Complex Returns,
Prepared and Reviewed by a CPA.

Individual tax preparation at Pocket CPA covers federal Form 1040 and every supporting schedule, plus state and local returns for every state with a filing obligation. The service is built for filers with real complexity: equity compensation, multi-state allocation, rental property, investment income, and prior-year corrections. Every return is prepared or directly supervised by a licensed Certified Public Accountant. Work is performed in-house.

What This Service Includes

Individual tax preparation is the process of accurately reporting all of a taxpayer's income, deductions, credits, and supporting transactions on the correct federal and state returns — and filing them on time, with the documentation needed to defend every figure if the IRS or a state agency ever asks. At Pocket CPA, this is not a software-driven process. It is a reviewed engagement with a licensed CPA accountable for the final file.

Every individual return engagement includes the following:

• Federal Form 1040 with all schedules — Schedule A (itemized deductions), Schedule B (interest and dividends), Schedule D and Form 8949 (capital gains and losses), Schedule E (rental and K-1 income), Schedule SE (self-employment tax), and any other schedule required by the facts of the return.
• State and local returns — resident, part-year resident, and nonresident filings for every state with a filing obligation, with documented allocation and explanation.
• Equity compensation reconciliation — RSU, ISO, NSO, and ESPP transactions reconciled against the W-2 and Forms 3922 and 3921 to confirm the correct cost basis and prevent double taxation.
• Investment and capital gain reporting — 1099-B import, wash sale analysis, lot-level cost basis verification, K-1 entry from partnerships and PE funds, and reporting of cryptocurrency activity where applicable.
• Rental property and Schedule E — depreciation schedule maintenance, passive activity loss carryforward tracking, treatment of repairs versus capital improvements, and reporting of dispositions.
• AMT calculation and review — Form 6251 prepared and reviewed for clients with ISO exercises, large state and local tax exposure, or other AMT triggers.
• Backdoor Roth and nondeductible IRA reporting — Form 8606 prepared correctly, basis carried forward year over year.
• CPA review before filing — every return is reviewed line by line by a licensed CPA before it is filed. No return goes out the door on automated software output alone.
• Plain-English summary — a written explanation of what was filed, what the major figures mean, and what to expect from the IRS and state.
• E-filing and acceptance confirmation — federal and state returns are e-filed where eligible, with documented IRS and state acceptance.

Who We Prepare Individual Returns For

Pocket CPA works with individuals whose returns have moved past the simple stage. If your return involves equity compensation, multiple states, rental property, K-1 income, significant investment activity, or prior-year errors that need to be addressed — this is the kind of work we do every day.

Common Client Profiles

The Pocket CPA Standard

Three things never change, regardless of complexity or fee.

Licensed CPA — Every File

Every individual return is prepared or directly supervised by a licensed Certified Public Accountant. Not an enrolled agent. Not a seasonal preparer. Not a software output reviewed by a part-time contractor. A CPA — every time, without exception.

In-House, Never Offshore

Your W-2s, your brokerage statements, your K-1s, your rental records — none of it leaves our team. Documents are not routed overseas to reduce costs. The professional responsible for your return is the professional handling your file.

Responsive by Design

Questions get specific, informed answers within one business day. You will always know the status of your engagement, what is needed next, and when the return is expected to be ready. We do not go silent during busy season.

How an Individual Return Is Prepared at Pocket CPA

Every individual return follows the same defined process. The discipline is the point — it is what allows the work to be accurate, on time, and explainable.

1. Initial Consultation and Fit Assessment

   A scheduled call to review your situation: income sources, equity compensation, state filings, investment activity, and what you need from a CPA. We review the prior-year return when available. If we are not the right fit, we say so. If we are, a written engagement letter and fee quote follow.

2. Document Intake

   You provide W-2s, 1099s, K-1s, brokerage statements, Forms 3922 and 3921 if applicable, rental records, prior-year return, and any other supporting documents through a secure portal. Pocket CPA reviews the package for completeness before any return work begins. Missing items are identified and requested in writing.

3. Return Preparation

   The federal return, state returns, and all supporting schedules are prepared by a CPA. Equity compensation is reconciled against the W-2. Multi-state allocation is documented. Schedule E depreciation is tied to prior-year balances. Every figure on the return is traced to a source document.

4. Independent CPA Review

   Before the return is finalized, it is reviewed line by line by a CPA reviewer. The reviewer checks RSU basis, capital gain reporting, multi-state allocation, AMT exposure, passive activity carryforwards, IRA and 401(k) reporting, and consistency between federal and state filings. Questions and corrections are resolved before the client sees the draft.

5. Client Review Meeting

   You receive a complete draft of the return along with a plain-English written summary explaining the major figures, the income sources, the state allocations, and anything notable. A review meeting walks through the return. We do not file a return that has not been explained.

