The Complete Paperless 1040 Tax Process
This document is designed to go through the complete Paperless 1040 Tax Preparation process. This
document will describe and cover the full process of doing a 1040 tax return including:
1. Organizer Delivery
2. Using SurePrep for Document Organization
3. Paperless Preparation of the Tax Return
4. Delivery of Documents / Signing 8879 / Payment of Invoice.
Also included in this document is additional information related to how RootWorks uses Practice CS to manage
a tax process.
Table of Contents
Organizers ............................................................................................................................................................. 2
Sending the Organizers from FileCabinet CS ......................................................................................................... 2
Modifying the Email Communication............................................................................................. 5
Scanning ................................................................................................................................................................. 6
SurePrep Setup Prior to Scanning ............................................................................................................................. 7
Step 1: Check In Documents and Scan ...................................................................................................................... 7
Step 2: Review Scanned Documents ......................................................................................................................12
Return Preparation/Review ........................................................................................................................ 16
Levels of Preparation ...................................................................................................................................................16
Finalizing the Tax Return ............................................................................................................................. 16
Setting Documents to Print on Paper to Create Action Items .......................................................................16
Preparing Final Client Documents ..........................................................................................................................18
Final Processing and Post Delivery Admin ............................................................................................. 21
What the Client Will See ..............................................................................................................................................22
Administration of the Final Process .......................................................................................................................23
Recommended Setup for FileCabinet .....................................................................................................................23
The Complete Paperless 1040 Process 1
Organizers
We should all plan to deliver the Organizers electronically (yes, except for those clients that don’t have computers
or email addresses, etc.) The preferred method to accomplish this is using a portal for delivery. While the portal
is typically thought of as a place for a client to enter their information, we can use it as an electronic delivery
mechanism. This mechanism will allow the client to log directly into their organizer and print it just the same as
if you had emailed them a PDF.
Keep in mind that e-mail is slowly becoming a bad idea for delivery of any tax information. This is due to many
states having existing laws or pending legislation restricting sensitive information from being emailed to
clients. This is another reason why we recommend using portals as the preferred delivery method.
There are two methods for getting PDF’s to the portal for Organizers. One option is via UltraTax CS directly to
the portal. The second option is via FileCabinet. RootWorks suggests using FileCabinet to transmit
Organizers. This was due to the inconsistencies created by sending organizers directly from UltraTax.
Sending the Organizers from FileCabinet CS
Again this is RootWorks preferred method for sending Organizers to the portal. Follow the steps below to
accomplish sending the Organizers via FileCabinet.
1. Make sure all clients are set to Paper Delivery for Organizers
a. Open UltraTax CS
b. Click on Utilities / Reassign Clients
c. Click Select All to select all clients
d. Change the Category to Organizer Delivery and the field below for Organizer to Paper
e. Click Reassign
The Complete Paperless 1040 Process 2
2. Print all clients organizers to FileCabinet
a. Click on File / Print Organizers
b. Uncheck Printer and Check FileCabinet CS
c. Click the Clients button to the right
d. Click Select All to select all Clients and click OK
e. Click To Cabinet
NOTE: Based on the number of clients selected, the process can take a while. Try to use a
computer that is not in use or do over a weekend.
3. Select all clients “drawers” in FileCabinet CS to be NetClient CS Contributors
a. Open FileCabinet CS
b. Click on Setup / System Configuration / NetClient CS
c. Click on Select Drawers
d. Click Select All to select all drawers
e. Click on Assign drawers to be Contributors of NetClient CS
f.
Click Reassign
The Complete Paperless 1040 Process 3
4. “Tag” the organizer to send it to the portal. This is done one of two ways:
a. Option 1: If you do not store documents in the automatically created UltraTax CS folder in
FileCabinet, then you can globally select the UltraTax CS Folder to transmit to the portal
i. Click on Setup / System Configuration/NetClient CS
ii. Check the UltraTax CS folder for 12/31/14
b. Option 2: If you do store documents in the UltraTax CS folder, then you need to:
i. Right click on the Organizer in FileCabinet CS
ii. Choose Document Properties
iii. Click on NetClient CS
5. Transmit the documents to the portal
a. Click on File / NetClient CS
b. Select the dropdown arrow next to the Select Button and choose Select Changed
c. Click Connect and then click Call Now
The Complete Paperless 1040 Process 4
Modifying the Email Communication
The email we send to the client is generated via Constant Contact.
