A Hidden Gem: How a Simple Typo Saved Our Client Thousands

This morning, I found myself in the middle of a tense client meeting concerning a possible IRS notice. In preparation for the discussion, I reviewed last year’s tax return workpapers to clarify some figures. As I navigated through the documentation, I stumbled upon an intriguing detail within our depreciation schedules.

Among the entries, I noticed a comment bubble stating “CHECK THIS!!!” attached to an asset listed with a substantial basis of $430,000. This note had been made by a staff member who departed from our firm six months ago. Curiosity piqued, I delved deeper and discovered that they had pointed out a potential mistake in the asset’s in-service date—a detail that had somehow slipped through the cracks during our review process.

To my surprise, the client had actually placed the asset into service in December 2022, rather than January 2023, as we had documented. This discrepancy meant that our client qualified for the full 100% bonus depreciation under the previous tax regulations, instead of receiving a reduced percentage due to the later in-service date.

I wasted no time in sharing this revelation with our client, who was elated to hear that an amended tax return would be filed. This adjustment is set to result in a remarkable $90,000 refund. It’s remarkable how a seemingly minor oversight—a note left amidst the hustle of busy season—profoundly impacted our client’s financial outcomes.

This experience reinforced my belief in the importance of meticulous documentation. Sometimes, the details that might appear trivial can lead to significant savings and truly demonstrate the value of our work.