Wilno Tax Service

06/24/2016

The Government’s Secret Plan to Force 2.5 Million Seniors to Pay More Tax— Coming April 2017
by Zach Scheidt

Zach Scheidt2016 will be a historic year for the IRS.

It has nothing to do with efficient collections, solid revenue or any other type of internal statistic.

Instead, 2016 will be remembered as the year the first baby boomers turned 70 years old, marking the beginning of required minimum distributions from the retirement accounts of our nation’s largest demographic.

If you weren’t aware, American seniors are forced to take mandatory withdrawals from their retirement accounts starting at 70.5 years old. This means that America’s baby boomers must start removing money from their savings even if they already have a sufficient stream of retirement income to pay government taxes.

The reason is simple. The U.S. government wants to make sure that money gets taxed sooner, rather than later.

By April 1, 2017, a wave of revenue is getting ready to flow into Uncle Sam’s pocket due to the sheer number of baby boomers that will be forced to take withdrawals.

Mandatory withdrawals are another part of our government’s “war on savers.” They are to ensure individuals aren’t using retirement accounts as a vehicle to pass inheritance and to forcefully generate tax revenue for the U.S. government.

How much are we talking about?

The general “uniform” minimum distribution can be found using the table below. To determine your required minimum distribution, divide your total retirement account value by the distribution period found next to your age.

Uncle Sam Is Coming for Your Savings

Source: Bankrate.com

For example, if you are 72 years old and have a $400,000 retirement account, divide $400,000 by 25.6 to get $15,625 as a minimum distribution. That means you MUST take out $15,625 for the current year and pay taxes like it was regular income. If you do not complete the withdrawal, you will face a 50% fine on the amount that was supposed to be taken out. If you are nearing age 70, this is not something you want to ignore!

The distribution period is based off of life expectancy, which means the government has devised mandatory withdrawals expecting individuals to live until they are approximately 98 years old. You might know the actual life expectancy in America is 79, but the government has to use a higher number because individuals who live past the current life expectancy would have their funds withdrawn too quickly. This is actually better for your wallet, because distributions are smaller and spread out over a larger period of time.

While mandatory withdrawals can be a hassle and tax burden, there are ways to reduce your minimum distribution and ultimately save more in retirement. Today I’ll share a few strategies with you.

Of the many retirement accounts an individual can use, the most popular are the traditional 401(k), Roth IRA, traditional IRA and Roth 401(k). The names are similar and may be hard to differentiate, but after comparing them side by side, it is easy to see what attributes correspond with each particular account. It is important to know how they vary, because they have different rules regarding taxes and distributions.

To make things simple, think of things this way: If the account has “Roth” in front of it, you deposit your post-tax earnings and they grow tax free. That means when you withdraw after a certain age, you won’t pay a cent in capital gains tax or income tax. (Since Roth funds are already taxed, this isn’t the money the government is after.)

For the traditional IRA and 401(k), your initial deposit is from pretax dollars or is tax deductible, and then you pay income tax when you withdraw after a certain age.

The chart below compares the accounts according to their tax requirements when you deposit and withdraw.

Account Types

Of the four accounts mentioned above, the only type of account that doesn’t require a minimum distribution is the Roth IRA. Because of this feature, it is through the use of the Roth IRA that you can lower the minimum distribution and potentially save a decent portion of your tax bill.

Now remember, I’m not a tax professional. And while everyone’s financial situation is different, the following strategies may be beneficial in reducing both your taxes and minimum distributions.

Minimize Your Taxes and Distributions by Rolling Over Your 401(k) or Traditional IRA to a Roth IRA

As you may know, putting money in a 401(k) or traditional IRA is a great way to grow your retirement savings with tax-deferred benefits. The only problem is — when you withdraw funds from these accounts, you are taxed as if it were regular income. Rolling over your 401(k) or traditional IRA to a Roth IRA is a great way to reduce your overall tax bill, decrease required withdrawals and grow your money tax free.

Rolling over is easy. You simply contact the manager of your 401(k) or IRA and tell them you want to roll funds over to the account of your choice. Usually, they will complete the transaction for you, but sometimes they will send you a check for the amount you want to roll over and you will have 60 days to deposit the funds into your new account.

In most cases, a simple analysis of your current and expected tax bracket will determine if rolling over is right for you.

