Bowtied bookkeeping and tax

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2025 tax filing season starts as IRS begins accepting tax returns today; taxpayers have many options for help WASHINGTON — The Internal Revenue Service opened the 2025 tax filing season today and is accepting and processing federal individual tax year 2024 returns. During today’s early morning opening, IRS systems have already received millions of tax returns from across the nation for processing. The IRS expects more than 140 million individual tax returns for tax year 2024 to be filed ahead of the Tuesday, April 15 federal deadline. More than half of all tax returns are expected to be filed this year with the help of a tax professional, and the IRS urges people to use a trusted tax pro to avoid potential scams and schemes. Taxpayers residing in a federally declared disaster area may have additional time to file and pay federal taxes. Get free help preparing and filing taxes electronicallyTaxpayers can visit IRS.gov to get answers to tax questions. IRS.gov is the quickest way for taxpayers to get help. The Interactive Tax Assistant (ITA) is a tool that provides answers to several tax law questions specific to individual circumstances. Based on input, it can determine a taxpayer’s filing status, if a person should file a tax return, if someone can be claimed as a dependent, if a type of income is taxable, if a filer is eligible to claim a credit or if an expense can be deducted. The IRS encourages people to file their tax returns electronically and choose direct deposit for more secure and faster refunds. According to Treasury’s Bureau of the Fiscal Service, paper refund checks are 16 times more likely to have an issue, like the check being lost, misdirected, stolen or uncashed. Filing electronically reduces tax return errors as the tax software does the calculations, flags common errors and prompts taxpayers for missing information. Free tax filing optionsThe IRS offers free online and in-person tax preparation options for eligible taxpayers through IRS Free File, IRS Direct File and Volunteer Income Tax Assistance and Tax Counseling for the Elderly programs. IRS Free File. Taxpayers with income of $84,000 or less last year can use IRS Free File Guided Tax Software now through Oct. 15. IRS Free File Fillable forms, a part of this program, is available at no cost to any income level and provides electronic forms that people fill out and e-file themselves, also at no cost. Direct File. Now open in 25 participating states, taxpayers can use Direct File to file online directly with the IRS for free. It is a free web-based service – available in English and Spanish – that works on mobile phones, laptops, tablets or desktop computers. It guides taxpayers through a series of questions to prepare their federal tax return step-by-step. Direct File automatically guides taxpayers to state tools to complete their state taxes. Get help from IRS customer service representatives through a live chat feature in English and Spanish. Interested taxpayers can go to directfile.irs.gov, where they can determine if they are eligible. Volunteer Income Tax Assistance (VITA). The VITA program offers free tax help to people who generally make $67,000 or less, persons with disabilities and taxpayers whose preferred language is not English. IRS-certified volunteers provide free basic income tax return preparation with electronic filing to qualified individuals. In addition to VITA, the Tax Counseling for the Elderly (TCE) program offers free tax help for all taxpayers, particularly those who are 60 and older, specializing in questions about pensions and retirement-related issues unique to seniors. MilTax. This is a Department of Defense program available to members of the military and some veterans with no income limit. MilTax generally offers free return preparation and electronic filing software for federal income tax returns and up to three state income tax returns. Most refunds issued in less than 21 days: EITC refunds for many available by March 3The easiest way to check a refund’s status is by using Where’s My Refund? on IRS.gov or the IRS2Go app. Many factors can affect refund timing after the IRS receives a tax return. Although the IRS issues most refunds in less than 21 days, the IRS cautions taxpayers not to rely on receiving a refund by a certain date, especially when making major purchases or paying bills. Some returns may require additional review and may take longer. Under the federal Protecting Americans from Tax Hikes (PATH) Act, the IRS cannot issue Earned Income Tax Credit (EITC) and Additional Child Tax Credit (ACTC) refunds before mid-February. Where’s My Refund? should show an updated status by February 22 for most early EITC/ACTC filers. The IRS expects most EITC/ACTC related refunds to be available in taxpayer bank accounts or on debit cards by March 3 if they chose direct deposit and there are no other issues with their tax return. Report taxable income; don’t file before receiving key documentsPeople should report all taxable income on their tax return and wait to file until they receive all of their income and informational documents. Taxpayers may receive various income and information statements such as Forms 1099 from banks or other payers, unemployment compensation, dividends, pensions, annuities or retirement plan distributions. Taxpayers receiving Forms 1099-K, for payments on sale of goods and services through an online marketplace or payment app, can visit What to do with Form 1099-K to help them figure and report the correct amount of income on their tax return. Choose a trusted tax professionalMore than half of taxpayers turn to a tax professional for help filing a tax return. While most tax preparers deliver exceptional and professional service, selecting the wrong preparer can lead to financial harm. Taxpayers should review the tips for choosing a tax preparer and learn how to avoid unethical “ghost” return preparers who don’t sign or include a valid preparer tax identification number (PTIN) on every tax return they prepare. Taxpayers can also use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications to find

