The Covid-19 Aid Bill

After months of inaction, Congress overwhelmingly approved a $900 billion emergency relief package. The bill won’t include aid for states and local governments whose revenues have been devastated by the pandemic—a priority among Democrats—nor will it include a broad liability shield for corporations that many Republican leaders had sought.

Here are some highlights of what is included in the legislation:

  • Direct payments, jobless aid and rental assistance: The bill will send a second round of stimulus checks to Americans of $600 for each adult and $600 for each dependent, at a cost of about $166 billion. Payments will begin to phase out for individuals who earned more than $75,000 in 2019. Unemployed workers will also be eligible for $300 a week in enhanced federal unemployment assistance through March 14 next year. Both the direct payments and the extra jobless aid are set at lower levels in the new bill than Congress approved for similar programs earlier this year. An extra $100 subsidy will be offered for some workers who have both wage and self-employment income but whose basic unemployment benefits don’t take into account their self-employment income. The legislation also includes $25 billion in rental assistance to tenants struggling with rent payments and extends a federal eviction prohibition until the end of January.
  • Vaccines, funding for schools and testing and tracing: The bill will provide billions of dollars to state and federal agencies for vaccine distribution, including about $300 million directed to high-risk areas and communities of color. Public schools will receive $54.3 billion. Over $22 billion will go to Covid-19 testing, tracing and mitigation efforts, $2.5 billion of which will be directed to rural communities and communities of color.
  • Airlines, banks and entertainment venues: Airlines will receive more than $15 billion in aid to cover salaries and benefits for workers through the end of March, after Congress separately disbursed $25 billion to the industry under the Cares Act in the spring. Small lenders that focus on low-income and minority communities will receive about $12 billion, and $15 billion will go to entertainment venues such as independent movie theaters and live-event operators.

Gig Economy Tips Taxpayers Should Remember

The gig economy, also called sharing or access economy, is activity where taxpayers earn income providing on-demand work, services or goods. Often, it’s through a digital platform like an app or website. While there are many types of sharing economy businesses, ride-sharing and home rentals are two of the most popular.

Here are some things taxpayers should remember:

  • Income from these sources is taxable, regardless of whether an individual receives information returns. This is true even if the work is full-time, part-time or if an individual is paid in cash.
  • Taxpayers may also be required to make quarterly estimated income tax payments and pay their share of Social Security, Medicare or Medicaid taxes.

While providing gig economy services, it is important that the taxpayer is correctly classified.

  • This means the business or the taxpayer must determine whether the individual providing the services is an employee or independent contractor.
  • Taxpayers can use the worker classification page on IRS.gov to see how they are classified.
  • Independent contractors may be able to deduct business expenses, depending on tax limits and rules. It is important for taxpayers to keep records of their business expenses.

Since income from the gig economy is taxable, it’s important that taxpayers remember to pay the right amount of taxes throughout the year to avoid owing when they file.

  • An employer typically withholds income taxes from their employees’ pay to help cover income taxes their employees owe.
  • Gig economy workers who are not considered employees have two ways to cover their income taxes:
    • Submit a new From W-4 to their employer to have more income taxes withheld from their paycheck, if they have another job as an employee.
    • Make quarterly estimated tax payments to help pay their income taxes throughout the year, including self-employment tax.

The Gig Economy Tax Center on IRS.gov answers questions and helps gig economy taxpayers understand their tax responsibilities.

Two New Refundable Payroll Tax Credits Available Now

COVID-19 paid leave tax credits for
small and midsize businesses

Small and midsize employers can claim two new refundable payroll tax credits. The paid sick leave credit and the
paid family leave credit are designed to immediately and fully reimburse eligible employers for the cost of providing
COVID-19 related leave to their employees.
Here are some key things to know about these credits.
Coverage
• Employers receive 100% reimbursement for required paid leave.
• Health insurance costs are also included in the credit.
• Employers do not owe their share of social security tax on the paid leave and get a credit for their share of
Medicare tax on the paid leave.
• Self-employed individuals receive an equivalent credit.
Fast funds
• Reimbursement will be quick and easy.
• The credit provides a dollar-for-dollar tax offset against the employer’s payroll taxes
• The IRS will send any refunds owed as quickly as possible.
To take immediate advantage of the paid leave credits, businesses should use funds they would otherwise pay to the
IRS in payroll taxes. If those amounts are not enough to cover the cost of paid leave, employers can request an
expedited advance from the IRS by submitting Form 7200, Advance Payment of Employer Credits Due to COVID-19.
For details about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov.
Share this tip on social media — #IRSTaxTip: COVID-19 paid leave tax credits for small and midsize businesses.
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Issue Number: COVID Tax Tip 2020-48

