How to Switch Tax Preparers: What to Carry Over From Last Year’s Return, Step by Step

Your preparer is expensive, slow to answer, or doesn’t really understand your assets in Japan, yet you stay with them every year because switching sounds like a hassle. You’re not alone.

Switching is actually straightforward. What matters is carrying over last year’s information properly. This article walks through when to switch, what to ask your old preparer for, which carryovers to watch, and what to hand your new preparer.

The best time to switch

The smoothest time is after last year’s return is filed and before the next season begins, roughly summer through December. Firms fill up from January through April, so deciding before year-end helps. If this year’s return is already in progress, finish it with your current preparer and switch next year.

Step 1: Ask your old preparer for your records

Your past returns are your records. Under the IRS rules for tax professionals (Circular 230, §10.28), a practitioner must promptly return a client’s records that the client needs to meet their federal tax obligations when the client asks. Request:

• Copies of last year’s returns, ideally the last three years (federal and state, complete PDFs with every schedule and form)
• Depreciation schedules, if you own rental property or business assets
• Carryover worksheets (capital losses, foreign tax credits and so on)

If your old preparer is hard to reach, you can download a free tax return transcript from your IRS Online Account. A transcript shows the main figures only, though, not the detailed schedules or worksheets.

Step 2: Check the carryovers

The biggest risk in switching is losing amounts that carry forward to future years. If your new preparer doesn’t know about them, you can miss deductions and credits you’re entitled to.

Carryover	Where to find it
Capital loss carryover	Schedule D, Capital Loss Carryover Worksheet
Depreciation on rental property and business assets	Form 4562 and depreciation schedules
Suspended passive losses (e.g., rentals)	Form 8582
Foreign tax credit carryover	Form 1116 carryover schedule
Charitable contribution carryover	Schedule A worksheets
Net operating loss (NOL)	NOL worksheets
Prior-year overpayment applied to this year’s estimated tax	Last year’s Form 1040

Step 3: What to give your new preparer

• Last year’s returns (federal and state) and the carryover records above
• This year’s forms (W-2, 1099s, 1098 and so on)
• SSNs or ITINs and dates of birth for everyone on the return
• Bank routing and account numbers for your refund
• Any letters from the IRS or your state, and your IP PIN notice if you have one
• The highest balance during the year of each Japanese bank and brokerage account (for FBAR and Form 8938)

Step 4: Close things out with your old preparer

If your old preparer is on file with the IRS as your representative (Form 2848) or as an authorized recipient of your tax information (Form 8821), you can revoke that authorization if needed. A short note saying you’re using a different firm this year also prevents a duplicate filing.

Common worries

• I feel bad leaving. Tax preparation is a year-to-year engagement. Comparing price and service is normal.
• What if my new preparer finds an error on last year’s return? It can be corrected with an amended return (Form 1040-X) if needed.
• What about e-file identity verification? Signing an e-filed return can require last year’s AGI, so having a copy of last year’s return makes it easy.

Switch to us and save 50% on last year’s fee

With CLT NY INC.’s tax preparer switch campaign, you upload last year’s invoice and see this year’s fee right away: 50% off last year’s preparation fee (up to $500 off, first year only). An IRS Enrolled Agent reviews your carryovers so nothing gets lost. For typical fees, see How much does tax return preparation cost?.

This article provides general information and is not individual tax advice.