDS
FOR THE LIMIT THROUGH STATE CHARITABLE CONTRIBUTIONS WITH STATE INCOME TAX
CREDITS MAY NOT WORK DUE TO IRS PROPOSED REGULATIONS LIMITING THE CHARITABLE
DEDUCTION TO THE EXTENT OF ANY STATE OR LOCAL TAX CREDITS. THIS ALSO IMPACTS
PRE-EXISTING STATE CHARITABLE CONTRIBUTION PROGRAMS. IF THE TAXPAYER CAN ALLO-
CATE PART OF THE SALT TO A BUSINESS, THAT PORTION ESCAPES THE CAP.
CASUALTY LOSS
THERE IS NO CASUALTY LOSS DEDUCTION UNLESS FOR A FEDERALLY DECLARED DISASTER.
THE TAXPAYER IS REQUIRED TO INCLUDE THE FEMA NUMBER AND THE LOCATION OF PROP-
ERTY WHEN THE CLAIMING LOSS DEDUCTION.
CHARITABLE CONTRIBUTIONS
THE DEDUCTION LIMIT IS INCREASED TO 60 PERCENT OF AGI. THERE IS NO DEDUCTION IF THE
CONTRIBUTION SECURES ATHLETIC EVENT SEATING RIGHTS. TAXPAYERS WILL NEED CON-
TEMPORANEOUS SUBSTANTIATION FOR ANY CONTRIBUTION OF $250 OR MORE, EVEN IF THE
CHARITY HAS REPORTED CONTRIBUTION TO IRS

10. THE CHILD TAX CREDIT
TO CLAIM THE INCREASED CHILD TAX CREDIT IN 2018, TAXPAYERS WILL NEED SOCIAL SECURI-
TY NUMBERS FOR EVERY QUALIFYING CHILD.
QUALIFYING RELATIVE CREDIT
THERE IS A NEW $500 DEDUCTION FOR A QUALIFYING RELATIVE. THE TAXPAYER ID NUMBER
IS SUFFICIENT FOR THIS CREDIT, WHICH CAN APPLY TO A CHILD THAT DOES NOT QUALIFY
FOR THE CTC.
MORTGAGE INTEREST DEDUCTION
BE CAREFUL OF ANY MORTGAGE MODIFICATION THAT INCLUDED CASH OUT, EVEN IF JUST
FOR CLOSING COSTS – IT MAY RESULT IN LOSS OF THE GRANDFATHERED $1 MILLION DEBT
LIMIT AND BECOME A $750,000 DEBT LIMIT. NO HOME EQUITY INTEREST DEDUCTION CAN BE
CLAIMED UNLESS THE TAXPAYER CAN DOCUMENT THE EXPENSES TO BUY, BUILD OR
IMPROVE THE HOME.
MISCELLANEOUS ITEMIZED DEDUCTIONS
THE DEDUCTION FOR MISCELLANEOUS ITEMIZED DEDUCTIONS SUBJECT TO THE 2 PERCENT
OF AGI FLOOR WAS REPEALED THROUGH 2025, INCLUDING UNREIMBURSED EMPLOYEE
BUSINESS EXPENSES, INVESTMENT EXPENSES, TAX PREPARATION FEES, AND HOBBY
EXPENSES.
THE DEDUCTION IS CLAIMED ON THE NEW LINE 9 ON THE DRAFT FORM 1040. THERE IS A
NEED TO DETERMINE QUALIFIED BUSINESS INCOME, AND TAXPAYERS MAY ALSO NEED TO
DETERMINE IF THEIRS IS A SPECIFIED SERVICE TRADE OR BUSINESS, IF THERE ARE W-2
WAGES, AND THE UNADJUSTED BASIS OF QUALIFIED PROPERTY IMMEDIATELY AFTER ACQUI-
SITION. FOR OWNERS OF PARTNERSHIPS AND S CORPORATIONS, BUSINESS INFORMATION
SHOULD BE PROVIDED IN BOX 20 OF FORM K-1.
FOR OWNERS OF PASS-THROUGH BUSINESSES
THE CHILD TAX CREDIT
TO CLAIM THE INCREASED CHILD TAX CREDIT IN 2018, TAXPAYERS WILL NEED SOCIAL SECURI-
TY NUMBERS FOR EVERY QUALIFYING CHILD.