Tools to help people get their Economic Impact Payment

The IRS has two tools to help millions of taxpayers with their Economic Impact Payment. The payments are $1,200 per eligible person and up to $500 for each qualifying child.

The first tool, Non-filers: Enter Payment Info Here is available – in English and Spanish – for certain taxpayers who don’t normally need to file a return. This free tool allows them to enter basic information so the IRS can issue their payment. The second tool, Get My Payment, allows people to check the status of their payment and provide bank account information if a payment has not been scheduled for delivery.

Who needs to use Non-filers: Enter Payment Info Here?

  • Taxpayers with low- or no-income: Those who don’t normally file a tax return include those with little or no income. This includes single filers who made under $12,200 and married couples who made less than 24,400 in 2019.
  • Taxpayers who receive federal benefits: Eligible SSI and veterans’ beneficiaries who usually don’t file a tax return don’t need to provide information to get a $1,200 payment automatically. However, VA and SSI benefit recipients who don’t normally file a tax return and have children should use the free tool by May 5. This will add the $500 per qualifying child under 17 to the automatic payments. If they miss the May 5 deadline, they will have to file a tax return next year for 2020 to receive the $500 per child.
  • Married individuals must provide additional information for their spouse to claim the full $2,400 payment if their spouse didn’t receive SSA, SSDI, RRB, SSI or VA benefits in 2019 and didn’t have to file a tax return in the last two years. They need to provide this information using the Non-Filer tool before the payment is scheduled otherwise, their payment at this time will be $1,200.

Should these groups use the Non-filers: Enter Payment Info Here tool?

  • Taxpayers who have already filed or who are required to file a 2019 tax return should not use this tool. Using this tool will NOT speed up their Economic Impact Payment and will likely slow down processing of their tax return and receiving any refund.
  • People who already received their payment, even if they did not receive the full amount, should not use this tool.
  • Those who can be claimed as a dependent on someone else’s 2019 tax return are not eligible for the Payment and should not use the tool.

How to use Non-filers: Enter Payment Info Here.
The process is simple, and it only takes a few minutes to complete and submit the request for their Economic Impact Payment. First, taxpayers should visit IRS.gov and go to Non-filers: Enter Payment Info Here. Then provide basic information. The IRS will use this information to confirm the taxpayer’s eligibility, calculate, and send them a payment.
 
No tax will be owed on Economic Income Payments. It will not reduce a taxpayer’s refund or increase the amount owed when on the 2020 tax return filed next year. It will not affect income for purposes of determining eligibility for federal government assistance or benefit programs.

Share this tip on social media — #IRSTaxTip: Tools to help people get their Economic Impact Payment. https://go.usa.gov/xvEwC

Treasury, IRS unveil online application to help with Economic Impact Payments

2020 Cornonavirus Stimulus Checks – Economic Impact Payments

Working with the Treasury Department, the Internal Revenue Service today unveiled the new Get My Payment with features to let taxpayers check on their Economic Impact Payment date and update direct deposit information.

With an initial round of more than 80 million Economic Impact Payments starting to hit bank accounts over the weekend and throughout this week, this new tool will help address key common questions. Get My Payment will show the projected date when a deposit has been scheduled, similar to the “Where’s My Refund tool” many taxpayers are already familiar with.

Get My Payment also allows people a chance to provide their bank information. People who did not use direct deposit on their last tax return will be able to input information to receive the payment by direct deposit into their bank account, expediting receipt.

Get My Payment will offer people with a quick and easy way to find the status of their payment and, where possible, provide their bank account information if we don’t already have it,” said IRS Commissioner Chuck Rettig. “Our IRS employees have been working non-stop on the Economic Impact Payments to help taxpayers in need. In addition to successfully generating payments to more than 80 million people, IRS teams throughout the country proudly worked long days and weekends to quickly deliver Get My Payment ahead of schedule.”

