Tax Preparer Questions to Ask Clients

Why ask it

For a United States federal return, marital status is taken as of December 31. A November wedding counts for the whole year and a divorce that is not final until January has not happened yet as far as this return goes, so take the date along with the status. 'Separated' is not an answer yet: ask whether a court has issued anything, and whether the couple shared a home at any point from July on.

Why ask it

Ask for everybody, including the people they have no plan to claim. The partner, the adult child back from college and the grandmother in the spare room all bear on filing status and on who can claim whom. Write the months beside each name, because several of the tests count them.

Why ask it

Clients say 'my kids' about stepchildren, a partner's children, nieces and grandchildren, and the rules treat those relationships differently. Get the exact relationship and the date of birth for each. Where the client cannot name the tie, as with a friend's child or a partner's nephew, work through the dependency tests one at a time before the name goes on the return.

Why ask it

When two returns claim one child, the second to be e-filed is usually rejected, and the client hears about it from you. Where parents live apart, ask who the child spent more nights with and whether that parent has signed a release. A release moves some tax benefits and not others, so check which before you promise anything.

Why ask it

Students and young adults still living with their parents are the ones to press on this. If the client is not sure, they should phone home before you file: the answer changes what the client can take, and whichever of the two returns goes in second may be rejected.

Why ask it

A teenager's summer job rarely matters, but a parent's pension or an adult child's wages can end the claim, since some dependents have to fall under an income ceiling that changes each year. It also tells you whether that person needs a return of their own. 'Nothing much' should become a figure before you move on.

Why ask it

Head of household depends on the client paying more than half the cost of keeping up the home. A good answer comes with rough monthly amounts. If a partner, a parent or a housing benefit covers most of it, add the figures up together before choosing the status, and keep the worksheet.

Why ask it

Either can extend the age up to which a child still counts. For a student, get the school's name and the months of enrollment. For a disability, ask what documentation exists, and stop there: the return does not need the medical history.

Why ask it

Photo ID tells you the person at your desk is the person named on the return. A number recited from memory, or a married name the Social Security Administration was never told about, gets an e-filed return rejected, so copy each name exactly as the card prints it. If a number has been applied for and has not arrived, check how that affects each credit before you file, because the date a number was issued can decide whether a credit is allowed.

Why ask it

Count the jobs before you count the forms. The two weeks at a warehouse in January and the employer that went out of business are the ones that go missing, and the IRS has its own copy of both. A last pay stub is a place to start from but not a substitute, so agree who will chase the employer.

Why ask it

Tips count as income on a federal return whether or not the employer was told about them, so the cash that went home in a pocket belongs in the answer. Recent federal law added deductions for some tip and overtime pay in certain years, each with its own conditions and limits. Look up the year you are preparing, and keep the December pay stub, because the wage form may not break the amounts out.

Why ask it

Put it to every client whether or not a form arrived, and name the kinds of work, because plenty of people do not think of a weekend side job as self-employment. 'It was only a little' is a yes. Follow with what they spent to earn it, since the tax falls on the profit and self-employment tax may come on top.

Why ask it

A form from a payment platform can mix business receipts with a roommate's share of the rent, so go through it line by line and separate the two on paper. The dollar level at which platforms must issue the form has moved more than once. Look up the rule for the year you are preparing, and remember that income below it still counts.

Why ask it

These are generally taxable on the federal return, and states go their own way, so check yours. The form is often posted to an online account the client has not opened since the benefits stopped. If no tax was withheld, warn them about the balance before they see it.

Why ask it

For any withdrawal, find out where the money went next. A rollover into another plan and a cash-out to cover rent can look alike on the form and are taxed very differently. An early withdrawal the client says they 'paid back' needs dates and statements before you treat it as anything but income.

Why ask it

You need what they paid as well as what they got. The broker's form often shows the cost, but employer shares and digital assets tend to arrive with that figure blank or wrong. The federal return also asks a direct yes-or-no question about digital assets, so read it to the client in the form's own words and record the answer.