6. Filing and Confirmation

   Once authorized, the return is e-filed federally and to every required state. You receive IRS and state acceptance confirmations and a complete PDF copy of the filed return. Your file is closed with documentation that can be produced on request for the life of the return.

How Pocket CPA Compares

The gap between a volume preparation model and a CPA-led engagement is not subtle for individual returns. It is most visible in how equity compensation, multi-state allocation, and investment reporting are handled — three areas where shortcuts produce real errors.

Common Individual Return Errors We Catch

The same reporting and reconciliation errors appear in individual returns again and again — usually carried forward from a prior preparer who relied on broker-supplied data without verification. Pocket CPA's review process is designed to surface and correct these before the return is filed.

RSU Cost Basis Reported Incorrectly

This is the single most common error on high-income individual returns. Brokers issue Form 1099-B showing the cost basis as the share price at vest — but they do not always add the compensation already included on the W-2 to that basis. If the return is filed using the broker-reported basis without adjustment, the same income is taxed twice: once as wages and again as a capital gain. We reconcile every RSU vest and sale against the W-2 to confirm the correct adjusted basis.

ISO Exercises Without AMT Review

Exercising an incentive stock option creates an alternative minimum tax preference item equal to the spread between the exercise price and the fair market value at exercise, even if no shares are sold. Returns prepared without AMT review can either understate AMT liability in the year of exercise or fail to track the AMT credit available in later years. We prepare Form 6251 and track the AMT credit forward.

Multi-State Allocation Set to Default

Software defaults frequently allocate all wages and equity compensation to the state of residence, ignoring days worked in other states or the vesting period rules that apply to RSUs and stock options. The result is either overpayment in the home state, underpayment in the source state, or both. We document allocation based on workday records, vesting schedules, and state-specific sourcing rules.

Backdoor Roth Missing Form 8606

A backdoor Roth conversion is reported on Form 8606. Returns that skip this form lose track of basis, which can lead to the same dollars being taxed at conversion in a future year. We prepare Form 8606 in the year of contribution and conversion and carry the basis forward in every subsequent return.

Wash Sale Adjustments Missed

When a security is sold at a loss and a substantially identical security is purchased within thirty days, the loss is disallowed and added to the basis of the replacement shares. Broker-reported wash sale adjustments are limited to transactions within a single account — they do not cross brokers, retirement accounts, or spousal accounts. We review wash sales across accounts where applicable.

Schedule E Depreciation Not Tied to Prior Year

Rental property depreciation must reconcile from year to year. When a new preparer starts a Schedule E from scratch, they frequently restart depreciation on the wrong basis or miss accumulated depreciation entirely. We tie the depreciation schedule to the prior-year return at intake and verify every asset's basis, placed-in-service date, and method.

K-1s Reported But Not Reconciled

K-1s from partnerships, S-corporations, and investment funds frequently include items beyond ordinary income — passive losses, foreign tax credits, basis adjustments, and state-specific information. Returns that report only the headline numbers from a K-1 miss the supporting items. We work through every K-1 in full, including the footnotes.

Estimated Tax Safe Harbor Not Verified

Underpayment of estimated tax produces a penalty that can be avoided by meeting one of the safe harbor thresholds. Returns that simply calculate the underpayment without checking the safe harbor sometimes report a penalty that does not apply. We verify safe harbor against actual withholding and payments before reporting any underpayment.

Documents You'll Need to Provide

The accuracy of an individual return is determined largely before any tax work begins. The cleaner the documentation, the more efficient the engagement. Below is what we ask for at intake, organized by situation.

Required for Every Return

• Prior-year tax return — federal and all state returns filed last year.
• All W-2s — every employer, every state.
• All 1099s — interest, dividends, brokerage, retirement, contractor, and any others received.
• Government identification — for identity verification on e-filing.
• Dependent information — names, dates of birth, and Social Security numbers for any dependents claimed.

If You Have Equity Compensation

• Form 3922 — ESPP purchase information.
• Form 3921 — ISO exercise information.
• Year-end equity statements — from your brokerage covering RSU vests, option exercises, and ESPP purchases.
• Detailed sale records — every sale, with date acquired, date sold, proceeds, and broker-reported basis.
• Workday records for the vesting period — if multi-state allocation applies.

If You Have Investment Income

• 1099-B from every brokerage — including consolidated statements.
• K-1s from partnerships, S-corps, and funds — including all schedules and footnotes.
• Cryptocurrency transaction records — if applicable, exported from each exchange or wallet.
• Cost basis records — for any sales where broker-reported basis is incomplete (typically older holdings or transferred accounts).

If You Have Rental Property

• Prior-year Schedule E and depreciation schedule — for every property.
• Rental income records — by property.
• Expense records — by property, with documentation.
• Closing statements — for properties purchased or sold during the year.
• Capital improvement records — for items that must be depreciated rather than expensed.

