February 2025 – Larson Accounting Group

5 de February de 2025

The Internal Revenue Service today reminded taxpayers that choosing the right tax professional is essential to helping them avoid tax-related identity theft and financial harm.

While most tax return preparers are trustworthy and provide high-quality service, some engage in fraud, identity theft and scams. Taxpayers must understand who they’re hiring and ask the right questions before handing over their sensitive personal and financial information.

Remember: Taxpayers are legally responsible for the accuracy of their income tax return, even if someone else prepares it.

IRS tools available to help taxpayers choose wisely

The IRS provides important resources to help taxpayers make informed decisions.

The Directory of Federal Tax Return Preparers with Credentials and Select Qualifications can help taxpayers find a tax pro who meets high standards.

There’s also a dedicated page on IRS.gov which offers guidance for Choosing a tax professional, including tips on choosing a reputable preparer, how to avoid unethical preparers and the various types of tax return preparers available. Taxpayers should consider their unique needs to determine which kind of preparer is best for them.

Free tax preparation

The IRS offers free filing options to file electronically. Eligible individuals and families can also get free help preparing their tax return from IRS-certified volunteers at Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) sites. Taxpayers can generally qualify for VITA services if they earn $67,000 or less. TCE sites also offer free tax help but with priority assistance to people who are 60 years of age and older. To find the closest free tax help site, use the VITA Locator Tool or call 800-906-9887.

Red flags

It’s important for taxpayers to recognize red flags when choosing a tax professional.

“Ghost” preparers – Be wary of anyone who won’t sign the tax return as the paid preparer and asks the taxpayer to sign and file the return themselves. The IRS requires tax preparers to sign returns and not doing so is a red flag and may signal fraud. These “ghost” preparers may be looking to make a quick profit and promise large refunds or charge fees based on the refund amount.

These unscrupulous “ghost” preparers often print the return and have the taxpayer sign and mail it to the IRS. For electronically filed returns, a “ghost” preparer will prepare the tax return but refuse to digitally sign it as the paid preparer. Taxpayers should avoid this type of unethical behavior as it can indicate fraud.

Valid ID for tax preparers – Taxpayers should always choose a tax preparer with a valid Preparer Tax Identification Number (PTIN). By law, anyone who is paid to prepare or assists in preparing federal tax returns must have a valid PTIN. Paid preparers must sign and include their PTIN on any tax return they prepare.

Tips for choosing a tax return preparer

Here are some additional tips to consider when choosing a tax professional.

Look for a preparer who’s available year-round. Questions may come up about a tax return after filing season ends and it’s helpful to contact the preparer when needed.

Review the preparer’s history using the Better Business Bureau website. Look for disciplinary actions and the license status for credentialed preparers. For CPAs, check the State Board of Accountancy’s website, and for attorneys check with the State Bar Association. For enrolled agents go to IRS.gov and search for “verify enrolled agent status” or check the IRS Directory of Federal Tax Return Preparers.

Discuss service fees upfront. Avoid tax return preparers who base their fees on a percentage of the refund or who offer to deposit all or part of the refund into their own accounts. Be wary of those who claim they can get larger refunds than their competitors.

Find an authorized IRS e-file provider. They are qualified to prepare, transmit and process e-filed returns. Filing electronically and choosing direct deposit can result in faster refunds, often within 21 days.

Provide records and receipts. Trustworthy preparers will request proper documentation and ask questions to determine the client’s total income, deductions, tax credits and other relevant details. Do not hire a preparer who e-files a tax return using a pay stub instead of a Form W-2. This is against IRS e-file rules.

Understand the preparer’s credentials and qualifications. Attorneys, CPAs and enrolled agents can represent any client before the IRS in any situation. Annual Filing Season Program participants may represent taxpayers in limited situations if they prepared and signed the tax return.

Never sign a blank or incomplete return. Taxpayers are responsible for filing a complete and correct tax return.

Review the tax return carefully before signing it. Be sure to ask questions if something is not clear or appears inaccurate. Any refund should go directly to the taxpayer – not into the preparer’s bank account. Review the routing and bank account number on the completed return and make sure it’s accurate.

Source: IRS-2025-21, Feb. 3, 2025

by Larson Accounting

3 de February de 2025

The Internal Revenue Service and partners around the nation today celebrated the 50^th anniversary of the Earned Income Tax Credit (EITC) with the launch of this year’s EITC Awareness Day campaign.

The annual campaign, now in its 19th year, helps increase awareness among the millions of working Americans with a low-to-moderate income who are eligible for the EITC. The IRS estimates that roughly one in five eligible taxpayers miss out on claiming this valuable credit.

EITC was signed into law on March 29, 1975. Through numerous legislative changes, the tax break has helped encourage work and lift many financially challenged families out of poverty.

As of December 2024, approximately 23 million workers and families had received about $64 billion total from the EITC, according to IRS statistics. On average, eligible taxpayers received $2,743 from the credit in tax year 2023.

