Is it BS?
The Date that Equity Accounts are closed
What is January 1st of every year
It shows how book income and expenses translate to tax income and deductions.
What is a WTB or Working Trial Balance?
The filing status for a parent who is married but lived separately from their spouse for more than 6 months and provided more than half of the support of their child.
What is Head of Household
File where docs can be opened to read and edit when TaxDome App is signed into on the computer?
What is the TaxDome or Z drive?
The most obvious red flag that the fixed assets from previous years are over stated on the balance sheet
What is a fixed asset with no depreciation?
The easiest way to determine if cash is accurately reported on the balance sheet.
What is verify Reconciliations?
The percentage most meals are adjusted on the WTB.
What is 50%
The 2026 Traditional and Roth IRA contribution limit for those under 50.
What is $7500
Organize Documents - Follow Checklist by - Review Books - Review Prior Year Return - Create WTB - Enter documents in CCH- Complete Checktape.
What are the steps to preparing a return?
This red flag is a quick easy check to verify all docs were correctly entered in the Tax Return
What is a checktape that doesn't match the return?
A loan from the shareholder is considered an asset.
What is false?
This section on the WTB shows how and why the tax P&L differs from the Book P&L when the delta is 0.
What is the Book to Tax Section
The two new tax deductions for wage earners added with the OBBB.
What are Overtime wage deduction and Tip deduction.
It is the process of going over the return by a second preparer once the return has been completed.
What is a review?
This red flag should be discussed with the client if it has occured more than 3 years in a row.
The reason a tax preparer adds a loan to the shareholder.
What is the shareholder took more from the business than was available. (took distributions against debt)
The amount entered as cogs is determined by this formual. And calcuated on the far right of the WTB.
Generally more than 6 months -
OR More time than any other qualified person if tax payer is a foster parents - OR 1 second for new borns or deceased children. OR - 0 days if court ordered in the custody agreement.
How long does a child need to live with the taxpayer to be claimed as a dependent?
Tagging, noting, and moving tasks in the CRM.
What is the TaxDome process?
This red flag is automatically flagged by the IRS using income reporting documents such as 1099s and the business profit and loss statement.
What is income "mismatch"?
A great description of what a great balance sheets does for a client.
Its a snapshot of the business financial picture at any point in time. Assets = Liabilities + Equity.
It is how the Sch C Tax Income is entered on the CheckTape
What is linking the entry to the actual WTB Tax Income.
The rule stating that if partners are Your spouse, siblings (whole or half blood), ancestors (parents, grandparents), and lineal descendants (children, grandchildren OR if you own a certain percentage (often 50% or more) of an organization, you are treated as owning a proportionate share of the partnership interests that organization holds
What is Constructive Ownership?
Clear, concise, honest, kind and within 48 hrs.
How do we communicate with clients?
This red flag is because it indicates that the client is guessing on the amount of the expense and can trigger closer scrutiny at the IRS?
What are round numbers on the P&L?