Get My Payment is updated once daily, usually overnight. The IRS urges taxpayers to only use Get My Payment once a day given the large number of people receiving Economic Impact Payments.

How to use Get My Payment
Available only on IRS.gov, the online application is safe and secure to use. Taxpayers only need a few pieces of information to quickly obtain the status of their payment and, where needed, provide their bank account information. Having a copy of their most recent tax return can help speed the process.

  • For taxpayers to track the status of their payment, this feature will show taxpayers the payment amount, scheduled delivery date by direct deposit or paper check and if a payment hasn’t been scheduled. They will need to enter basic information including:
    • Social Security number
    • Date of birth, and
    • ailing address used on their tax return.
  • Taxpayers needing to add their bank account information to speed receipt of their payment will also need to provide the following additional information:
    • Their Adjusted Gross Income from their most recent tax return submitted, either 2019 or 2018
    • The refund or amount owed from their latest filed tax return
    • Bank account type, account and routing numbers

Get My Payment cannot update bank account information after an Economic Impact Payment has been scheduled for delivery. To help protect against potential fraud, the tool also does not allow people to change bank account information already on file with the IRS. 

A Spanish version of Get My Payment is expected in a few weeks.

Don’t normally file a tax return? Additional IRS tool helps non-filers
In addition to Get My Payment, Treasury and IRS have a second a new web tool allowing quick registration for Economic Impact Payments for those who don’t normally file a tax return.

The Non-filers: Enter Payment Info tool, developed in partnership between the IRS and the Free File Alliance, provides a free and easy option designed for people who don’t have a return filing obligation, including those with too little income to file. The new web tool is available only on IRS.gov, and users should look for Non-filers: Enter Payment Info Here to take them directly to the tool.

Non-filers: Enter Payment Info is designed for people who did not file a tax return for 2018 or 2019 and who don’t receive Social Security retirement, disability (SSDI), or survivor benefits and Railroad Retirement benefits. Additional information is available at https://www.irs.gov/coronavirus/non-filers-enter-payment-info-here.

No action needed by most taxpayers
Eligible taxpayers who filed tax returns for 2019 or 2018 will receive the payments automatically. Automatic payments will also go in the near future to those receiving Social Security retirement, or disability (SSDI), or survivor benefits and Railroad Retirement benefits.

General information about the Economic Impact Payments is available on a special section of IRS.gov: https://www.irs.gov/coronavirus/economic-impact-payment-information-center.

Watch out for scams related to Economic Impact Payments
The IRS urges taxpayers to be on the lookout for scams related to the Economic Impact Payments. To use the new app or get information, taxpayers should visit IRS.gov. People should watch out for scams using email, phone calls or texts related to the payments. Be careful and cautious: The IRS will not send unsolicited electronic communications asking people to open attachments, visit a website or share personal or financial information. Remember, go directly and solely to IRS.gov for official information.

More information
The IRS will post frequently asked questions on IRS.gov/coronavirus and will provide updates as soon as they are available. 

What you need to know about the CARES Act

The Coronavirus Aid, Relief and Economic Security (CARES) Act is now law.

What does that mean for you?

What should you do at this time?

On Friday afternoon the President signed the bill sent to him by Congress now called the CARES Act. 

There are 2 main pieces that effect most Americans now:

  • Expanded Unemployment Insurance – for up to four months anyone can obtain an additional $600 per week for up to four months.  The expansion also includes those not usually covered by unemployment: self-employed, independent contractors and those with limited work history or newly hired.  Additionally, unemployment benefits will be funded an additional 13 weeks after state funds have run out
  • Recovery Rebate for individual taxpayers – this is the focus of the rest of this blog…

What does the Recovery Rebate mean for YOU the Individual Taxpayer?

            The CARES Act will pay a refundable tax credit for individuals of $1,200 ($2,400 for joint filers) and $500 for each child.  The rebate is phased out at $75,000 for singles, $112,500 for head of household and $150,000 for joint filers.  See the chart from TaxFoundation.org for examples of the amounts and phase-out.