For the past 19 years, the IRS has invited community organizations, elected officials, state and local governments, schools, employers and other interested parties to join this national grassroots effort to help reach workers eligible for the credit. IRS offers an online social media toolkit with sample text and downloadable graphics to help spread the word about the EITC.

Who is eligible to claim the EITC?

Workers may use the EITC Assistant, an online tool, to check their eligibility, which may be affected by changes in marital, parental or financial status. Workers also may visit the Child-related tax benefits comparison page to learn more about basic eligibility rules for the EITC and several other tax credits.

EITC is for workers whose income did not exceed the following limits in 2024:

No. of dependents	Single filer income limit	Married, filing jointly income limit
No children	$18,591	$25,511
1 child	$49,084	$56,004
2 children	$55,768	$62,688
3+ children	$59,899	$66,819

*Investment income limit: $11,600

Workers also must:

Be a U.S. citizen or resident alien all year.
File a tax return even if their income level doesn’t usually require them to file.
Have a valid Social Security number (SSN) for themselves, as well as for their spouse, if filing a joint return, and for each qualifying dependent claimed for the EITC.
File a return without Form 2555, Foreign Earned Income.

There are special rules for military personnel, clergy and ministers and taxpayers with certain types of disability income or a child who is disabled.

Eligible workers between the ages of 25 and 64 who have no dependents may receive up to $632 by claiming the EITC, while married but separated spouses who do not file a joint return may qualify for the EITC if they meet certain requirements.

Those with qualifying children can receive a maximum of $7,830 when claiming the EITC for tax year 2024, up from $7,430 in tax year 2023.

How to claim the EITC

To get the EITC, workers must file a tax return and claim the credit on that return. They can file in a variety of ways, including by using:

IRS Free File on IRS.gov. Qualified taxpayers can prepare and file federal income tax returns online for free using guided tax preparation software. IRS Free File also provides Fillable Forms free online for use by any taxpayer, regardless of income, who is comfortable preparing their own return.
Direct File. An option for eligible people in participating states to prepare and file their federal tax return online for free directly and securely with IRS. Taxpayers have access to live chat support from IRS staff. While Direct File doesn’t prepare state returns, if someone lives in a participating state, Direct File guides taxpayers to a state-supported tool to prepare and file their state tax return for free.
A reputable tax professional. To help taxpayers avoid unscrupulous “ghost preparers,” the IRS offers tips for choosing a trustworthy tax professional, whether that’s a certified public accountant, Enrolled Agent, or a trusted person without a professional credential. Taxpayers can check whether someone is credentialed using the Directory of Federal Tax Return Preparers and find information on national tax professional groups at IRS.gov.
Free tax preparation assistance. There are thousands of Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) sites across the country available to help workers eligible to claim the EITC. Taxpayers can find a VITA or TCE site by using the VITA/TCE Locator Tool, through the IRS2Go smartphone app or by calling 800-906-9887.

As a reminder, the quickest way for taxpayers to get their refund is by e-filing an accurate return and choosing to receive that refund via direct deposit.

New this year: Duplicate dependents

Starting this filing season, the IRS will accept an e-filed return even if a dependent has already been claimed on a separate, previously filed return as long as the primary taxpayer on the second return includes a valid identity protection personal identification number (IP PIN).

This change will reduce the time it takes for the agency to receive the tax return and accelerate the issuance of tax refunds for those with duplicate dependent returns. In previous years, the second tax return had to be filed by paper.

Meanwhile, taxpayers who do not have IP PINs will have their e-filed returns rejected if one of their dependents has already been claimed by another taxpayer.

Note that the use of an IP PIN does not exempt taxpayers from receiving notices questioning their right to claim certain dependents.

Claiming other valuable tax credits

Whether they qualify for the EITC, taxpayers may be eligible for other valuable tax credits, such as the Child Tax Credit (CTC), the Additional Child Tax Credit (ACTC) or the Credit for Other Dependents (ODC). The Interactive Tax Assistant is a helpful tool for taxpayers to check their eligibility for those credits.

When to expect EITC refunds

The Where’s My Refund? tool, which allows taxpayers to monitor the status of their refunds, will be updated with projected deposit dates for most early EITC/ACTC refund filers by Feb. 22. Most EITC or ACTC related refunds should be available in bank accounts or on debit cards by March 3 if there are no issues with a taxpayer’s return and they chose to receive their refund by direct deposit.

Additional resources

Celebrating 50 years of the Earned Income Tax Credit
EITC Central
EITC reports and statistics, including participation rates by state.
Publication 596, Earned Income Credit, offers a detailed view of the EITC, eligibility rules and instructions on how to claim the credit.
Other refundable credits toolkit
@IRSnews and @IRSenEspanol, the IRS X news feeds, provide the latest federal tax news and information for taxpayers in English and Spanish.
IRS videos available on YouTube that provide information about credits, deductions and tax law changes.
Get an identity protection personal identification number (IP PIN)

Source: IRS-2025-20, Jan. 31, 2025

IRS urges taxpayers to choose tax preparers carefully to protect their personal information