Questions about TracePrep

Every Number Has a Source. That is the product claim, and these answers say what it does and does not mean in practice: what TracePrep does with a client's folder, what reaches your tax software, who signs off, and what your firm still holds years later. Questions about the Reasonable Compensation Study follow in their own section.

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How to read these answers

The questions are grouped by the decision in front of you. Tax prep comes first: what TracePrep is, how review and sign-off work, what your firm keeps, how client information is held, and how AI assistants fit. The Reasonable Compensation Study groups follow.

Every answer links onward to the page carrying the full account. A short answer nobody can check is the thing this product exists to replace, so none of these is asked to stand on its own.

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Tax prep

What TracePrep does with a client's folder, and what it leaves to your firm.

What does TracePrep do for tax prep?
It turns a client's folder of tax documents into cited facts, an entry list for your tax software, and a Reviewer-signed workpaper your Firm owns. Every fact is tied to its source: the page it came from, or the Preparer's written reason. The Preparer confirms each document's facts beside the source image. How TracePrep works follows one folder from upload to sign-off.
Does TracePrep compute the tax or file the return?
No. TracePrep does not compute the tax and does not file the return. Your tax software computes. Your people file, sign, and collect payment. No entry is a total or a tax figure: each one is the value of one fact or identity field, unchanged. The entry list step shows what an entry is.
Which returns and documents does TracePrep cover?
Individual returns, Form 1040. The Preparer splits the folder and names each document. Where a fact comes from a document, the Preparer enters it from that document and confirms it beside the source image, and the fact keeps its page. A fact with no document behind it carries the Preparer's written reason. The cited facts step shows how.
How do the values get into our tax software?
A person keys them from the entry list, row by row, with each row beside its source. Each row is then marked entered and read back against the tax software. A row that shows a different value is marked as a mismatch with the value the Preparer saw, and the Prep cannot go to review until it is fixed. The entry and readback step shows the order.
Which firms is TracePrep tax prep for?
CPA, EA, and accounting firms that prepare individual returns, with Preparers who hand off to a designated Reviewer. A solo practitioner can hold both roles, and the record then says the signer also prepared. TracePrep is for practitioners: it has no taxpayer login and never contacts a taxpayer. About TracePrep covers who builds it.

Review and sign-off

Who signs, what they sign, and what changes after a document arrives late.

Who signs off on a Prep?
The Reviewer of record at your firm, and only after every row is read back against the tax software. A Prep is one client and one tax year. The Reviewer sees each entry beside its page, can raise a written exception on any row, and can send the Prep back. A machine caller cannot sign. For Reviewers walks a review pass.
Is sign-off a signature on the return?
No. Sign-off is a workpaper review: the Reviewer compared the entries with the cited pages and reviewed what was corrected or keyed by hand. The return is still reviewed, signed, and filed in your tax software by your people. TracePrep never calls a Prep filed, accepted, or approved. The review step shows what comes before it.
What happens when a document arrives late?
Before sign-off, upload it to the same Prep. Its rows join the entry list as not entered, and no other row changes. A corrected document can replace one already entered; the rows whose values changed turn stale and must be entered and read back again before review. How TracePrep works covers the order.

Your firm's file and client data

What your firm holds when a Prep is signed, and how client information is handled on the way.

What does our firm keep from a Prep?
Two things. The Workbook lists every entry by form, with its value and its source citation, and names the Reviewer of record and their role. The workpaper holds the source documents, the facts with their history, the entries, the readback, and the sign-off, and your Firm owns it. Its export is a structured file that lists each source document by reference and hash. Firm-owned workpapers covers ownership.
How is client information handled in a Prep?
The Preparer keys each fact inside TracePrep; those pages are not sent to a model. Full Social Security numbers are not stored outside the documents themselves; TracePrep keeps the last four digits. Notifications carry a display id and a link, never a client name or an amount. The security page covers the platform.
Who at our firm can see a Prep?
The people your firm assigns to it, and your Firm Admin. Every material step records the person who took it: who confirmed each document, who keyed each value, who marked each row read back, and who signed. Reviewer sign-off covers what the record holds.

AI assistants and the TracePrep plugin

How the TracePrep plugin and your AI assistant relate to TracePrep, and what neither one does.

