run-return-preparation-workflow

name

run-return-preparation-workflow

description

Run a return from organizer through e-file by traversing the practice decision tree (organizer & completeness check → entity→form routing: 1040 / 1120 / 1120-S / 1065 → preparation & schedules → self-review vs a separate-reviewer gate → e-file & acknowledgment → extensions 4868/7004 & quarterly estimates), then return the prepared return, the completeness gaps, the review findings, the e-file path, and any extension/estimate schedule. Reach for this when the user asks 'prepare this 1040 / 1120-S / 1065', 'which form does this entity file?', 'review this return before e-file', or 'file an extension and set quarterly estimates'. Used by tax-preparation-specialist (primary) and tax-practice-lead.

Skill: run-return-preparation-workflow

Invoked by: tax-preparation-specialist (primary — the intake→prep→review→e-file pipeline) and tax-practice-lead (to ground the review-standard and workflow policy in the real pipeline).

When to invoke: "prepare this 1040 / 1120 / 1120-S / 1065"; "which form does this entity file?"; "run the completeness check on this client's documents"; "review this return before e-file"; "file an extension (4868 / 7004)"; "set up quarterly estimates"; any "prepare and file this return" task.

Output: the prepared return (correct form + schedules) + the completeness gaps found + the self-review findings + the separate-reviewer sign-off gate + the e-file/acknowledgment path + any extension & quarterly-estimate schedule.

Procedure

1. Confirm the engagement, then drive the organizer. Verify the engagement letter is signed and scoped (see plan-engagement-and-capacity), then use the organizer to intake documents. This is the step before the step — a return prepped on an unsigned engagement is exposure.
2. Run the completeness check before you prepare. Reconcile the intake against the prior-year return and the expected schedules — every W-2, 1099 (INT/DIV/B/NEC/R), K-1, brokerage basis, and the entity's books. The missing basis figure or the un-received K-1 is found before prep, not at review — otherwise it's re-work or an amended return.
3. Route the entity to the form. Traverse the entity→form branch in ../../knowledge/tax-preparation-practice-decision-tree.md:
   • 1040 — individual, with Schedules A (itemized), B (interest/dividends), C (sole-prop), D (capital gains), E (rental/K-1 pass-through), SE (self-employment tax) as applicable.
   • 1120 — C-corp (entity-level tax).
   • 1120-S — S-corp: the K-1s to shareholders, and the reasonable-compensation question (wages before distributions).
   • 1065 — partnership: the K-1s to partners, and basis / at-risk / §704(b) capital accounts.
4. Prepare from the drivers, not the plug. Enter from source documents, tie each figure to its schedule, and reconcile the return to the books/organizer — so a review finding is diagnosable, not a hunt. Flag the judgment positions (a home-office allocation, a §199A/QBI determination, a basis limitation) for the reviewer, not buried.
5. Self-review, then hand to a separate reviewer — the hard gate. Run your own pass against ../../templates/return-review-and-efile-checklist.md (carryovers, prior-year comparison, e-file diagnostics, bank info, signatures/8879). Then route to a separate set of eyes for sign-off — self-review is not the review gate; the separate reviewer signs off before e-file, and complexity above your sign-off tier goes up.
6. E-file and track the acknowledgment. Collect the 8879 (e-file authorization) before transmitting, e-file under the firm's EFIN, and track the acknowledgment (accepted vs rejected — a rejected return is not a filed return). Reconcile any reject code and re-transmit.
7. Extensions and estimates — deliberately. If the deadline forces a rush, file the extension (4868 individual / 7004 business) and pay the estimated balance with it (an extension is to file, not to pay — interest and failure-to-pay penalty still run). Set quarterly estimates via the prior-year safe harbor (100%, or 110% for higher-income) or the annualized method, with the payment calendar and the underpayment-penalty exposure.

Worked example

User: "New client — an S-corp with one shareholder-employee and a rental on the side. Prepare and e-file."

• Engagement: confirm the signed letter covers the 1120-S and the shareholder's 1040 (two engagements or one scoped letter — not assumed).
• Completeness: organizer + prior-year 1120-S → intake the books, payroll (the W-2 for the shareholder), the fixed-asset/depreciation schedule, and the rental's income/expense + basis. Gap found: no reasonable-compensation support → request before prep.
• Form routing: 1120-S for the entity (K-1 to the shareholder), the shareholder's 1040 with Schedule E for both the K-1 pass-through and the rental, Schedule SE not triggered by S-corp distributions (that's the reasonable-comp point).
• Prepare: book the depreciation, tie the K-1 to the 1040 Schedule E, compute QBI/§199A on the pass-through (net of the reasonable-comp wages).
• Review: self-review the checklist, then the separate reviewer signs off on the reasonable-comp position and the QBI calc before e-file.
• E-file: 8879-S and 8879 collected; e-file both; track both acknowledgments.
• Estimates: set the shareholder's quarterly estimates on the S-corp income (safe harbor off the prior year) since there's no withholding on distributions.

Guardrails

• Confirm the engagement and run the completeness check before preparing — a return on incomplete data is re-work or an amended return.
• The form follows the entity — 1040 / 1120 / 1120-S / 1065 with the right schedules; a wrong form is a wrong return.
• Self-review is not the review gate — a separate set of eyes signs off before e-file; complexity above your tier goes up.
• A rejected e-file is not a filed return — collect the 8879, e-file under the EFIN, and track the acknowledgment to accepted.
• An extension is to file, not to pay — file the 4868/7004 to protect accuracy and pay the estimated balance with it; estimates use the safe-harbor or annualized method.
• Preparing/reviewing the return is the tax-preparation-specialist; the review-standard and workflow policy is the tax-practice-lead — keep the seam clean.
• This is not the books / monthly close (accounting-bookkeeping) and not tax, legal, or accounting advice. Forms, line numbers, thresholds, and deadlines are volatile — carry a retrieval date and verify against current IRS/state guidance before filing. See ../../knowledge/tax-preparation-practice-patterns-2026.md.