What to check in a business tax return draft before signing

Check the legal name, identifying number, tax period, addresses, and return type against the company's records. Confirm whether the draft is an original, amended, short-year, or final return where relevant. A technically prepared return can still start with an incorrect entity or period.

Ask which version of the financial records the preparer used. Identify the approved trial balance or other agreed inputs and the date they were supplied. If bookkeeping changed afterward, confirm whether the preparer received and incorporated the changes.

Book profit and taxable income can differ for valid reasons. Ask for a reconciliation appropriate to the return and entity, with explanations of significant adjustments. Do not demand that the preparer change the return merely to match the profit and loss statement.

Compare material revenue, payroll, asset, debt, and owner-transaction amounts with the supporting schedules. Where the return uses a different presentation, ask how the amounts connect. A clear explanation is more useful than checking whether every line label resembles the chart of accounts.

Ask the preparer to identify elections, positions, or estimates that require your decision or could affect later years. Understand the assumptions and consequences before approving them. A signature request should not be the first time the business learns that a significant election is being made.

For an illustrative equipment purchase, the financial statements and tax return may use different depreciation treatment. Give the preparer accurate cost, use, financing, and placed-in-service facts, then ask for the proposed treatment and alternatives relevant to the company. Do not choose a deduction solely because it produces the lowest current-year tax in one draft.

Confirm the filing method, who submits the return, and what evidence of acceptance or delivery will be retained. Verify payment amount, entity, tax period, method, and date through the preparer's approved process. A signed authorization is not proof that a payment has settled.

Keep your questions and the preparer's responses with the approved draft. After submission, obtain the final filed copy, relevant acceptance or delivery evidence, payment confirmation, and adjustment schedule. Store those records together so next year's engagement begins with the version actually filed.