Why ask it

'Which' gets a list where 'did you have any' gets a no. Online savings accounts post their forms to a portal and never mail them. Compare the list with last year's return: an account that has vanished was either closed or forgotten.

Why ask it

A yes opens a second interview: rent received, expenses, days of personal use, and the depreciation taken in earlier years. If the client cannot find the purchase papers or has never claimed depreciation, sort that out well before the deadline. Short stays through a booking site have rules of their own, so get the number of days rented.

Why ask it

These come late, sometimes after the filing deadline, so decide together whether to extend or to file and amend. If you extend, estimate what the K-1 will add and have the client pay toward it by the original date, since a federal extension does not put off the payment. A client who does not know the term may still own a share of a family business, so ask it in plain words too.

Why ask it

Winnings count whether or not the casino handed over a form. Clients expect their losses to cancel them out, but the rules for losses are narrow and have changed, so check the current year. A memory of a bad year at the tables is not a record of one.

Why ask it

Under current federal law the date of the divorce or separation agreement decides how alimony is treated, so read it off the document and not the client's recollection. Check whether the agreement was modified later. Child support is a different thing, and clients often use the two words for one payment.

Why ask it

Forgiven debt is generally income unless an exception applies, and the lender reports it. Clients treat a settled credit card as good news and the form that follows as junk mail. To test an exception you will need what they owned and owed at the time, which is delicate to ask for and worth explaining first.

Why ask it

Foreign accounts can carry reporting duties even in a year they earned nothing, with penalties out of proportion to the sums. A client with a savings account in the country they grew up in will often assume it does not count. If this is outside the work you do, say so, refer them, and note that you asked.

Why ask it

Then wait. Jury pay, a legal settlement, a scholarship that paid for housing or rent from a relative tend to surface in the silence. After a quick no, read the income types on your intake sheet aloud once and watch for a second thought.

Why ask it

Open the section with it, before the checklist, and let them talk for a minute. People mention the new baby and forget the job that ended in March. Whatever they raise first is usually what they are worried about, so deal with it before moving on.

Why ask it

A child born late in the year is generally treated as having lived with the client all year, and a spouse's death bears on the filing status for this year and sometimes for the two after. Get the dates gently, and the documents: a birth certificate, placement papers, the Social Security number. After a death, find out who is handling the estate and whether a final return falls to you.

Why ask it

A move across a state line can mean two part-year returns, and each state defines a resident in its own way. You need the date of the move, where each paycheck was earned, including remote work, and whether a home was kept in the old state. Find out how both states handle it before you quote a fee.

Why ask it

The closing statement is the document to ask for: it carries the taxes, points and dates that the lender's year-end form leaves out. On a sale, establish how long they owned the home and lived in it, and whether it was ever rented or used as an office. Write down the purchase price, the improvements and the sale price even when the client is sure there was no gain.

Why ask it

Each one leaves something behind: severance, a payout of unused leave, a retirement plan cashed out or rolled over, a gap in health coverage. Name them one at a time. Two employers in a year often means withholding came up short, so say that before you run the numbers.

Why ask it

A new business needs its start date, what was spent before it opened and how it is legally organized, since each form of business files differently. A closed one leaves equipment, inventory and sometimes debt to account for. If the company was formed through an online service, ask to see what was filed: clients often cannot say what kind of entity they created.

Why ask it

If advance payments of the premium credit went to the insurer, the return has to reconcile them, and an e-filed return without that form can be rejected. The statement lists everyone on the policy, so check for an adult child who was covered and now files alone. A raise during the year can mean part of the credit is owed back, which is better heard before the result is on the screen.

Why ask it

Receiving one is generally not income on the federal return, a relief worth saying aloud. What matters is what was inherited, since a retirement account, a house and shares each bring their own later tax: record the date of death and the values while they are easy to find. A large gift can call for a separate return from the giver even when no tax is due, and some states tax inheritances themselves.

