13 – Preliminary Work to Prepare Tax Returns

This refers to the initial steps and groundwork that must be done before actually filing a tax return. It usually includes:

🔹 Collecting Documents – W-2s, 1099s, bank interest statements, mortgage interest (Form 1098), investment statements, etc.

🔹 Organizing Income Records – Wages, self-employment, rental income, dividends, capital gains, Social Security, unemployment.

🔹 Gathering Deduction Records – Medical expenses, charitable contributions, student loan interest, property tax, retirement contributions.

🔹 Checking Tax Credits Eligibility – Education credits, child tax credit, earned income credit, energy credits.

🔹 Reconciling Payments & Withholding – Federal/state withholding, estimated tax payments, extension payments.

🔹 Choosing Filing Status & Dependents – Single, Married, Head of Household, etc.

🔹 Reviewing Prior Year Return – To carry forward unused credits/losses (e.g., capital loss carryover, NOL).

👉 In short: Preliminary work = gathering and organizing all financial records to ensure accuracy in tax return preparation.