If you expect your income to rise, therefore putting you in a higher tax bracket, then it might be beneficial to roll your 401(k) or traditional IRA into a Roth IRA, because you will pay less taxes now than you would in the future.

Take a look at the current tax brackets shown below:

2016 Estimated Income Tax Brackets
Source: taxfoundation.org

Say you are 59½ years old with $150,000 in your 401(k). If you were to roll over your funds to a Roth IRA, you would pay the maximum 28% tax rate when you first withdraw, but your money would grow tax free for the rest of your life. If your Roth IRA grows at a modest rate and is worth $250,000 10 years down the line, you won’t pay another cent in taxes on that money!

However, if you had left the funds within your 401(k), you would owe taxes on the entire balance if you were to withdraw. Since your account grew into the next tax bracket, you would owe more taxes than if you had rolled over into a Roth IRA. If your 401(k) grew to $250,000 like in the example above, you would owe 33% tax on the funds from $190,150–250,000. The rollover would have saved you thousands. On top of saving you money, the rollover into a Roth IRA now means you can forget about mandatory distributions.

If rolling over your account would be unaffordable due to the tax cost or put you in a higher tax bracket itself, another option would be to roll over a portion of your 401(k) or IRA for the amount that would take you up to the maximum of your current tax bracket. You can roll over once a year, so take advantage by maximizing your yearly tax bracket. When it’s time to take minimum distributions, you’ll take out less and have a lower tax bill.

Convert From a Roth 401(k) to Roth IRA — No Tax Paid, No Required Distribution

If you have funds within a Roth 401(k), rolling over these funds to a Roth IRA is a great way to reduce your required minimum distributions.

Because you already paid taxes when depositing into your Roth 401(k), you would not owe taxes when rolling over to a Roth IRA. Your Roth IRA will then grow tax free and without any required minimum distributions. You can keep your money in the Roth IRA for as long as you like!

The only thing is in order to make a qualified distribution from a Roth 401(k), the account must have been open for at least five years and the individual holding the account at least 59½ years old. When you roll over to a Roth IRA, you must wait an additional five years before you can withdraw that money.

Minimum distributions are a hassle, so speak with your tax professional today and see if rolling over to a Roth IRA is right for you. Everyone’s financial situation is unique, so a strategy that works well for one might not work well for all. Your tax professional will create a personalized strategy that will potentially save you thousands.

The government wants to get their hands on your money, but remember there are ways to fight back! The sooner you start planning for required minimum distributions, the more you can potentially save when the IRS comes knocking.

Here’s to growing your income,

Zach Scheidt
Editor, Lifetime Income Report

04/13/2016

IRS Warns of Continued Scams, Varied Tactics as the Tax Deadline Nears

WASHINGTON — The Internal Revenue Service today issued a warning that scammers may try using the April 18 tax deadline to prey on hard-working taxpayers by impersonating the IRS and others with fake phone calls and emails. Even after the tax deadline passes, taxpayers should know the telltale signs of a scam and tips to protect themselves from a variety of phone scams and phishing emails.

"We’ve seen continuing activity in these scams throughout the filing season," said IRS Commissioner John Koskinen. "As the tax deadline nears, these criminals may try and trick honest taxpayers over the phone or via email, and people should remain vigilant. After the tax deadline, watch out for these scammers promising a refund or threatening you with an unexpected tax bill."

These scam artists frequently masquerade as being from the IRS, a tax company and sometimes even a state revenue department. By email, they try enticing people to click on links on official-looking messages containing questions related to their tax refund. Report these emails to [email protected]. By phone, many scammers use threats to intimidate and bully people into paying a tax bill. They may even threaten to arrest, deport or revoke the driver’s license of their victim if they don’t get the money.

Variations of these scams can be seen nationwide, and it’s more important than ever to be cautious with providing personal or financial information. As part of the effort to protect taxpayers, the IRS has teamed up with state revenue departments and the tax industry to make sure taxpayers understand the dangers to their personal and financial data as part of the “Taxes. Security.Together” campaign. Some examples of the varied tactics seen this year are:

Soliciting W-2 information from payroll and human resources professionals--IR-2016-34
“Verifying” tax return information over the phone--IR-2016-40
Pretending to be from the tax preparation industry--IR-2016-28
There are some important reminders for taxpayers nationwide about these schemes:

Watch Out for Threatening Phone Calls

Beware of scammers making unsolicited calls claiming to be IRS officials. They demand that the victim pay a bogus tax bill. They con the victim into sending cash, usually through a prepaid debit card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls,” or via a phishing email.

