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Tax Return Review

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What is the best way of reviewing the return, if I want to review the details.  Multiple information can flow to multiple places however, the input audit trail does not drill down far enough. Do we have to prepare an excel spreadsheet for all items that flow in from multiple places?  I.e. medical expenses can come from various inputs areas, such as K-1, adjustments to income, prescriptions, doctors, out of pocket expenses.  So can withholding be coming from various sources, such as W-2, 1099-G, 1099-SSA, 1099-B, 1099-DIV, etc.

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Back in the Before Times, when everything was uphill both ways in the snow, we used a 10-key tape. At the bottom of each piece of paper in the file was a number that represented the net impact on taxable income the preparer expected from that piece of paper. When you're done with your input, you add the numbers from each page-bottom on the 10-key, compare that to the Lacerte calculated taxable income, adjust for phase-outs, then affix the tape to the printed Lacerte Tax Summary to demonstrate that Lacerte came up with the number you expected.

Then for one or two transitional years, we had a fillable PDF form that worked similarly.

And now we have a standard Excel template that calculates most of the the phase-outs and limitations and mechanical stuff like NIIT and QBI and the "some of that Medicare tax goes on the Federal withholding line" automatically. Every single return uses it, even kids with one W-2.

For a couple of people with the ugly K-1s that go to a dozen places on the return, they have their own modified version of the Excel, where I can map the K-1 numbers onto 90 different ugly K-1 items, and Excel adds up the pieces that all end up on the same line on the tax return and takes them to the main template automatically. It also calculates outside basis, because a GAAP basis capital account is a tool of the devil.

Some people really like to review input, and they figure if they have the input right that the output is probably right. I like to review output, and figure that if the output is right, the input is probably right. 

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Back in the Before Times, when everything was uphill both ways in the snow, we used a 10-key tape. At the bottom of each piece of paper in the file was a number that represented the net impact on taxable income the preparer expected from that piece of paper. When you're done with your input, you add the numbers from each page-bottom on the 10-key, compare that to the Lacerte calculated taxable income, adjust for phase-outs, then affix the tape to the printed Lacerte Tax Summary to demonstrate that Lacerte came up with the number you expected.

Then for one or two transitional years, we had a fillable PDF form that worked similarly.

And now we have a standard Excel template that calculates most of the the phase-outs and limitations and mechanical stuff like NIIT and QBI and the "some of that Medicare tax goes on the Federal withholding line" automatically. Every single return uses it, even kids with one W-2.

For a couple of people with the ugly K-1s that go to a dozen places on the return, they have their own modified version of the Excel, where I can map the K-1 numbers onto 90 different ugly K-1 items, and Excel adds up the pieces that all end up on the same line on the tax return and takes them to the main template automatically. It also calculates outside basis, because a GAAP basis capital account is a tool of the devil.

Some people really like to review input, and they figure if they have the input right that the output is probably right. I like to review output, and figure that if the output is right, the input is probably right. 

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@PhoebeRoberts, I loved your answer.  Thats what I thought would need to be.  Would it be possible to get that excel spreadsheet, or am I asking for too much?  Thanks in advance and for your great answer.

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Yeah, sure. I'm not sure how much good it'll do you, because my brain probably works differently than yours does. 

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Level 15

"...when everything was uphill both ways in the snow"   🤣  LOL

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I PM'd you!

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Level 15

Don't see it, yet.  I emailed you off-forum.

Oh... bet you weren't talking to ME 😉

Former Chump... umm.... AllStar.
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could you send it to [email address removed]   and [email address removed]   Thank you in advance.   I am having issues with the private messages.

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Got it, and sent!

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Level 15

I do basically the same process as 'taxgirlie' does.

I have an excel spreadsheet called "control totals"

Source docs are used to enter the info (W-2s, interest, dividends, batch tape amounts for Sch C, E, F, etc).   Those numbers are matched to the numbers on the Lacerte Tax Summary ( sure to wish we could put audit checks on the summary...) and/or the forms are ticked with the green audit check.

My theory is that if the output matches the expected result, then the input must be correct.

I also have an extensive excel spreadsheet to input K-1 info if a client has more than just a couple of simple K-1's (I developed this for a client with over 35 K-1's...).

Lacerte DOES have a screen to input control totals - I've played with it, but don't find it to be as useful as my excel control totals.  YMMV.

It is critical to know what the return is supposed to show before considering it correct.

Former Chump... umm.... AllStar.
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Thanks ABC Tax.  I agree, the outcome should be known.  Trying to teach the staff to learn how it should look like and trying not to print out thousands of pages of input sheets like I have been doing for years.  What does YMMV stands for?

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Level 15

YourMileageMayVary.

And you really should give Phoebe the solve, not me....

Former Chump... umm.... AllStar.
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You are absolutely right. How do I unsolve you and solve Phoebe?  Any ideas?

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Level 15

I think you just click again on my post to remove it, then on hers?

It really doesn't matter tho - we don't get any perks for those.  I was just giving you a hard time 🙂

Former Chump... umm.... AllStar.
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Its all good and you are right.  Credit should go where credit is deserved.  I will try but cant guarantee.

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