If You Moved or Worked in Multiple States

• Date of move — if relocating during the year.
• Old and new addresses — for residency documentation.
• Workday records by state — if working in multiple jurisdictions.
• Prior-state credits and carryforwards — from the prior-year return.

If You Are Self-Employed

• Income records — by source.
• Expense records — categorized.
• Estimated tax payments made — federal and state, with dates and amounts.
• Home office details — if applicable.
• Vehicle records — mileage log or actual expenses.

Fees and Timeline

Pocket CPA provides a written fee quote before any work begins. Fees depend on the number of schedules, the volume of equity compensation activity, state filings, and the complexity of investment reporting. There are no surprise charges added after the engagement is underway.

What Drives the Fee

Typical Timeline

Returns with multi-state allocation, equity compensation reconciliation, or prior-year corrections take longer. Timeline is communicated in writing at the start of the engagement and updated if anything changes.

Frequently Asked Questions

Who actually prepares my individual tax return?

Every individual return at Pocket CPA is prepared or directly supervised by a licensed Certified Public Accountant. Work is never sent offshore and never handled exclusively by junior staff. A named CPA is responsible for your file from intake through filing.

What types of individual tax returns does Pocket CPA prepare?

Federal Form 1040 returns with every supporting schedule, including Schedule A, Schedule B, Schedule D, Schedule E, Schedule SE, Form 6251 (AMT), Form 8606 (nondeductible IRAs and backdoor Roth), and state and local returns for every state with a filing obligation.

Do I need a CPA if I only have W-2 income?

Not always. Simple W-2-only returns with no equity compensation, no investment income beyond a standard 1099-DIV, and a single state of residence often do not require a CPA. Pocket CPA is built for complex situations: RSUs, ISOs, ESPPs, deferred compensation, multi-state filings, rental property, K-1 investment income, and significant capital gains.

How does Pocket CPA handle RSUs and stock options on a tax return?

RSU and stock option reporting is one of the most common sources of overpaid tax. Brokers frequently report the cost basis on Form 1099-B without adjusting for the compensation already included on the W-2 — which leads to the same income being taxed twice. Pocket CPA reconciles every RSU vest, ISO exercise, ESPP sale, and stock option transaction against the W-2 and the 3922 or 3921 to confirm the correct cost basis before the return is filed.

Can Pocket CPA file taxes in multiple states?

Yes. Multi-state filings, including resident, part-year resident, and nonresident returns, are a routine part of our work. Common situations include relocating during the year, working in a state different from the state of residence, equity compensation sourced across multiple states, and rental property in another state. Allocation is documented and explained in writing.

How long does individual tax preparation take?

For clients with complete documentation, individual returns are typically completed within two to three weeks of intake. Returns involving multi-state allocation, equity compensation reconciliation, or prior-year corrections take longer. Pocket CPA provides a written timeline at the start of every engagement.

How much does individual tax preparation cost at Pocket CPA?

Fees depend on the number of schedules, equity compensation activity, state filings, and the volume of investment transactions. Pocket CPA provides a written fee quote before any work begins. There are no surprise charges added after the engagement is underway.

What if I have rental property?

Rental property is reported on Schedule E and requires accurate depreciation tracking, correct treatment of repairs versus improvements, passive activity loss rules, and proper handling of dispositions. Pocket CPA prepares Schedule E with a documented depreciation schedule and reconciles passive activity carryforwards from the prior return.

What if my prior-year return had errors?

Pocket CPA reviews prior-year returns as part of new client intake. If material errors are identified, we can prepare and file amended returns (Form 1040-X). We will explain in plain English what was wrong, what changes, and what to expect from the IRS and state.

Does Pocket CPA work with clients outside of Maryland?

Yes. Pocket CPA is based in Columbia, Maryland and works with individuals across the DMV region and nationwide. Federal returns and most state returns are prepared, reviewed, and filed remotely with a documented intake process and a written engagement letter.

What if I missed the April filing deadline?

Pocket CPA prepares returns on extension and late-filed returns regularly. An extension extends the time to file, not the time to pay. We evaluate the situation, file the extension or late return correctly, and address any penalty or interest exposure. Late filing is a process problem, not a moral one.

Will I be able to reach my CPA outside of tax season?

Yes. Pocket CPA maintains the same one-business-day response standard year-round. We do not go silent during busy season and we do not stop returning calls after April.

Can Pocket CPA prepare both my personal return and a business return?

Yes. Many of our clients are business owners whose K-1 from an S-Corp, partnership, or multi-member LLC flows into the personal return. Having both returns prepared by the same CPA ensures consistency and prevents the categorization and timing errors that occur when two preparers work in isolation.

Last reviewed by Mandeep Sandhu, CPA · May 2026 · Pocket CPA, Columbia, Maryland