Scammers often alter caller ID numbers to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legitimate. They may use the victim’s name, address and other personal information to make the call sound official.

The IRS Will Never:

Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you a bill.
Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
Require you to use a specific payment method for your taxes, such as a prepaid debit card.
Ask for credit or debit card numbers over the phone.
If you get a phone call from someone claiming to be from the IRS and asking for money and you don’t owe taxes, here’s what you should do:

Do not give out any information. Hang up immediately.
Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page or call 800-366-4484.
Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
If you think you might owe taxes, call the IRS directly at 1-800-829-1040.
Avoid e-mail phishing attempts

There has been a surge in e-mail scams this year that appear to be from a tax agency or a tax software company.

Never reply to emails, texts or pop-up messages asking for your personal, tax or financial information. One common trick by criminals is to impersonate a business such as your financial institution, tax software provider or the IRS, asking you to update your account and providing a link. For small business, these schemes may try impersonating a company leader and request payroll and human resource information for employees in your company. Never click on links even if they seem to be from organizations you trust. Go directly to the organization’s website.

And if it sounds too good to be true, it probably is. If you see an email that says ‘You won a free cruise’ or ‘The IRS has a refund waiting for you,’ odds are high that it is a phishing attempt looking to get your personal information.

If you get a ‘phishing’ email, remember this important advice:

Don’t reply to the message.
Don’t give out your personal or financial information.
Forward the email to [email protected]. Then delete it.
Don’t open any attachments or click on any links. They may have malicious code that will infect your computer.
More information on how to report phishing or phone scams is available on IRS.gov.

03/14/2016

Consumer Alert: Scammers Change Tactics, Once Again

WASHINGTON — Aggressive and threatening phone calls by criminals impersonating IRS agents remain a major threat to taxpayers, but now the IRS is receiving new reports of scammers calling under the guise of verifying tax return information over the phone.

The latest variation being seen in the last few weeks tries to play off the current tax season. Scam artists call saying they have your tax return, and they just need to verify a few details to process your return. The scam tries to get you to give up personal information such as a Social Security number or personal financial information, such as bank numbers or credit cards.

“These schemes continue to adapt and evolve in an attempt to catch people off guard just as they are preparing their tax returns,” said IRS Commissioner John Koskinen. “Don’t be fooled. The IRS won’t be calling you out of the blue asking you to verify your personal tax information or aggressively threatening you to make an immediate payment.”

The IRS reminds taxpayers to guard against all sorts of con games that continually change. The IRS, the states and the tax industry came together in 2015 and launched a public awareness campaign called Taxes. Security. Together. to help educate taxpayers about the need to maintain security online and to recognize and avoid “phishing” and other schemes.

The IRS continues to hear reports of phone scams as well as e-mail phishing schemes across the country.

“These schemes touch people in every part of the country and in every walk of life. It’s a growing list of people who’ve encountered these. I’ve even gotten these calls myself,” Koskinen said.

This January, the Treasury Inspector General for Tax Administration (TIGTA) announced they have received reports of roughly 896,000 phone scam contacts since October 2013 and have become aware of over 5,000 victims who have collectively paid over $26.5 million as a result of the scam. Just this year, the IRS has seen a 400 percent increase in phishing schemes.

Protect Yourself

Scammers make unsolicited calls claiming to be IRS officials. They demand that the victim pay a bogus tax bill. They con the victim into sending cash, usually through a prepaid debit card or wire transfer. They may also leave “urgent” callback requests through phone “robo-calls,” or via a phishing email. They’ve even begun politely asking taxpayers to verify their identity over the phone.

Many phone scams use threats to intimidate and bully a victim into paying. They may even threaten to arrest, deport or revoke the license of their victim if they don’t get the money.

Scammers often alter caller ID numbers to make it look like the IRS or another agency is calling. The callers use IRS titles and fake badge numbers to appear legitimate. They may use the victim’s name, address and other personal information to make the call sound official.

Here are some things the scammers often do but the IRS will not do. Any one of these five things is a tell-tale sign of a scam.