Your Client Organizer is the important first step in analyzing your tax
position for the year. Our online version is designed to help you quickly
and conveniently provide us with critical information to maximize your
deductions and minimize the hassles.
Here's how to complete yours:
How to Access your Client Organizer
Follow the steps below to access and print your 2012 tax
organizer via our Client Center at www.root.com
We take the security of your
personal information seriously. In
today's world, mail and email are
becoming less and less
secure. With that in mind, we are
making your 2012 tax organizer
available via our Online Client
Access Portal.
Step 1: Login
1. Go to www.root.com
2. In the Client Center, select Client
Login (Your email address is your
Follow the steps to the right to
access your 2012 client
organizer.
If you have any questions,
please contact Cynthia at our
office.
812.332.7200.
Username)
3. Click Login
Note: If you forgot your password, click the
forgot password link.
Remember: Your 'Login' is your email
address.
Step 2: Select and Print
[email protected]
1) Click Your
Sincerely,
name on the left and open the Tax Returns
Folder, then select 12/31/12
M. Darren Root, CPA.CITP
The Complete Paperless 1040 Process 5
2) Click on the Client
Organizer and Print and return
Step 3: Deliver
Gather your source documents
and deliver to the office.
or,
Scan and Upload them,
along with your organizer, using
'Document Exchange'.
Scanning
Scanning another widely talked about process in firms. A truly paperless tax process involves scanning when
hardcopy documents come in the door. Using technology we can have our documents recognized, organized
and work from the scanned documents. There are currently three companies in the market (SurePrep, Drake GruntWorx, and Thomson Reuters) that provide this technology. Rootworks has evaluated all three and
recommend using SurePrep. RootWorks has found that the tools and the functionality of SurePrep to work
best for a smooth workflow. This includes the integration between SurePrep and UltraTax CS.
However, if you are processing very basic returns, then using the direct scan function that is available in
FileCabinet CS should fulfill your needs. RootWorks recommends using Fujitsu FI-6130z and FI-6140 scanners.
The Complete Paperless 1040 Process 6
SurePrep Setup Prior to Scanning
There are some steps that need to be taken before actually doing the scan process. SurePrep support will assist
you with this initial setup.
1. Prior to scanning staff will create a folder on their desktops called ‘Year’ Scanning. Inside this folder,
create another folder called Source files. All of the originally scanned documents, before they are
processed and organized by the software, are stored in the Source Files folder.
2. Set up the following folder structure on your server
3. The ‘1040scan20xx.msi’ installation file will need to be run on each workstation to install the
1040Scan application. This application can only be installed and run on a PC, not a Mac.
4. You must add sureprep.com to your listed of trusted sites in your web browser. In Internet Explorer,
go to Tools \ Internet Options \ Security \ Trusted sites.
Step 1: Check In Documents and Scan
1. When a client drops off documents, the person receiving the documents (Admin person, etc.) should
Update the Project in Practice CS to Received. To do this, go to the Client Dashboard, right click on
the project and select Received Selected Projects. This process then starts task number 1 of the
project which should be Scanning.
2. After marking the project received, you will need to print the tax routing sheeting. To do this, right
click on the project, click on Preview Routing Sheets for Selected Projects and click Preview (you
may need to first click select report to have the right one selected).
3. Prior to scanning RootWorks recommends looking through the documents that come in and
removing any items that are definitely not part of the return. Also separate the documents into two
groups for the scanning process:
The Complete Paperless 1040 Process 7
a. Double sided documents
b. Single sided documents
4. Open Adobe Acrobat (RootWorks currently uses Adobe Standard) and choose Document \ Scan to
PDF \ Custom Scan. The Custom Scan screen lets you choose either Both Sides or just Front Sides to
scan.
a. If the group of documents you are scanning in is double sided, be sure to select Both Sides
b. If the group of documents you are scanning in is single sided select Front Sides.
NOTE: In the screen capture above the documents are being appended to the file that is
currently being processed. This option should be selected when you are scanning in multiple
groups (single & double sided) that belong in the same document.
5. The name of the PDF MUST be the client ID of the client in UltraTax CS if you plan to integrate it
with UltraTax.
6. Launch the 1040Scan application from your desktop and log in.
The Complete Paperless 1040 Process 8
7. The Create New Job window will open.
a) The first time using 1040Scan only: Select the Return type, Tax Software, and Service.
RootWorks recommends using the 1040Scan Organize option. An example of RootWorks’
selections is shown below.
b) Click the Browse button to locate the source files that were scanned in through Adobe and
stored in your Source files folder. As mentioned above, it is critical that the source file name
matches the UltraTax Client ID – this is how SurePrep pulls information from that particular
client’s return.
