Tax Pro Here: What Am I Missing on This Client Tax Information Form?

Do you think it's worth having a separate section specifically for self-employed people? Like their business income, expenses, home office, etc? I find clients get confused about what qualifies as a legitimate business expense vs personal.

Absolutely! For self-employed clients, I'd create a supplemental page that breaks down Schedule C categories in plain language. Include specific sections for home office (with square footage calculations), vehicle expenses (with mileage log reminders), inventory if applicable, and business asset purchases. I also recommend including examples of what qualifies as a legitimate business expense versus personal. Many clients don't realize things like business insurance, professional development, or certain software subscriptions are fully deductible, while other expenses might be partially business/personal and need allocation.

Does it work with handwritten forms? My older clients still fill out my questionnaires by hand and sometimes I can barely read their writing.

I'm interested but skeptical. How does it handle less common forms? I have clients with foreign income, K-1s from partnerships, and some with rental properties. Would it recognize all those different scenarios?

Yes, it actually does work with handwritten forms, though the clearer the handwriting, the better the results. For really messy handwriting, it will flag items for you to verify. For uncommon forms, I've been really impressed with the range it handles. It definitely recognizes K-1s, Schedule E for rental properties, and foreign income forms like 1116 and 2555. I have a client with a complicated multi-tier partnership structure, and it handled all the K-1s perfectly. The system is trained on virtually every IRS form and even recognizes many state-specific forms.

How exactly does this work? Do they just call the IRS for you? I'm confused because I thought the wait times were unavoidable.

This sounds too good to be true. I've spent literally 3+ hours on hold with the IRS before. If there was a way around it, wouldn't everyone be using it? What's the catch?

They use an automated system that navigates the IRS phone tree and waits on hold for you. When an agent finally picks up, you get a call connecting you directly to that agent. You're not skipping the line - the service is just waiting on hold so you don't have to. The catch is that you still need all your information ready when you get connected. The IRS still has the same staffing issues, but instead of you actively waiting on hold for hours, you can go about your day until an agent is available. I've found it especially useful during tax season when my time is already stretched thin.

That's a great idea about the checkbox for credits! I definitely find clients often don't know what they qualify for. How do you handle situations where clients received advance premium tax credits but don't know the amounts? That's a struggle I have every year.

I require clients to bring their 1095-A forms or download them during our meeting. The Marketplace should have sent these forms, but many clients overlook them or don't understand their importance. For clients who received advance premium tax credits but don't know the amounts, I have them create or log into their Healthcare.gov account (or state exchange) during our meeting where they can download their 1095-A immediately. This saves the back-and-forth of having to reschedule because of missing documentation. I also explain that without this form, we can't complete their return accurately, and they could end up owing money back if we guess wrong.

I specifically ask "Did you buy, sell, receive as payment, or exchange any virtual currency (including Bitcoin, Ethereum, NFTs, etc.)?" and then give examples: "This includes using crypto to buy things, converting between different cryptocurrencies, receiving it as payment for goods/services, or mining/staking rewards." The examples seem to jog their memory better than just asking about "cryptocurrency transactions.