The IRS will never:

Call to demand immediate payment over the phone, nor will the agency call about taxes owed without first having mailed you several bills.
Call or email you to verify your identity by asking for personal and financial information.
Demand that you pay taxes without giving you the opportunity to question or appeal the amount they say you owe.
Require you to use a specific payment method for your taxes, such as a prepaid debit card.
Ask for credit or debit card numbers over the phone or email.
Threaten to immediately bring in local police or other law-enforcement groups to have you arrested for not paying.
If you get a phone call from someone claiming to be from the IRS and asking for money or to verify your identity, here’s what you should do:

If you don’t owe taxes, or have no reason to think that you do:

Do not give out any information. Hang up immediately.
Contact TIGTA to report the call. Use their “IRS Impersonation Scam Reporting” web page. You can also call 800-366-4484.
Report it to the Federal Trade Commission. Use the “FTC Complaint Assistant” on FTC.gov. Please add “IRS Telephone Scam” in the notes.
If you know you owe, or think you may owe tax:

Call the IRS at 800-829-1040. IRS workers can help you.
Stay alert to scams that use the IRS as a lure. Tax scams can happen any time of year, not just at tax time. For more, visit “Tax Scams and Consumer Alerts” on IRS.gov.

Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are your Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov.

03/09/2016

Failure to File Penalty Increase

On February 24, 2016, the President signed into law H.R. 644, the Trade Facilitation and Trade Enforcement Act of 2015. The law authorizes U.S. Customs and Border Protection to put in place tools to strengthen trade enforcement at the border and facilitate the efficient movement of legitimate trade and travel. The law contains one amendment to the Internal Revenue Code.

Under IRC section 6651, the failure to file penalty is equal to 5% of the amount of tax shown on the return if the failure to file is for not more than one month, with an additional 5% for each additional month or fraction thereof during which such failure continues, not to exceed 25% in the aggregate. If the tax return is more than 60 days late, the penalty is at least the lesser of $135 or 100% of the amount required to be shown as tax on the return. If both the failure to file penalty and the failure to pay penalty applies, the failure to file penalty is reduced by the amount of the failure to pay penalty. In no case is there a late filing penalty if the taxpayer is due a refund.

New law. Effective for returns required to be filed in calendar years after 2015, the $135 minimum penalty amount is increased to the lesser of $205 or 100% of the amount required to be shown as tax on the return. The new $205 minimum amount is indexed annually for inflation.

03/09/2016

Tax Savings from Higher Education Costs

Money you paid for higher education in 2015 can mean tax savings in 2016. If you, your spouse or your dependent took post-high school coursework last year, there may be a tax credit or deduction for you. Here are some facts from the IRS about key tax breaks for higher education.

The American Opportunity Credit (AOTC) is:

Worth up to $2,500 per eligible student.
Used only for the first four years at an eligible college or vocational school. For students earning a degree or other recognized credential. For students going to school at least half-time for at least one academic period that started during or shortly after the tax year. Claimed on your tax return using Form 8863, Education Credits.

The Lifetime Learning Credit (LLC) is:

Worth up to $2,000 per tax return, per year, no matter how many students qualify. For all years of higher education, including classes for learning or improving job skills.Claimed on your tax return using Form 8863, Education Credits.

The Tuition and Fees Deduction is:

Claimed as an adjustment to income.
Claimed whether or not you itemize.
Limited to tuition and certain related expenses required for enrollment or attendance at eligible schools.
Worth up to $4,000.

Additionally:

You should receive Form 1098-T, Tuition Statement, from your school by Feb. 1, 2016. Your school also sends a copy to the IRS.
You may only claim qualifying expenses paid in 2015.
You can’t claim either credit if someone else claims you as a dependent.You can’t claim either AOTC or LLC and the Tuition and Fees Deduction for the same student or for the same expense, in the same year.Income limits could reduce the amount of credits or deductions you can claim.The Interactive Tax Assistant tool on IRS.gov can help you check your eligibility.

02/25/2016

Where’s My Refund?

Taxpayers expecting a federal refund via direct deposit can usually expect to receive the refund in less than 21 days after their return has been accepted.

Taxpayers with accepted federal returns who are expecting a refund can check the status of their refund using the online tool, Where’s My Refund?. Go to: www.irs.gov and then clicking on Get Your Refund Status is the fastest and easiest way to get up-to-date refund information. The site is usually updated once every 24 hours and provides a personalized refund issue date for the taxpayer.