11. THE CHILD TAX CREDITQUALIFYING RELATIVE CREDIT
THERE IS A NEW $500 DEDUCTION FOR A QUALIFYING RELATIVE. THE TAXPAYER ID NUMBER
IS SUFFICIENT FOR THIS CREDIT, WHICH CAN APPLY TO A CHILD THAT DOES NOT QUALIFY
FOR THE CTC.
MOVING EXPENSES
THE DEDUCTION AND EXCLUSION ARE GONE FOR EVERYONE -- EXCEPT MEMBERS OF THE
ARMED FORCES
THE KIDDIE TAX
THE KIDDIE TAX IS NOW TAXED AT THE ESTATE AND TRUST TAX RATES, RATHER THAN THE
PARENTS’ TAX RATE.
CARRIED INTERESTS
THE INDIVIDUAL MANDATE IS STILL REQUIRED FOR 2018 -- IT EXPIRES FOR 2019
THE ALTERNATIVE MINIMUM TAX
THE INCREASE IN THE AMT EXCLUSION AMOUNTS AND LOWER REGULAR TAX RATES WILL
LIKELY MEAN THAT FEWER MIDDLE-INCOME TAXPAYERS WILL BE CAUGHT BY THE AMT, BUT
MORE HIGHER-INCOME TAXPAYERS WILL BE CAUGHT.
BUSINESS CHANGES
THERE ARE HIGHER EXPENSING LIMITS FOR CAPITAL PURCHASES UNDER CODE SEC. 179 AND
BONUS DEPRECIATION (CURRENTLY 100 PERCENT). BE CAREFUL, HOWEVER – HIGHER
EXPENSING IS LIKELY TO REDUCE THE 20 PERCENT DEDUCTION FOR OWNERS OF
PASS-THROUGH BUSINESSES.
BUSINESS INTEREST
THERE ARE NEW LIMITS ON DEDUCTING BUSINESS INTEREST BASED ON A 30 PERCENT OF
AGI LIMIT, UNLESS THE BUSINESS IS UNDER $25 MILLION IN AVERAGE GROSS RECEIPTS

12. UNDER $25 MILLION IN AVERAGE GROSS RECEIPTS
ALSO, IF THE BUSINESS IS UNDER $25 MILLION IN AVERAGE GROSS RECEIPTS, IT CAN USE THE
CASH METHOD OF ACCOUNTING, HAS NO REQUIREMENT FOR INVENTORIES, AND IS EXEMPT
FROM THE UNICAP RULES. THE TAXPAYER MAY NEED TO FILE A FORM 3115 FOR A CHANGE OF
ACCOUNTING METHOD
NET OPERATION LOSS
THERE IS NO CARRYBACK OF NET OPERATING LOSSES TO PRIOR YEARS UNLESS FOR FARM-
ING AND CERTAIN INSURANCE COMPANIES
ENTERTAINMENT AND MEAL EXPENSES
THERE IS NO DEDUCTION FOR ENTERTAINMENT EXPENSES. THE 50 PERCENT DEDUCTION
FOR MEAL EXPENSES SURVIVES IF THE TAXPAYER CAN IDENTIFY THE MEAL EXPENSE SEPA-
RATELY FROM THE ENTERTAINMENT EXPENSE.
HARASSMENT SETTLEMENTS
THERE IS NO DEDUCTION FOR SEXUAL HARASSMENT OR ABUSE SETTLEMENTS IF THE SET-
TLEMENT INCLUDES A NON-DISCLOSURE AGREEMENT.
PAID FAMILY AND MEDICAL LEAVE
THERE IS A NEW CREDIT FOR PAID FAMILY AND MEDICAL LEAVE.
TRANSPORTATION EXCLUSIONS
MANY TRANSPORTATION FRINGE BENEFIT EXCLUSIONS HAVE BEEN ELIMINATED.
SALE OF PARTNERSHIP INTERESTS
IF THERE HAS BEEN A SALE OF A PARTNERSHIP INTEREST, PARTNERS AND PARTNERSHIPS
SHOULD CHECK CERTIFICATION REQUIREMENTS THAT THERE IS NO FOREIGN INTEREST
INVOLVED IN THE SALE TO AVOID A 10 PERCENT WITHHOLDING REQUIREMENT.