What is the TracePrep plugin?
A plugin of tax-prep skills for tax professionals who use Claude Code, Claude Cowork, Codex or ChatGPT, from TracePrep Inc. It does not compute or file a return. The plugin and the TracePrep app share one waitlist.
Does TracePrep work with our AI assistant?
For Reasonable Compensation Studies, yes. Your AI assistant works with TracePrep through MCP, authorized by a signed-in member of your Firm. It lists and reads Studies and workpapers, creates intake, ingests evidence, pulls PDFs, and reads audit history, and each change it makes is recorded under the member who authorized it. Sign-off stays human: a machine caller cannot sign. See how a Study is built.

Joining

Where to go next.

How do we get on the list?
Join the waitlist. It covers the TracePrep app and the TracePrep plugin, and you choose the app, the plugin, or both. Working a reasonable compensation file now? The Study groups below cover that.

Reasonable Compensation Study questions

TracePrep also produces the Reasonable Compensation Study for an S-corporation shareholder-employee: traceable evidence, Reviewer sign-off, and workpapers the Firm owns. The five groups below answer questions about the Study.

Read the guide to reasonable compensation

Study: product

What the platform is, who it serves, and what it produces.

What is a Reasonable Compensation Study?
It is the workpaper set behind the salary an S corporation pays a shareholder-employee. A Study fixes the period and the role, ties each input to a published source, records a figure, and carries a reviewer’s sign-off. The number on its own is not the deliverable. The deliverable is a file someone can open two years from now and test, decision by decision, without taking anyone’s word for it. Our guide to reasonable compensation covers the tax question underneath; this page covers how the platform handles it.
Who is the Study built for?
CPA firms, EA practices and accounting firms that put their name on S-corporation compensation for their clients. The workflow assumes a Preparer and a Reviewer working inside the firm’s own engagement, and it assumes the firm keeps the file afterwards. If one person does both jobs at a small practice, that still works: the roles describe the steps, not the headcount. See how a Study is built shows the six steps and which role acts at each one.
Who signs off on a finished Study?
A qualified reviewer at your firm. TracePrep records who signed off and on what date, and it never stands in for that person. The reviewer sees each input beside its source and each adjustment beside its written rationale, so they can disagree with one specific decision instead of accepting or rejecting a finished number. Sign-off is a professional taking responsibility inside your engagement, which is why it is a person and not a status flag. The review step describes exactly what that person works through.
What does a firm hold when a Study is finished?
A self-contained workpaper set: the figure, the inputs, the source behind each input, the rationale behind each adjustment, and the recorded sign-off. It reads without access to the platform that produced it, so a client, a successor firm or an examiner can work through it directly. A sample Study shows the cover, the table of contents and one redacted evidence page, which is enough to judge whether the format fits how your firm files workpapers.

Study: method

Where the numbers come from, and what we publish about how they are reached.

Where does the wage data come from?
Published federal wage data from the Bureau of Labor Statistics Occupational Employment and Wage Statistics program, cited in the Study by release. A reader can open the same public table and see the same figures. Nothing rests on a private benchmark the person checking the file cannot reach. Each release a Study draws on is versioned, so a Study built last year still points at the data that existed when it was built rather than at whatever the source says today. The evidence step covers how an input gets attached to its source.
Which approaches does a Study apply?
The approaches the IRS recognizes for valuing an owner’s services, applied to the facts captured at intake: what the shareholder-employee actually does, the period under study, and the compensation already recorded. Which approach carries weight in a given file is a question about the facts, and the Study records the reasoning instead of asserting a result. That is the difference between a figure you can defend and a figure you can only repeat. See how a Study is built walks the calculation step in order.
How are adjustments recorded?
Every adjustment carries a written rationale sitting next to it. That is the mechanism a reviewer needs: they can agree or disagree with one specific decision rather than argue with a total. We publish that adjustments are documented and we do not publish how they are sized or chosen, because a published formula is a formula anyone can run backwards toward a preferred answer. The six-step flow shows where in the process each rationale is written.
How often should a Study be updated?
Once a year, and again whenever the facts move: duties change, hours change, a new entity appears, or the year turns out materially different from the last one. Reasonable compensation is a yearly question, so a Study is a yearly record rather than a one-time document. Each year starts from the retained prior Study instead of from memory, which is what makes this year’s figure comparable to last year’s. Annual continuity is the sixth step of the Study pipeline.
What do you publish about the method?
Structure and sources, not internal mechanics. We publish the six steps, the public data a Study draws on, the recognized approaches it applies, the fact that every adjustment carries a rationale, and who does what. We do not publish coefficients, mapping tables or selection rules. A method published in full is a method that can be worked backwards toward a chosen answer, which would make every Study built on it worth less to the firm that signed it. Our reasonable compensation guide covers the underlying tax question in the open.

