Comparison
Today I made a mistake of overlooking an itemized deduction that was not entered for an individual tax return.
I thought I had reviewed it pretty carefully and performed PY comparison analysis. Obviously, I skipped one. I learned the following;
1. 90% of our clients has a previous year tax return that we can compare. Usually people's life do not change dramatically. The income and deductions in most cases are comparable. By performing a PY comparison analysis, we should be able to get rid of substantial amount of mistakes.
2. We need to be systematic when reviewing a return. Whether you are the preparer or the reviewer, we need to be thorough in comparison and do it systematically, so that we don't miss an item. In my case, this may have happened because I took a phone call, or something and skipped an item to review without recognizing. If I had been more systematic and written the review process, this could have been avoided.
Conclusion:
The prior year comparison is very important. It needs to be done by the preparer, written down, and the reviewer needs to write down the review also. This may add 5 minutes to the preparation process for some of you, but is worth it.
We have a lot of things to do. But good system will save you time in the long run and give you a peace of mind.
Iso
I thought I had reviewed it pretty carefully and performed PY comparison analysis. Obviously, I skipped one. I learned the following;
1. 90% of our clients has a previous year tax return that we can compare. Usually people's life do not change dramatically. The income and deductions in most cases are comparable. By performing a PY comparison analysis, we should be able to get rid of substantial amount of mistakes.
2. We need to be systematic when reviewing a return. Whether you are the preparer or the reviewer, we need to be thorough in comparison and do it systematically, so that we don't miss an item. In my case, this may have happened because I took a phone call, or something and skipped an item to review without recognizing. If I had been more systematic and written the review process, this could have been avoided.
Conclusion:
The prior year comparison is very important. It needs to be done by the preparer, written down, and the reviewer needs to write down the review also. This may add 5 minutes to the preparation process for some of you, but is worth it.
We have a lot of things to do. But good system will save you time in the long run and give you a peace of mind.
Iso
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