Preparing a Tax Return

Question 1

What are the 9 phases of preparing a return?

Answer 1

1. Data intake/gathering
2. Data cleansing
3. Data errors/fall out treatment
4. Completing the return
5. Payment of the return
6. Remitting the return
7. Proper documentation
8. Storage, retention, and retrieval
9. Security, cybersecurity, and confidentiality

Question 2

What are the 3 types of data sources for info and amounts that will eventually be used on the return?

Answer 2

1. System generated data
2. Manually generated data
3. Estimated data

Question 3

What are 3 things you can use to verify the accuracy of the data during the data cleansing phase of return prep?

Answer 3

1. General Ledger (tax collected vs tax caluclated)
2. Business Knowledge (knowing how much tax is usually reported)
3. Prior Period Returns (used for comparison purposes)

Question 4

What are 2 things to check for during the Data Errors/Fall Out phase of return prep?

Answer 4

1. Accuracy of tax rates
2. Making sure you’re registered for the jurisdiction you’re about to file in

Question 5

What are 8 consequences of failing to remit the correct amount of tax?

Answer 5

1. Loss of SOL
2. Intense scrutiny from state
3. I&P
4. Liens/Seizure
5. Permit revocation
6. Padlock
7. Criminal prosecution
8. Gray bar hotel

Question 6

What are 4 types of documents you should retain from the return prep process?

Answer 6

1. Copies of tax returns and supporting worksheets
2. Source documents/data
3. Purchase and expense support
4. Exemption certs

Question 7

What are 4 common payment methods used after filing a return?

Answer 7

1. Check/E-check
2. EFT/ACH
3. Credit Card
4. Bank Wire

Question 8

What are 7 key elements of a return?

Answer 8

1. Gross sales
2. Taxable sales
3. Tax due
4. Tax collected
5. Due date
6. Payment date
7. Filing period