Study: firm ownership

Who owns the work, and what happens to it when the relationship changes.

Who owns the workpapers a Study produces?
Your firm, permanently. Finalized evidence and workpapers belong to the firm that produced them, and that does not change with the status of your account. The deliverable is self-contained, so it stays readable without the platform. This is the part of the product that matters most when a file is old: ownership that depends on an active subscription is not ownership. A sample Study shows the form the file takes when it leaves.
What happens to our Studies if we cancel?
The Firm permanently owns finalized evidence and workpapers. Finalized Studies remain downloadable in TracePrep for three years from the date the subscription ends, for any reason. Export what you need inside that window and the files sit in your own document system for as long as you choose to keep them. Nothing about cancelling touches your ownership of work you already finished. Retention is the sixth step in how a Study is built, and it is written that way on purpose.
Can we export a Study out of TracePrep?
Yes. The workpaper set is built to leave: it travels with its evidence rather than pointing back at a system the reader cannot open. Hand it to a client, attach it to a return file, or produce it on request years later. A deliverable that only renders inside the tool that made it is a dependency, not a workpaper. A sample Study shows what an exported file actually contains.
Whose engagement is a Study part of?
Yours. TracePrep is the platform your firm works in; the engagement, the client relationship and the professional judgment stay with you. We do not review, bless or countersign a Study, and no output claims that we did. The three roles in the workflow are Preparer, Reviewer and Firm, and all three of them are yours. The roles table sets out which role acts at which step, including the steps where a role does nothing.

Study: security & data

What a Study needs from you, who sees it, and what the record shows.

What client information does a Study need?
The entity, the shareholder-employee, the role actually performed, the period under study, and the compensation already recorded. That set is what everything later is measured against, and it is captured in one structured place at intake rather than reconstructed afterwards from a folder of documents. A fixed scope is what lets two people reach the same figure from the same file and say which question they answered. The intake step describes what gets captured and why each piece is there.
Who at our firm can see an engagement?
The people your firm puts on it. Work moves through the Preparer and Reviewer roles inside your own engagement, and the Firm holds the finished record. Access is your decision, not something the platform makes for you. The one step no role skips is sign-off: a Study is not finished until a reviewer at your firm accepts it, and the file records who that was. Get started opens an engagement so you can see the roles working on a real file.
What does the file show about who did what?
Each input carries the source it came from. Each adjustment carries the reason it was made. The sign-off carries the identity of the reviewer who accepted the Study and the date they accepted it. That is the record: not an assertion that the work was done well, but the trail that lets someone else decide whether it was. See how a Study is built shows where each of those marks is created.

Study: getting started

Where to look first, and what a first engagement asks of you.

What is the fastest way to see what a Study looks like?
Read one before you open an engagement. The sample Study shows the cover, the table of contents and one redacted evidence page, which is enough to tell whether the format fits the way your firm files workpapers. It carries illustrative sample data: it is not tax advice and not a real client file. If the format works for you, the next step is a live engagement rather than a longer sample.
How do we open our first engagement?
Start on the Get started page and open a Study on a live S-corporation file. There is nothing to migrate first. A Study needs the entity, the shareholder-employee, the role performed, the period and the compensation already recorded, and you already hold all five for any client you are considering. The first engagement runs the same six steps as every later one, so the first file is also the quickest way to learn the workflow.
Is the reasonable compensation calculator the same as a Study?
No. The calculator gives you a quick figure to orient a conversation with a client. A Study is the workpaper set behind a figure: fixed scope, sourced inputs, documented adjustments, a reviewer’s sign-off, and a file your firm keeps. Use the calculator to decide whether a client needs a closer look. Use a Study when somebody may later ask how the number was reached.

Where these answers lead

These groups of short answers can only carry a decision so far. Each one points at the page holding the full account: how a client's folder becomes a signed workpaper, the six Study steps and the role that acts at each of them, a worked sample of the finished Study, and the guide to the tax question underneath.

If a question here is close to yours but not quite it, follow the link inside the answer and read the page it names. These answers are written to hand you onward, not to settle the question by themselves.

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