The Complete Paperless 1040 Process 9
c)
In the screen shot below, two files have been selected.
 CRO2928.pdf – this is the primary set of source documents. It is named after the
client’s Client ID in UltraTax. The OCR box is checked – this tells SurePrep to organize
and bookmark the PDF.
 Crowe nonstandard.pdf – this is a secondary and optional file that contains what the
preparer knows to be items that SurePrep will not recognize. The OCR box is not
checked as the preparer does not want SurePrep to attempt to bookmark the files.
d) The ‘Select tax return’ section should point to the location of your UltraTax CS program.
Browse to the client’s data folder inside the UltraTax data directory (for UltraTax 2010, look
for the UT10Data folder) and select the data file with the .ZP0 file extension.
e) In the Assign New Owner section, select the preparer of the return. Mark Email Owner when
job is ready for review so the preparer is automatically emailed once SurePrep has processed
the documents.
The Complete Paperless 1040 Process 10
f)
At the bottom of the screen, click Submit to upload the file or files to SurePrep. If you are
adding multiple sets of source files before uploading, click Add To Queue for each set of
items until you are ready to submit them
g) SurePrep will email the assigned person once the documents have been processed.
RootWorks has experienced a turnaround time in the 10 – 15 minute range. Below is an
example of the email the preparer will receive.
NOTE: RootWorks recommends that the person assigned is typically the person scanning the
documents which is our Admin person.
8. The Admin person then Opens FileCabinet CS and clicks on Insert / Object and inserts the clients
PDF for basic clients. For more detailed clients the Preparer Assigned will follow Step 2 below.
9. The Admin person then Opens Practice CS and then Marks the Scanning Task Complete and moves
it the preparation task.
10. At this point the partners will often monitor any open projects in the preparation stage and make sure
a staff is assigned the project.
The Complete Paperless 1040 Process 11
Step 2: Review Scanned Documents
Once the documents have been scanned through the SurePrep system, RootWorks recommends having
someone knowledgeable with the tax documents (Such as Assigned Preparer, Knowledgeable Admin Staff, etc.)
review the processed documents before beginning to prepare the tax return.
Once the email above has been received, do the following to review the documents:
1. Once SurePrep has processed the documents, those documents are listed as ‘Jobs Pending Review’.
2. Highlight a pending job and click the Review button.
3. The 1040Scan Review Wizard will open. The Review Wizard lets you correct errors and better
organize source documents based upon the activities and information in the current UltraTax return.
The Complete Paperless 1040 Process 12
4. Click Next to proceed with reviewing and organizing the processed documents.
The 1040Scan Review Wizard will open at this point
The 1040Scan Review Wizard is a multi-step process that allows the reviewer of the organized
documents to better organize them in advance of preparing the tax return. The organization that is
done is ‘remembered’ by SurePrep so that when the return is prepared in future years, only new and
unrecognized documents need to be organized.
5. You must verify that documents are named properly and delete documents that are not needed. In
the screenshot below SurePrep is asking the preparer to review the payer’s name on a 1099-Misc
a. Mark the ‘X’ Checkbox to delete the document if it is not needed
b. Enter the correct name of the document if it has not been named correctly
c. Mark the Checkbox at the right to accept the entered value
6. If SurePrep recognizes that Duplicate Documents have been scanned, which RootWorks’ staff have
seen when W2s or 1099-Misc forms have been scanned in (where there are duplicate copies for Federal
and state), you can choose to only bookmark the relevant copy of the documents. If there are no
duplicate documents, this step is skipped.
7. If a source document may be Associated with Multiple Forms on the Tax Return, SurePrep gives
you the opportunity to associate the document with that activity. SurePrep will remember this
association on future years’ tax returns. If child forms are not associated to specific parent forms, by
default they are associated with Schedule A.
Example: If you have a 1098-E that has to go to a Schedule E, Schedule F, etc. instead of schedule A,
you can assign it where you want it to go:
The Complete Paperless 1040 Process 13
8. SurePrep matches scanned documents to the associated activities in the tax return, which are pulled
from the information in the UltraTax file. If a client has a New Documents (a W2 from a new job this
year, as an example), SurePrep will not find information for that employer in the UltraTax file, so this
document will be listed as ‘Unmatched’. Use the New Form Review window to drag documents from
the right to the window on the left to associate them with the correct input screen in UltraTax.
