Process of Outsourcing 1040 tax form preparation

Are you looking to outsource 1040 tax form preparation services to CPA firms? With the complexity of the US tax laws, there is a growing need for tax preparation outsourcing. India has great potential to offer top-notch quality services and save taxpayers from this monotonous process.

It’s that time of year again. Tax season is upon us, and it can be a tedious and overwhelming experience for many US taxpayers. To ease their burden and make sure everything is done accurately and on time, many CPA firm in India have started to offer tax preparation services in order to get the job done right.

In this blog post, we’ll discuss the ins and outs of how 1040 tax form preparation works, including what kind of documents an outsourcing tax firm requires for tax filing, and how to start the process.

1040 tax preparation

1. Access to the client’s documents and 2022 tax software:

We make sure that we have access to the required client’s documents and 2022 tax software. The documents provided by the client give accurate financial information which is essential for completing the 1040 form.

In addition, we make sure that our customers have a stress-free experience as much as possible by offering our tax consulting service to answer any questions they may have during the process.

2. Preparation starts when 75% of the tax documents are received.

How do we determine 75% received:

When last year’s tax return income and deduction sources are compared, that time if we have 75% of those income and deduction tax documents, we start working on it.

What are those tax documents?

For tax preparation outsourcing, the document that everyone is more familiar with is the 1040 form. This form is the main form for individual taxpayers and includes your personal information. It also includes details about your income and tax deductions.

It is important to note that some of these documents can come in several different forms, so you should check with your tax professional to find out what your tax situation requires.

Outsourced Tax preparation services may also involve documents such as:

Tax preparation

Wages – W-2

Interest – 1099-INT, bank statements

Dividend – 1099-DIV

Self-employment business income (Sch C) –

There are many financial reporting requirements that need to be met for self-employment business income. This includes preparing a Profit and Loss statement, Balance Sheet, Fixed Asset Additions report, accounting and more.

If you use a business vehicle for business purposes, you’ll need to provide business and total mileage reports, as well as any vehicle expenses such as tolls, parking fees, and interest.

In addition, if you use your home for business, you’ll need to document the home office area and home area information as well as interest on the home and any direct or indirect home expenses.

Rental Business Income (Sch E) –

For clients with rental properties, we ask for a profit and loss report or a property management report that has all the necessary rental income and related expenses information, such as utilities, maintenance, real estate taxes, and HOA fees. We also ask for any addition/improvement made during the year as well so that we can assist with timely depreciation.

Retirement/pension or annuities –

Form 1099-R – if the client has received any distribution.

With Form 1099-R, if the clients have received any distribution from their retirement or pension account, they must provide their details to our tax preparer. These details include information such as the amount received, whether taxes were withheld, and other specifics related to the distribution.

Social Security Benefits – 1099SSA

For those who had any Social Security income in the United States (including workers who paid self-employment tax on their earnings), the IRS requires you to report it using the form 1099SSA. This form allows you to claim all of your Social Security benefits as a tax deduction to reduce your tax bill.

Understanding these basics can save you money and prevent costly mistakes when it comes time for filing your taxes and accounting.

Pass Through Incomes – K-1s from Partnership or S Corp

If the client is a partner of a business, they’ll need to fill out a Schedule K-1 form from the partnership or S corporation. K-1 forms detail each partner’s share of income, deductions and credits for the tax year. This information needs to be reported on your 1040 form.

Safebooks global, your outsourced 1040 tax prep company can help you figure out how much each type of pass-through income should be reported on the 1040 form, as well as help you navigate the K-1s process.


Safebooks tax return preparers can help you identify expenses such as real estate taxes, child and dependent care expenses, contributions to an IRA, and sales taxes paid on the purchase of a new vehicle.


If the client has purchased an electric vehicle, they are eligible for a tax credit. So, a credit may be determined for any residential energy savings appliances purchased, such as insulated windows or solar rooftop systems. We require invoices and other documents to verify this.

outsourced Tax preparation services - Copy

3. Post documents are received:

When post documents are received, the necessary tax planning and paper work are prepared; otherwise they are submitted directly to the IRS (#4). If the books need to be shown to the tax authority for adjustments, typically for Schedule C clients.

4. Start data entry of the tax document:

In this step of 1040 tax form preparation outsourcing, we input the document into the appropriate tax software. Our experienced tax return preparer follows a systematized process to guarantee accuracy and an efficient workflow while preparing the tax return.

We check each and every detail like bank balances, investments, income receipts, capital gains/losses, and applicable credits to make sure nothing is left out.

5. Any further missing information required:

When the return is prepared, we send out a list of missing information or open items to the client. If nothing is missing, the tax return will be submitted for review by the CPA/Tax reviewer along with any applicable comments.

6. Client’s final review:

After the tax review is complete, and the return is found to be accurate, the return will be sent to the client for review. Afterward, the return is filed with both the IRS and the relevant state government.

In conclusion, outsourcing the 1040 tax form to India is a great way to save time and money, while making sure that all legal requirements are met. Outsourcing can help to improve the accuracy of your financial records, as well as provide a more efficient filing process.

It can be beneficial to work with experienced professionals who understand the tax codes both in the US and India. This can make the whole process smoother and more efficient.

Ready to outsource your tax return preparation services? Contact Safebooks Global today for a free consultation!