Therefore, a single person with $100,000 income and no children would not get a benefit and the same for $200,000 income married filing joint and no children.

This will be based on your 2019 Income Tax Return filed.  If you have not filed your 2019 return yet, then it will be based on your 2018 Income Tax Return.

What should YOU do at this time?

            If you have ALREADY FILED your 2019 Income Tax Return you do not have to do anything.  The IRS will process your refundable tax credit based on that information.

            If you have NOT FILED your 2019 Income Tax Return the refundable tax credit will be based on your 2018 Income Tax Return.  You also have 2 choices to make right now:

  • File your 2019 Return now if your income is LOWER than your 2018 income tax return and below the threshold limits to get or maximize your credit
    • Delay filing your 2019 Return if your income is HIGHER than your 2018 income tax return and above the threshold limits to get or maximize your credit

            If you have NOT FILED your 2018 OR 2019 Income Tax Return YOU MIGHT NOT GET the refundable advance tax credit. The other people excluded are those who are behind on child support payments. You will still be eligible to receive it when you file your 2020 Income Tax Return – or you can still file your 2018 or 2019 returns now. [I feel that it is always advisable that you file your tax return even when no tax is owed]

            The IRS will be sending out the refundable tax credits to the taxpayers 2019 (or 2018) bank account of record from your tax return. 

  • You should make sure they have the correct bank account on file to deposit your refund.  The easiest way to check is on your 2019 tax return.
  • It is not clear how they will process the refunds for those that do not have a bank account on file.  Currently the www.irs.gov/coronoavirus page says not to call the IRS, whereas, you can call 800-829-1040 to add your bank information – sort of a mixed message; you will probably have difficulty getting through.
  • A postcard will be sent out to each household with more information on where your check is going and how to give the IRS your bank account info.

I look forward to helping you in any way possible to get your 2019 Income Tax Return completed.

Please contact me as necessary.

Treasury, IRS and Labor announce plan to implement Coronavirus-related paid leave for workers and tax credits for small and midsize businesses to swiftly recover the cost of providing Coronavirus-related leave

The U.S. Treasury Department, Internal Revenue Service (IRS), and the U.S. Department of Labor (Labor) announced that small and midsize employers can begin taking advantage of two new refundable payroll tax credits, designed to immediately and fully reimburse them, dollar-for-dollar, for the cost of providing Coronavirus-related leave to their employees. This relief to employees and small and midsize businesses is provided under the Families First Coronavirus Response Act (Act), signed by President Trump on March 18, 2020.

The Act will help the United States combat and defeat COVID-19 by giving all American businesses with fewer than 500 employees funds to provide employees with paid leave, either for the employee’s own health needs or to care for family members. The legislation will enable employers to keep their workers on their payrolls, while at the same time ensuring that workers are not forced to choose between their paychecks and the public health measures needed to combat the virus.

Key Takeaways

  • Paid Sick Leave for Workers

For COVID-19 related reasons, employees receive up to 80 hours of paid sick leave and expanded paid child care leave when employees’ children’s schools are closed or child care providers are unavailable.

  • Complete Coverage

Employers receive 100% reimbursement for paid leave pursuant to the Act.

  • Health insurance costs are also included in the credit.
  • Employers face no payroll tax liability.
  • Self-employed individuals receive an equivalent credit.
  • Fast Funds

Reimbursement will be quick and easy to obtain.

  • An immediate dollar-for-dollar tax offset against payroll taxes will be provided
  • Where a refund is owed, the IRS will send the refund as quickly as possible.
  • Small Business Protection

Employers with fewer than 50 employees are eligible for an exemption from the requirements to provide leave to care for a child whose school is closed, or child care is unavailable in cases where the viability of the business is threatened.

  • Easing Compliance
    • Requirements subject to 30-day non-enforcement period for good faith compliance efforts.

To take immediate advantage of the paid leave credits, businesses can retain and access funds that they would otherwise pay to the IRS in payroll taxes. If those amounts are not sufficient to cover the cost of paid leave, employers can seek an expedited advance from the IRS by submitting a streamlined claim form that will be released next week.