9. Once you are done with the 1040Scan Review Wizard, you have two options on how to proceed as
you finish the document organization process and begin the tax return preparation process.
a. Option 1: You may choose to create a 1040Scan PDF, which is simply a PDF document
generated from SurePrep.
b. Option 2: You may choose the SPE Lite option. SurePrep refers to this option as the SurePrep
Binder. Their recommendation is to prepare the return from the SurePrep Binder.
NOTE: RootWorks recommends using the SPE Lite (SurePrep Binder) option. The following steps
will show creating the SurePrep Binder
10. Select Create SPE Lite (see the screen shot below) and click Finish
The Complete Paperless 1040 Process 14
11. In the binder, if there are any un-bookmarked pages, which are pages that SurePrep was not able to
identify at all (such as hand-written items, spreadsheets, and any other items the system just didn’t
recognize), you can associate the un-bookmarked documents by dragging them to the appropriate
location on the left.
12. Use the Binder to better organize documents by dragging them in the window on the left to their
appropriate place.
Example: RootWorks sends the questionnaire from the UltraTax CS organizer to clients. The
questionnaire has multiple pages. Sometimes SurePrep doesn’t recognize the second or third page
of the organizer. So, RootWorks staff can drag these organizer pages and put them after page 1 of
the organizer.
13. Once you are done organizing the document, click Create SPE Lite PDF.
14. SurePrep will place the PDF into the 1040Scan PDF folder on the server
The Complete Paperless 1040 Process 15
Return Preparation/Review
Once documents are scanned you are now ready to prepare the return. To truly have a paperless process we
recommend having documents on one screen and UltraTax CS on the other screen. RootWorks recommends
that preparers use the scanned documents in the Binder that SurePrep created for preparation of the return.
However, alternative options such as using documents scanned into FileCabinet CS or using paper copies
during paperless transition have been used by some firms. RootWorks recommends using the scanned
documents to realize the full potential of a paperless process.
Levels of Preparation
RootWorks recommends using levels for 1040 projects.
Example: Level 1 and Level 2 returns are prepared in the firm, where Level 3 returns are prepared by an outside
firm. The reason for this is to help determine what the firm is good at along with time spent. Level 3 returns do
not fit in the RootWorks model.
Level 1 returns do not involve a formal review while Level 2 returns do go through a review process. To accomplish
having the two levels, RootWorks recommends two 1040 templates for projects in Practice CS.
When preparation is complete, the preparer marks the Preparation Step in Practice CS Complete. At this
point Level 1 returns go directly to the Administrator to e-file the return and Level 2 returns go through a formal
review.
Finalizing the Tax Return
Once the return is prepared / reviewed it now is ready to be:
1. Electronically Filed
2. Delivered to the Clients Portal
3. Actionable Items Delivered to the Portal
4. Stored in FileCabinet CS
5. Marked Complete in UltraTax.
This section will guide you through proper setup to accomplish this as well as discuss RootWorks recommended
best practices. RootWorks recommends printing items such as Payment Vouchers and Estimates with
Instructions to both the client’s portal and on paper when applicable.
Setting Documents to Print on Paper to Create Action Items
You may want to print Balance Due Vouchers and Federal and State Estimates along with the 8879 to the
client’s portal as well as to paper when applicable. To set the forms you need to print to paper follow the
instructions below.
NOTE: If you are in a state that has locals that cannot be e-filed or certain state returns that cannot be e-filed you
may also want to print these on paper with instructions for the client.
1. Open UltraTax CS
2. Click on Setup / 1040 Individual and then click on the Tax Return button on the Federal / Or State (ex.
Indiana) Tab
The Complete Paperless 1040 Process 16
3. Click on the Preparer Tab
4. Select the documents you want to print on paper and click on “Print on Paper when Storing in
FileCabinet CS”
NOTE: For State Returns / Local Returns in UltraTax CS that are not electronically filed, this Checkbox is
already marked, however you may want to make adjustments to what you actually want to print out.
The Complete Paperless 1040 Process 17
Preparing Final Client Documents
Follow the steps below to successfully deliver the Tax Return, Actionable Items, Paper Copies (when
necessary) and prepare the Invoice.