To check the status of a refund, taxpayers will need their:

Social Security Number
Filing Status
Exact Refund Amount

02/24/2016

Here’s What You Need to Do with Your Form 1095-B

This year, you may receive one or more forms that provide information about your 2015 health coverage you had in 2015. These forms are 1095-A, 1095-B and 1095-C. This tip is part of a series that answers your questions about these forms.

Form 1095-B, Health Coverage, provides you with information about your health care coverage if you, your spouse or your dependents enrolled in coverage through an insurance provider or self-insured employer last year.

Here are the answers to questions you’re asking about Form 1095-B:

Will I get a Form 1095-B?

You will receive Form 1095-B - which is a new form this year – from your insurance provider if you had insurance for you or your family members.
The term “health insurance providers” includes insurance companies, some self-insured employers, and government agencies that run Medicare, Medicaid or CHIP.
You are likely to get more than one form if:
You had coverage from more than one provider
You changed coverage or employers during the year
If different members of your family received coverage from different providers
How do I use the information on my Form 1095-B?

This form provides information about your health coverage, including who was covered, and when the coverage was in effect.
If Form 1095-B, Part IV, Column (d), shows coverage for you and everyone in your family for the entire year, you can simply check the full-year coverage box on your tax return.
If you did not have coverage for the entire year, use Form 1095-B, Part IV, Column (e), to determine the months when you or your family members had coverage. If there were months that you did not have coverage, you should determine if you qualify for an exemption from the requirement to have coverage. If not, you must make an individual shared responsibility payment.
You are not required to file a tax return solely because you received a Form 1095-B if you are otherwise not required to file a tax return.
Do not attach Form 1095-B to your tax return - keep it with your tax records.
What if I don’t get my Form 1095-B?

You might not receive a Form 1095-B by the time you are ready to file your 2015 tax return, and it is not necessary to wait for it to file.
The information on these forms may assist in preparing a return, and you, however you can prepare and file your return using other information about your health insurance.
The IRS does not issue and cannot provide you with your Form 1095-B. For questions about your Form 1095-B, contact the coverage provider. See line 18 of the Form 1095-B for a contact number.
Depending upon your circumstances, you might also receive Forms 1095-A and 1095-C. For information on these forms, see our Questions and Answers about Health Care Information Forms for Individuals.

02/22/2016

Six Reasons to Choose Direct Deposit for Your Tax Refund

When you file your taxes, you have options on how to receive your refund. The best way to get it is by direct deposit. Eight out of 10 taxpayers get their refunds by direct deposit. Here are six good reasons why you should do the same in 2016:

IRS Direct Deposit:

1. Is Fast. The fastest way to get your refund is to electronically file your federal tax return and use direct deposit. Use IRS Free File to prepare and e-file your federal return for free. You can still use direct deposit even if you file a paper tax return.

2. Is Secure. Since your refund goes directly into your account, there’s no risk of having your refund check stolen or lost in the mail. This is the same electronic transfer system used to deposit nearly 98 percent of all Social Security and Veterans Affairs benefits into millions of accounts.

3. Is Convenient. With direct deposit, your refund goes directly into your bank account. There’s no need to wait for your check to come in the mail.

4. Is Easy. Choosing direct deposit is easy. When you e-file, just follow the instructions in the tax software. If you file a paper return, the tax form instructions will guide you. Make sure that you enter the correct bank account and routing number.

5. Has Options. You can split your refund into several financial accounts. These include checking, savings, health, education and certain retirement accounts. Beginning this year, there is a new retirement account offered by the U.S. Treasury Department. It’s called a MyRA account and you can designate all or a portion of your refund to a new MyRA account if you mark the “savings” box in the refund section of your return. Use IRS Form 8888, Allocation of Refund (including Savings Bond Purchases), to deposit your refund in up to three accounts. Don’t use Form 8888 to designate part of your refund to pay your tax preparer.

6. Saves Money. Direct deposit also saves you money. It costs the nation’s taxpayers more than $1 for every paper refund check issued but only a dime for each direct deposit made.

You should deposit your refund into accounts in your own name, your spouse’s name or both. Avoid making a deposit into accounts owned by others. Some banks require both spouses’ names on the account to deposit a tax refund from a joint return. Check with your bank for their direct deposit requirements.