Background

The Act provided paid sick leave and expanded family and medical leave for COVID-19 related reasons and created the refundable paid sick leave credit and the paid child care leave credit for eligible employers. Eligible employers are businesses and tax-exempt organizations with fewer than 500 employees that are required to provide emergency paid sick leave and emergency paid family and medical leave under the Act. Eligible employers will be able to claim these credits based on qualifying leave they provide between the effective date and December 31, 2020. Equivalent credits are available to self-employed individuals based on similar circumstances.

Paid Leave

The Act provides that employees of eligible employers can receive two weeks (up to 80 hours) of paid sick leave at 100% of the employee’s pay where the employee is unable to work because the employee is quarantined, and/or experiencing COVID-19 symptoms, and seeking a medical diagnosis. An employee who is unable to work because of a need to care for an individual subject to quarantine, to care for a child whose school is closed or child care provider is unavailable for reasons related to COVID-19, and/or the employee is experiencing substantially similar conditions as specified by the U.S. Department of Health and Human Services can receive two weeks (up to 80 hours) of paid sick leave at 2/3 the employee’s pay. An employee who is unable to work due to a need to care for a child whose school is closed, or child care provider is unavailable for reasons related to COVID-19, may in some instances receive up to an additional ten weeks of expanded paid family and medical leave at 2/3 the employee’s pay.

Paid Sick Leave Credit

For an employee who is unable to work because of Coronavirus quarantine or self-quarantine or has Coronavirus symptoms and is seeking a medical diagnosis, eligible employers may receive a refundable sick leave credit for sick leave at the employee’s regular rate of pay, up to $511 per day and $5,110 in the aggregate, for a total of 10 days.

For an employee who is caring for someone with Coronavirus, or is caring for a child because the child’s school or child care facility is closed, or the child care provider is unavailable due to the Coronavirus, eligible employers may claim a credit for two-thirds of the employee’s regular rate of pay, up to $200 per day and $2,000 in the aggregate, for up to 10 days. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Child Care Leave Credit

In addition to the sick leave credit, for an employee who is unable to work because of a need to care for a child whose school or child care facility is closed or whose child care provider is unavailable due to the Coronavirus, eligible employers may receive a refundable child care leave credit. This credit is equal to two-thirds of the employee’s regular pay, capped at $200 per day or $10,000 in the aggregate. Up to 10 weeks of qualifying leave can be counted towards the child care leave credit. Eligible employers are entitled to an additional tax credit determined based on costs to maintain health insurance coverage for the eligible employee during the leave period.

Prompt Payment for the Cost of Providing Leave

When employers pay their employees, they are required to withhold from their employees’ paychecks federal income taxes and the employees’ share of Social Security and Medicare taxes. The employers then are required to deposit these federal taxes, along with their share of Social Security and Medicare taxes, with the IRS and file quarterly payroll tax returns (Form 941 series) with the IRS.

Under guidance that will be released next week, eligible employers who pay qualifying sick or child care leave will be able to retain an amount of the payroll taxes equal to the amount of qualifying sick and child care leave that they paid, rather than deposit them with the IRS.

The payroll taxes that are available for retention include withheld federal income taxes, the employee share of Social Security and Medicare taxes, and the employer share of Social Security and Medicare taxes with respect to all employees.

If there are not sufficient payroll taxes to cover the cost of qualified sick and child care leave paid, employers will be able file a request for an accelerated payment from the IRS. The IRS expects to process these requests in two weeks or less. The details of this new, expedited procedure will be announced next week.

Examples

If an eligible employer paid $5,000 in sick leave and is otherwise required to deposit $8,000 in payroll taxes, including taxes withheld from all its employees, the employer could use up to $5,000 of the $8,000 of taxes it was going to deposit for making qualified leave payments. The employer would only be required under the law to deposit the remaining $3,000 on its next regular deposit date.

If an eligible employer paid $10,000 in sick leave and was required to deposit $8,000 in taxes, the employer could use the entire $8,000 of taxes in order to make qualified leave payments and file a request for an accelerated credit for the remaining $2,000.

Equivalent child care leave and sick leave credit amounts are available to self-employed individuals under similar circumstances. These credits will be claimed on their income tax return and will reduce estimated tax payments.

