The 7-step workflow at a glance
| Step | What happens | Done when |
|---|---|---|
| 1. Book and agree | Schedule the client, send the intake form and checklist, agree on the fee | Fee agreement and consents signed |
| 2. Collect documents | Client uploads or brings documents; you check against the checklist | Nothing missing |
| 3. Prepare | Enter the return; note open questions | Draft complete |
| 4. Review | Second look for errors; due diligence for credits | Reviewer signs off |
| 5. Client review and sign | Client reviews the return and signs Form 8879 | Signed 8879 on file |
| 6. E-file and acknowledge | Transmit; check the IRS acknowledgment; fix rejects | Federal and state accepted |
| 7. Deliver and file away | Complete copy to the client; records kept | Return closed |
Steps 1–2: intake and documents
Most delays start at intake. Send every client an intake form and document checklist when they book, agree on the fee in writing before you start, and get any Section 7216 consents you need, for example to share information with a bank for a refund product. Collect documents through a secure portal, not regular email. Copy our tax client intake form template.
Steps 3–4: preparation and review
Prepare from the documents, not from memory, and keep a running list of questions instead of guessing. Then review. In a one-person office, review after a break, against the prior year's return. In a larger office, a second preparer reviews. Watch for changes from last year, missing income documents and math that doesn't tie.
If the return claims the Earned Income Credit, Child Tax Credit or Additional Child Tax Credit, Credit for Other Dependents, American Opportunity Tax Credit or head of household status, the paid preparer due diligence rules apply: ask the required questions, complete Form 8867 and keep your records.
Step 5: client review and Form 8879
Walk the client through the return, including the refund or balance due and your fee. Under IRS Publication 1345, the client must sign and date Form 8879 before you originate the electronic return. Electronic signatures are allowed if your software supports them, with identity verification for remote signers. Keep Form 8879 for three years from the return due date or the IRS received date, whichever is later.
Step 6: e-file, acknowledgments and rejects
- Check acknowledgments daily. The IRS accepts or rejects every return. Publication 1345 says EROs should check acknowledgment records regularly and follow up on issues.
- Rejected returns aren't filed. The acknowledgment gives a business rule explaining why. Fix and retransmit quickly.
- When you can retransmit without new signatures: if the correction changes total income or AGI by no more than $50, or total tax, withholding, the refund or the amount owed by no more than $14. Larger changes need new authorization.
- If you can't fix a reject, Publication 1345 says you must take reasonable steps to tell the taxpayer within 24 hours that the return wasn't filed.
- State returns linked to a federal return can't be accepted until the federal return is.
Step 7: deliver and keep records
Give the client a complete copy of the return. Publication 1345 requires EROs to provide one, on paper or electronically. Keep the signed Form 8879, the acknowledgment with the Submission ID, and your due diligence records. Then mark the return closed in your tracker.
Track every return's status
In peak weeks, an office can have dozens of returns in different stages. Track each one with a simple status: waiting on documents, ready to prepare, in review, waiting on signature, filed, accepted, rejected. Most professional tax software includes a return tracker and client portal, so the status lives in one place.
Partner offices with us get professional software with built-in tracking, e-signatures and secure upload, plus training on the workflow before January and support in season, with $0 upfront. See how we work.
Common questions
What are the steps in tax preparation?
Book the client and agree on the fee, collect documents, prepare the return, review it (including due diligence for credits), have the client review and sign Form 8879, e-file and check the acknowledgment, then deliver a complete copy and keep your records.
When does the client sign Form 8879?
After reviewing the completed return and before you transmit it. IRS Publication 1345 says the taxpayer must sign and date Form 8879 before the ERO originates the electronic return.
What happens when an e-filed return is rejected?
A rejected return is not filed. The acknowledgment explains why. Fix and retransmit; small corrections within the IRS's $50 and $14 limits don't need new signatures. If you can't fix it, tell the taxpayer within 24 hours.
How long should a tax preparer keep records?
Keep Form 8879 for three years from the return due date or the IRS received date, whichever is later, and keep your due diligence records as the IRS requires. Many offices keep complete client files longer.