There is a limit of three electronic direct deposit refunds made into a single financial account or pre-paid debit card. Taxpayers who exceed the limit will receive an IRS notice and a check refund in the mail. Helpful tips about direct deposit and the split refund option are available in Publication 17, Your Federal Income Tax. You can view, download and print tax products on IRS.gov/forms anytime.

Annual income tax return filed by citizens or residents of the United States.Related: Instructions for Form 1040, Instructions for 1040 Tax Table

02/08/2016

Inflated Refund Claims Again Made the IRS “Dirty Dozen” List of Tax Scams for the 2016 Filing Season

IR-2016-18, Feb. 8, 2016

WASHINGTON — The Internal Revenue Service today warned taxpayers to be on the lookout for unscrupulous tax return preparers pushing inflated tax refund claims. This scam remains on the annual list of tax scams known as the “Dirty Dozen” for the 2016 filing season.

"Be wary of tax preparers that tout outlandish refunds based on federal benefits or tax credits you've never heard of or weren't eligible to claim in the past," said IRS Commissioner John Koskinen. "Taxpayers should choose preparers who file accurate returns."

Compiled annually, the “Dirty Dozen” lists a variety of common scams that taxpayers may encounter any time but many of these schemes peak during filing season as people prepare their returns or hire someone to help with their taxes.

Illegal scams can lead to significant penalties and interest and possible criminal prosecution. IRS Criminal Investigation works closely with the Department of Justice (DOJ) to shutdown scams and prosecute the criminals behind them.

Don't Fall Victim to Promises of Outlandish Refunds

Scam artists routinely pose as tax preparers during tax time, luring victims in by promising large federal tax refunds or refunds that people never dreamed they were due in the first place.

Scam artists use flyers, advertisements, phony store fronts and even word of mouth to throw out a wide net for victims. They may even spread the word through community groups or churches where trust is high. Scammers frequently prey on people who do not have a filing requirement, such as low-income individuals or the elderly. They also prey on non-English speakers, who may or may not have a filing requirement.

Scammers build false hope by duping people into making claims for fictitious rebates, benefits or tax credits. They charge good money for very bad advice. Or worse, they file a false return in a person's name and that person never knows that a refund was paid.

Scam artists also victimize people with a filing requirement and due a refund by promising inflated refunds based on fictitious Social Security benefits and false claims for education credits, the Earned Income Tax Credit (EITC), or the American Opportunity Tax Credit, among others.

The IRS sometimes hears about scams from victims complaining about losing their federal benefits, such as Social Security benefits, certain veteran’s benefits or low-income housing benefits. The loss of benefits was the result of false claims being filed with the IRS that provided false income amounts.

While honest tax preparers provide their customers a copy of the tax return they’ve prepared, victims of scams frequently are not given a copy of what was filed. Victims also report that the fraudulent refund is deposited into the scammer’s bank account. The scammers deduct a large “fee” before paying victims, a practice not used by legitimate tax preparers.

The IRS reminds all taxpayers that they are legally responsible for what’s on their returns even if it was prepared by someone else. Taxpayers who buy into such schemes can end up being penalized for filing false claims or receiving fraudulent refunds.

Taxpayers can help protect themselves by doing a little homework before picking preparers who make refund claims that may sound too good to be true.

Start with the IRS Directory of Federal Tax Return Preparers with Credentials and Select Qualifications. This tool can help taxpayers find a tax return preparer with the right qualifications. The Directory is a searchable and sortable listing of certain preparers registered with the IRS. It includes the name, city, state and zip code of:

Attorneys
CPAs
Enrolled Agents
Enrolled Retirement Plan Agents
Enrolled Actuaries
Annual Filing Season Program participants
Also check the preparer’s history. Ask the Better Business Bureau about the preparer. Check for disciplinary actions and the license status for credentialed preparers. For CPAs, check with the State Board of Accountancy. 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 Directory.

To find other tips about choosing a preparer, better understand the differences in credentials and qualifications, research the IRS preparer directory, and learn how to submit a complaint regarding a tax return preparer, visit www.irs.gov/chooseataxpro.

A tax return preparer is trusted with your most personal information. They know about your marriage, your income, your children and your social security numbers – the details of your financial life.