Why ask it

Last year's return answers it, but asking shows whether the client knows. If they were nowhere near itemizing and nothing big has changed, cover the next few questions in a minute and do not send them home to dig for receipts. A new mortgage, a large gift to charity or a heavy medical year is the reason to slow down.

Why ask it

The lender's form goes to one borrower, and the person who paid may be someone else: an unmarried partner, a parent, a former spouse. Establish who is legally on the loan and who made the payments from which account. Property tax paid through escrow shows on the form, but a bill paid straight to the county does not.

Why ask it

Separate money from goods. Cash gifts need a bank record or a letter from the charity, and the larger ones need the charity's written acknowledgment in hand before you file. 'Four bags of clothes, about a thousand dollars' needs a list and a sensible basis for the value, and round numbers with no paper behind them are the ones to question.

Why ask it

Get the rough total first. These costs count only above a floor tied to income, and only for itemizers, so a client with ordinary copays gains nothing from sorting a year of receipts. Surgery, long-term care or large premiums paid from after-tax money are when the full list is worth building.

Why ask it

The credit asks for the provider's name, address and tax identification number, so a client who never collected them has a phone call to make, and the form's instructions cover a provider who refuses. Cash paid to a relative can qualify in some cases, but the relative then has income to report, which the client should know before deciding. Money set aside through an employer's dependent care plan reduces what is left to claim.

Why ask it

The school's form alone can mislead: it may not show when payments were made, or it may show scholarships larger than the tuition. The account statement shows what was billed, what was paid and in which year. Find out who paid and with what, since loans, scholarships and a relative's help each enter the calculation in their own way.

Why ask it

The lender's statement often sits in an online account, and some lenders send none when the interest was small, so have the client log in and read the figure off. Who signed for the loan matters: a parent paying a loan that is only in the child's name is not treated like one who is legally bound to repay it. The deduction does not depend on itemizing but shrinks as income rises, so check the current limits.

Why ask it

Some contributions for last year can still be made up to the filing deadline, so the answer can change a year that has otherwise closed. Check eligibility before you suggest it: income, a workplace plan and the type of health coverage all bear on it. The account's year-end statement settles which year a deposit was assigned to, which clients often get wrong.

Why ask it

A bank export, a spreadsheet or a folder of receipts is a good answer. 'About two thousand for supplies' is an estimate, and a return built on estimates leaves you both exposed. Go category by category, and look for personal spending that ran through the same account.

Why ask it

A log made during the year, with dates, destinations and purpose, is what holds up; a total reconstructed in your office in March does not. Take the odometer readings for the start and end of the year. Then ask how they get to their regular workplace, because commuting miles are the ones clients most want to count and generally cannot.

Why ask it

'Only' is the word that decides it. A desk in a room where the family also watches television usually fails the test, and under current federal rules the deduction is generally for the self-employed, not for employees working from home. If the space qualifies, measure it and the whole home, and mention that the claim can have a consequence when the house is sold.

Why ask it

The federal credits in this area have been rewritten and cut back more than once, and the date of purchase or installation can decide everything. Look up the rule for the exact year before you say yes or no. You will want the invoice, the manufacturer's statement and, for a vehicle, whatever the dealer supplied at the sale.

Why ask it

It is the residency question asked a second way, so say why you are asking: the child credits depend on where the child lived for more than half the year. A relaxed 'ours, same as always' is a good answer. If the records would show another address, hear the story, ask what else shows the child lived with the client, and write down both the question and the reply.

Why ask it

When unmarried parents share a home with the child, only one of them can claim that child, and picking the larger refund is not the whole test. Check that the parent who claims meets each credit's own conditions, and read the tie-breaker rules for what happens if both file. You need both incomes and who paid the household costs, and if the client hesitates over whether the other parent really lives there, ask where that person sleeps and gets mail.