13. ATTORNEY ADVANCED LITIGATION COSTS
THERE IS NO LONGER A CURRENT DEDUCTION FOR LITIGATION COSTS ADVANCED BY AN
ATTORNEY.
OUT-OF-STATE SELLERS
MANY STATES HAVE IMPLEMENTED THE SUPREME COURT’S WAYFAIR DECISION REQUIRING
OUT-OF-STATE SELLERS TO COLLECT SALES TAX
FOR TAX PREPARERS: HEAD OF HOUSEHOLD FILING STATUS
RETURN PREPARER DUE DILIGENCE HAS BEEN EXPANDED TO INCLUDE HEAD OF HOUSE-
HOLD FILING STATUS ON FORM 8867.
BLOOMBERG NEWS
THE MISCELLANEOUS ITEMIZED DEDUCTION FOR TAX RETURN PREPARATION FEES IS NO
LONGER AVAILABLE THROUGH 2025

14. OPPORTUNITIES AND CHALLENGES
OF TAX PLANNING POST-TCJA
If you own a pass-through business, it would be important to review
how your business is structured to ensure you are taking full advantage
of the pass-through business tax deduction. Depending on the size and
structure of your business, it might be advantageous to create several
pass-through businesses or incorporate as a C corporation
If you are an employee, it is worth reviewing your situation to see if it
would be more beneficial and possible for you to be an independent
contractor or owner rather than an employee. If you are an
independent contractor or owner, you might qualify for the
pass-through business deduction
It will remain important for you to keep track of your medical expenses,
mortgage interest, property and state income or sales tax payments
and charitable contributions made during 2018 due to new restrictions
on itemized deductions
If you have a home equity line, you may want to consider refinancing
your home equity line into a single mortgage on your principal or
second home in 2018, assuming that your combined mortgage interest
and other permitted itemized deductions exceed the standard
deduction
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Employees who incur significant unreimbursed business expenses may
want to ask their employer about adjusting their compensation or
establishing an accountable expense reimbursement plan that would
allow the employer to reimburse the employee tax-free while also
entitling them to a deduction against their business income
If you are currently contemplating divorce or separation, you should
carefully review the effects of the new law to determine the economic
effects on your tax situation and the timing of any agreements
Due to the elimination or limitation on itemized deductions, and the
elimination of personal exemptions, a key consideration in planning for
2018 is to first look at ways to lower your taxable income. You should,
there forth, consider maximizing all pre-tax contribution opportunities,
such as your 401(k) and deductible IRA contributions, as well as
consider investing in state and municipal bonds (its interest is exempt
from federal tax)
If your children are enrolled in and/or are going to be enrolled in private
schools, there is a greater incentive to contribute to 529 Plans

16. ARE YOU SUFFICIENTLY STAFFED?
With the onset of a very hectic and busy
tax computation and filing season, it may
so happen that you might be
understaffed or overloaded with so much
work that your existing staff may not be
able to put up with that kind of workload.
Moreover, you wouldn’t want to risk the
chances of any errors or omissions
entering your clients’ records for filing by
overworked staff. It is pretty much
important to have enough workforce to
deal with calculated, expected workloads
for the tax season.
For this very reason, you can either hire more local staff before the beginning of
your tax season conquest. Or, you can have a flexible option of hiring remote
staff for meeting the requirements as the quantity of work starts pouring in.
With the former option, you need ample time for shortlisting probable
candidates, pass them through thorough training and practices within your
organization, and have tons of stringent legalities to conform to. With the latter,
you have readily available trained staff with loads of experience, relevant
training in most popular accounting software applications, flexible timings, and
superior flexibility to scale up or trim down at a moment’s notice, depending on
the workload flowing into your organization.

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