Small Business Exemption

Small businesses with fewer than 50 employees will be eligible for an exemption from the leave requirements relating to school closings or child care unavailability where the requirements would jeopardize the ability of the business to continue. The exemption will be available on the basis of simple and clear criteria that make it available in circumstances involving jeopardy to the viability of an employer’s business as a going concern. Labor will provide emergency guidance and rulemaking to clearly articulate this standard.

Non-Enforcement Period

Labor will be issuing a temporary non-enforcement policy that provides a period of time for employers to come into compliance with the Act. Under this policy, Labor will not bring an enforcement action against any employer for violations of the Act so long as the employer has acted reasonably and in good faith to comply with the Act. Labor will instead focus on compliance assistance during the 30-day period.

For More Information

For more information about these credits and other relief, visit Coronavirus Tax Relief on IRS.gov. Information regarding the process to receive an advance payment of the credit will be posted next week. 

All Taxpayers Should Know Their Rights

The Taxpayer Bill of Rights protects all taxpayers working with the IRS. In fact, they lay out the framework to make sure the IRS fairly and impartially carries out tax administration.

These rights are explained on IRS.gov and in Publication 1, Your Rights As A Taxpayer. They describe what taxpayers can expect if they need to work with the IRS on a personal tax matter, such as:
•Filing a return
•Paying taxes
•Responding to a letter
•Going through an audit
•Appealing an IRS decision

To help taxpayers understand their rights, here they are, along with links where people can go for more information.

1.The right to be informed
2.The right to quality service
3.The right to pay no more than the correct amount of tax
4.The right to challenge the IRS’s position and be heard 
5.The right to appeal an IRS decision in an independent forum
6.The right to finality
7.The right to privacy
8.The right to confidentiality
9.The right to retain representation
10.The right to a fair and just tax system


More information:
Publication 1, Your Rights As A Taxpayer, in Spanish
What the Taxpayer Bill of Rights Means for You
Taxpayer Advocate Service

Share this tip on social media — #IRSTaxTip: All taxpayers should know their rights. https://go.usa.gov/xpSgv

Gathering Records Before Preparing Tax Return Makes Filing Go Smoother

As taxpayers are getting ready to file their taxes, one of the first things they’ll do is gather their records. To avoid refund delays, taxpayers should gather all year-end income documents before filing a 2019 tax return.

It’s important for folks to have all the needed documents on hand before starting to prepare their return. Doing so helps them file a complete and accurate tax return. Here are some things taxpayers need to have before they begin doing their taxes.

  • Social Security numbers of everyone listed on the tax return. Many taxpayers have these number memorized. Still, it’s a good idea to have them on hand to double check that the number on the tax return is correct. An SSN with one number wrong or two numbers switched will cause processing delays.
  • Bank account and routing numbers. People will need these for direct deposit refunds. Direct deposit is the fastest way for taxpayers to get their money and avoids a check getting lost, stolen or returned to IRS as undeliverable.
  • Forms W-2 from employers.
  • Forms 1099 from banks and other payers.
  • Any documents that show income, including income from virtual currency transactions. Taxpayers should keep records showing receipts, sales, exchanges or deposits of virtual currency and the fair market value of the virtual currency.
  • Forms 1095-A, Health Insurance Marketplace Statement. Taxpayers will need this form to reconcile advance payments or claim the premium tax credit.
  • The taxpayer’s adjusted gross income from their last year’s tax return. People using a software product for the first time will need their 2018 AGI to sign their tax return.  Those using the same tax software they used last year won’t need to enter their prior year information to electronically sign their 2019 tax return.

Forms usually start arriving by mail or are available online from employers and financial institutions in January. Taxpayers should review them carefully. If any information shown on the forms is inaccurate, the taxpayer should contact the payer ASAP for a correction. Share this tip on social media — #IRSTaxTip: Gathering records before preparing tax return makes filing go smoother. https://go.usa.gov/xdKB6

Taxpayers Should Remember These Tips When Searching For A Tax Preparer

The time of year to start preparing your tax return is upon us.  Each person must make a decision whether you self-prepare using a filing website or purchase a program; use a franchise chain company; or find a preparer. 