Why ask it

This is for the married client who wants head of household. The status is open to some married people who lived apart, and the second half of the year is the period the test looks at. A spouse away for work, military service or a hospital stay has not moved out, so ask why they were gone, the date they left and where they went.

Why ask it

For a son or daughter it is a birth certificate. For a niece, a grandchild or a stepchild it is a chain of them, a marriage certificate or a placement letter from an agency. A client who can name the papers is on firm ground, and one who says the child is 'like a nephew' has just told you the relationship these credits require may not be there.

Why ask it

Say first that you ask everyone whose numbers look like this. Savings, help from family, benefits, a partner's wages and student loans are all ordinary answers, and each belongs in your notes. If the real answer is cash work nobody has mentioned, this is when it comes out, and it changes both the income and the credit.

Why ask it

Ask it when self-employment income arrives with no forms and no expenses, or with a profit that happens to sit where the earned income credit is largest. A working hairdresser or landscaper can describe a normal week, say what they charge and produce something, and will have had costs, so ask for those too. Record what you saw; if the client has nothing to show, you can decline to put the figure on a return you sign.

Why ask it

A past denial can mean an extra form has to go with the next claim, and in some cases a waiting period before the credit can be claimed at all. Read the letter itself, not the client's summary of it. A refund that arrived in the end does not settle it: the letter says whether the credit was allowed or cut.

Why ask it

The larger education credit is available for a limited number of years per student, and the count follows the student from one parent's return to the other's. Enrollment matters too: whether the student was at least half time, and how much college they had finished before the year began. Prior returns answer this better than memory does.

Why ask it

Reading it back gives the client a clean chance to correct something said in a hurry, and it leaves you with notes made at the time, which is what the due diligence rules expect you to keep. Date them. If a correction changes the result, rerun it in front of the client so the reason is plain.

Why ask it

The prior return carries losses, depreciation and credits forward that you cannot rebuild from this year's papers, and it doubles as a checklist of forms that should be arriving again. With a new client, read it for errors as well as for facts, and ask why they left the last preparer, since a quarrel over what could be claimed tells you what is coming. If they cannot produce it, an IRS transcript is the fallback.

Why ask it

You want the letter itself. 'Something about my refund' can turn out to be a math correction, an identity check or the opening of an examination. Note the response date on it before anything else, and say whether dealing with it is inside your fee.

Why ask it

Certain past-due debts can be taken out of a refund before the client ever sees it. Raise it before you say a refund figure aloud, and certainly before any arrangement that pays your fee out of the refund. A client surprised by an offset tends to blame the preparer.

Why ask it

Ask it flatly, as routine. A missing year can hold up a current refund or sit under a balance that keeps growing, and most clients are relieved to have said it. Find out which years, whether the wage forms still exist and whether letters have come, then decide if catching up is work you take on or refer.

Why ask it

Take dates and amounts from bank records or the agency's online account, not from memory. A payment the client forgot produces a notice about an overpayment, and one they remember but never made produces a bill with interest. State payments are a separate question, so ask it separately.

Why ask it

The IRS issues a new PIN each year to people in the program, and a return e-filed without the current one is rejected; clients keep last year's letter and bring that. If someone has already filed under their number this year, the return may have to go on paper with an identity theft affidavit. The wait is usually long, so say so now.

Why ask it

Take the routing and account numbers from a check or a bank document and have the client confirm them on the screen. A refund belongs in the client's own account, never in one of yours. If a balance is due instead, ask in the same breath how they plan to pay it, because a client who cannot pay needs to hear about payment arrangements before the deadline, not after it.

Why ask it

The federal return has a box where the client can name someone the IRS may contact while it processes that return. It is far narrower than a power of attorney, so spell out its limits before the client agrees. Some clients want every contact to come to them, and that choice is theirs.

Why ask it

The client signs that the return is true, so they should be able to say where the main numbers came from. Point to the total income, the tax and the refund or balance in turn, and wait at each one. If the result is far from last year's, explain why without waiting to be asked.