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IRS offers top tips to make tax time easier WASHINGTON — The Internal Revenue Service today provided taxpayers with six tips to make filing their 2024 tax return easier. Most of the information below is also available on the IRS.gov Let us help you page. Taxpayers should follow these handy suggestions as they prepare to file: Gather all important and necessary tax paperwork and records needed for filing a complete and accurate tax return. Errors and omissions can lead to missing a deduction or credit and slow down tax return processing and refunds. Before filing , taxpayers should have their:  Social Security numbers for everyone listed on the tax return.  Bank account and routing numbers.  Tax forms such as W-2s, 1099s, 1098s, records of digital asset transactions and other income documents.  Form 1095-A, Health Insurance Marketplace statement.  IRS letters they may have citing an amount received for a certain tax deduction or credit.  Report all types of income on the tax return to avoid receiving a notice or a bill from the IRS. Include income from:  Goods created and sold on online platforms.  Investment income.  Part-time or seasonal work.  Self-employment or other business activities.  Services provided and paid through mobile apps.  Avoid paper returns. Filing electronically with direct deposit is the fastest way to get a refund. Plus, tax software helps taxpayers avoid mistakes. It does the math and guides people through each section of their tax return.  Consider IRS free resources to help eligible taxpayers file.  IRS Free File provides a free online alternative to filing a paper tax return to any individual or family who earned $84,000 or less in 2024.  Direct File is available in 25 participating states for eligible taxpayers to file online directly with the IRS for free. This year, Direct File supports reporting more income types and claiming more credits and deductions. The free web-based service – available in English and Spanish – provides access to IRS customer service representatives through a live chat feature and works on mobile phones, laptops, tablets or desktop computers. Direct File guides taxpayers through a series of questions to prepare their federal tax return step-by-step and automatically guides taxpayers to state tools to complete their state taxes.  People who make over $84,000 can use the IRS’ Free File Fillable Forms. These are the electronic version of IRS paper forms. This product is best for people who are comfortable preparing their own taxes.  People who generally make $67,000 or less, persons with disabilities, limited English-speaking taxpayers and those who are 60 years of age and older, can also find free one-on-one tax preparation help around the nation through the Volunteer Income Tax Assistance (VITA) and Tax Counseling for the Elderly (TCE) programs.  The Department of Defense provides MilTax as a free tax resource for the military community. MilTax is a suite of tax services available for members of the military, as well as qualifying veterans and family members. There are no income limits. Eligible taxpayers can use MilTax to electronically file a federal tax return and up to three state returns for free.  Choose tax filing options based on personal situation and comfort level with tax preparation  Personally file taxes.  Use online filing services.  Hire a tax professional and choose carefully. Most tax return preparers are professional, honest and provide excellent service to their clients. However, dishonest tax return preparers who file false income tax returns do exist. The IRS has a Directory of Federal Tax Return Preparers with Credentials and Select Qualifications and more on choosing a tax pro on IRS.gov.  Use online resources at IRS.gov to quickly get answers to tax questions, check a refund status or pay taxes. There’s no wait time or appointment needed. Online tools and resources are available 24 hours a day, including the IRS’ Interactive Tax Assistant tool and Let us help you resources, which are especially helpful. Stay updated Follow the IRS’ official social media accounts and email subscription lists to stay current on the latest tax topics and alerts. Download the IRS2Go mobile app. Watch IRS YouTube videos.  

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IRS, national partners launch EITC Awareness Day on 50th anniversary of the Earned Income Tax Credit WASHINGTON — The Internal Revenue Service and partners around the nation today celebrated the 50th 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

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Topic 4

IRS urges taxpayers to choose tax preparers carefully to protect their personal information WASHINGTON — 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. Report tax preparer misconduct Taxpayers can report suspected preparer misconduct to the IRS using Form 14157, Complaint: Tax Return Preparer PDF. If a taxpayer suspects a tax return preparer filed or changed their tax return without their consent, they should file Form 14157-A, Tax Return Preparer Fraud or Misconduct Affidavit PDF. For more information Choosing a tax professional Publication 5895, Who Do You Trust to Prepare Your Return? PDF Publication 17, Your Federal Income Tax

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