1. When finished with the return click on File / Print Returns
2. Select the appropriate Printer and FileCabinet CS location.
3. Click on Government copy, Create electronic file, Preparer copy, Paper, and FileCabinet CS
4. Mark the Status to Completed (if you use the UltraTax CS Status system) at the bottom
5. Click Print
6. After doing this step, go back to File / Print Returns
The Complete Paperless 1040 Process 18
7. Select Adobe PDF as your printer and mark Preparer copy, Paper, and FileCabinet CS
The Complete Paperless 1040 Process 19
8. Click Print
9. Because we selected Adobe PDF as the printer, all the items we selected to Print on Paper storing in
FCS, will print to one PDF and we will use this for ‘Action Items’ on the portal. Save the PDF to the
Desktop
NOTE: Because we are printing to PDF you may need to go back and print to your printer if you plan
to print any documents to paper.
10. Open FileCabinet CS
11. Click on Object / Create from File
12. Browse to the PDF that was created and put it in a folder called Client Action Required.
NOTE: You can also Drag and Drop the Document. If you Drag and Drop it, be sure to use the
option.
13. In FileCabinet CS, Drag the US Tax Return (and your state tax return) to NetClient CS. See below
for our recommended setup for NetClient CS within FileCabinet CS.
14. Also in FileCabinet CS, go to Object / Create from File and import the SurePrep File for this client in
the Client Source Documents Folder
15. In Practice CS, prepare the invoice but do not hit Print, just hit Save.
The Complete Paperless 1040 Process 20
Final Processing and Post Delivery Admin
This section covers what happens after the preparer / review has prepared the return for final processing. The
task in Practice should be completed and should be routed to the Administrative person who does the final
processing.
1. In Practice CS mark the current task complete to route to the processor
2. The Processor should then verify all items have been put in FileCabinet CS, then transmit them to the
portal by going to File / NetClient CS, choosing the client and transmitting
3. In Practice CS, go to the Print Invoices & Statements, select the invoice and choose to email.
RootWorks recommends using an email similar to the following for sending to clients:
Dear Stan & Marjorie:
Your tax returns are complete and available for your review and signature via our Online Client Access
Center. To login, follow these steps:
1. Go to www.rootworks.com and login through our Client Center using the login credential established for
you. (Reminder: Your username is your email address. If you are unable to recall your password, please
click on the ‘forgot password’ link).
You may also view your returns securely on your mobile device, if you have downloaded and installed the
NetClientCS app, available on the App Store (for Apple devices) and Google Play (for Android devices.
2. Once logged in, click on your name on the left side of the screen to access your tax information.
3. Your tax return is available for your review in the Tax Returns Folder.
4. Your source documents are available in the Client Source Documents Folder.
The Complete Paperless 1040 Process 21
Please review your return. If there are no changes necessary, go to the Client Action Required Folder, print all
documents, sign where indicated and return Form 8879 and IT-8879 to our office as soon as possible so that we
can e-File your return.
If you prefer to stop by the office, we have the e-file forms (Form 8879 and IT-8879) printed and available for
signature.
A copy of your invoice is attached for your convenience. Please contact our office if you have any questions.
Thank you for selecting RootWorks LLC to prepare your tax returns.
What the Client Will See
Once the client receives their email they will be pointed to the Client Center on your website. Use this section
as a guide for knowing exactly the process the client will use after they receive the email.
1. Client will click on the link to your website and Access the Client Center
2. The client selects their Individual name on the left pane under Documents. The following folders are
then visible.
The Complete Paperless 1040 Process 22
3. The client can then mail a check or pay the fees via PayPal through your website under Pay Your Fees.
RootWorks recommends signing the firm up for a business PayPal to administer payments.
4. We then recommend setting up a File Exchange Folder for 8879’s for clients that will scan and upload
their file.
Administration of the Final Process
The person who oversees the Electronic Filing process should be monitoring any open E-filing tasks in Practice
CS to ensure they are being returned. This list will also show in UltraTax CS under the CS Connect Electronic
Filing Tab as they haven’t been sent due to not receiving the 8879. Once the 8879 is received the return should
be transmitted through CS Connect in UltraTax. Once the return is accepted, the final task in Practice CS
should be marked Complete.
Recommended Setup for FileCabinet
It is recommended that you setup two folders for tax purposes in FileCabinet CS. The two folders are Client
Source Documents and Client Action Required. Those folders should have a check next to them under Setup /
System Configuration / NetClient CS to automatically have them ready to be added to the portal.
Do Not check the box next to UltraTax CS if you put documents in that folder that you do not want
automatically transmitted. If you do store documents other than items you want the client to receive on the
portal, drag the documents to the NetClient CS icon in the client drawer. Again, If you do not store other things
in the UltraTax CS folder, then it will not be a problem to globally check the box under Setup / System
Configuration / NetClient CS.
The Complete Paperless 1040 Process 23