Here is a quick summary and thoughts:

  • Many of the popular online filing programs are advertising heavily right now, such as Intuit’s TurboTax.
    • They advertise that you have access to a free program, but that is for only simple returns (1 W-2). 
    • To get anything more complicated it starts at $40 (discounted from $60  ) and goes to $90.
    • These prices reflect only the Federal return as there is a $40 charge for each state. For many KC residents Federal, MO & KS = $120 for a basic TurboTax return.
    • They are also advertising access to CPAs and EAs (Enrolled Agents). In checking the job process, I learned Intuit is paying these contractors in Kansas less than $25 per hour which seems very low for someone providing highly specialized knowledge and services.
  • The well-known franchise chain company’s are H&R Block, Jackson Hewitt and Liberty Tax Service. 
    • They are heavily advertising their refunds they got for taxpayers and the free instant cash back services. 
    • You will see the Liberty Statue twirling the sign to stop in for tax preparation on the street. 
    • Generally, the franchise companies charge a per form and state fee that frequently adds up quickly to be more than the teaser rate to come into their office.  Sometimes there are still fees for these extra services they are selling and most people get direct deposit refunds in less than 7 days.
    • Many of the franchise owners are CPAs or EAs, but many of the tax preparation staff assisting the taxpayer only take a 2-4 week tax preparation course with a heavy emphasis on selling additional services.
  • Independent Preparers
    • See below for information from the IRS on finding a preparer
    • Many preparers charge an hourly rate or a flat fee for preparation of a return, so the more organized and prepared you are at the appointment the fee will usually be less
    • As indicated below – do your homework and do not fall for fancy advertising of large refunds guaranteed or “free” services

The tax filing season is upon us, and many people will be looking for someone to help them file a tax return. These taxpayers should choose their tax return preparer wisely. 

This is because it’s ultimately the taxpayer who is responsible for all the information on their income tax return. It’s important for people to remember that this is true no matter who prepares the return. Here are some tips for folks to remember when selecting a preparer. Taxpayers should:

Check the Preparer’s Qualifications. People can use the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool helps taxpayers find a tax return preparer with specific qualifications. The directory is a searchable and sortable listing of preparers.

Check the Preparer’s History. Taxpayers can ask the local Better Business Bureau about the preparer. They should check for disciplinary actions and the license status for credentialed preparers. There are some additional organizations about specific types of preparers:
•Enrolled Agents: Go to the verify enrolled agent status page on IRS.gov.
•Certified Public Accountants: Check with the State Board of Accountancy.
•Attorneys: Check with the State Bar Association.

Ask about Service Fees. People should avoid preparers who base fees on a percentage of the refund or who boast bigger refunds than their competition.

Ask to e-file. The quickest way for taxpayers to get their refund is to electronically file their federal tax return and choose direct deposit.

Make Sure the Preparer is Available. Taxpayers may want to contact their preparer after this year’s April 15 due date. People should avoid “fly-by-night” preparers.

Provide Records and Receipts. Good preparers will ask to see a taxpayer’s records and receipts. They’ll ask questions to figure things like the total income, tax deductions and credits.

Never Sign a Blank Return. Taxpayers should not use a tax preparer who asks them to sign a blank tax form.

Review Before Signing. Before signing a tax return, the taxpayer should review it. They should ask questions if something is not clear. Taxpayers should feel comfortable with the accuracy of their return before they sign it. Once they sign the return, taxpayers are accepting responsibility for the information on it.

Review details about any refund. Taxpayers should make sure that their refund goes directly to them – not to the preparer’s bank account. The taxpayer should review the routing and bank account number on the completed return.

Ensure the Preparer Signs and Includes their PTIN. All paid tax preparers must have a Preparer Tax Identification Number. By law, paid preparers must sign returns and include their PTIN.

Report Abusive Tax Preparers to the IRS. Most tax return preparers are honest and provide great service to their clients. However, some preparers are dishonest. People can report abusive tax preparers and suspected tax fraud to the IRS. Use Form 14157, Complaint: Tax Return Preparer.

More information:
Need someone to prepare your tax return?

Share this tip on social media — #IRSTaxTip: Taxpayers should remember these tips when searching for a tax preparer. https://go.usa.gov/xpSg7