Tax deadline nearing

Last-minute

tax tips

By JEN RANSOM/Frontiersman reporter

During the course of the last month, the Internal Revenue Service has sent bucket-loads of tax tips and rules. Some of the more salient ones appear here. Remember, taxes are due April 15, and your best bet before sending them off is to take a few minutes to read through these tax tips ranging from employer tax schemes to common errors to avoid while filing this year.

Questionable employment tax practices

The IRS issued a consumer alert this month of eight schemes where federal employment taxes are not properly withheld or paid from their employees' paychecks. Not only is this illegal, it is actually stealing from employees. Some of the most common types of employment tax non-compliance include:

Pyramiding. Pyramiding of employment taxes is when a business withholds taxes from its employees but intentionally fails to remit them to the IRS.

Unreliable third-party payers. There are two primary categories of third-party payers: Payroll Services Providers and Professional Employer Organizations. In some instances, companies of both types of service have failed to pay the IRS the collected employment taxes. Employers are urged to use care when selecting and monitoring a third-party payer.

Mis-classified worker status. Sometimes an employer will incorrectly treat employees as independent contractors to avoid paying employment taxes.

Paying employees in cash. Paying employees in whole or partially in cash is a common method of evading income and employment taxes. While there is nothing wrong with paying employees in cash, employment taxes are due regardless of how employees are paid.

Electronic options help with tax payments

For some taxpayers, the tax filing deadline will fall on a pay day. The IRS offers options to help them pay their taxes on time. For those who cannot pay the full amount, the IRS offers special payment plans. There are three ways taxpayers can use technology to help pay their taxes: By authorizing withdrawals from their savings or checking accounts, through the Electronic Federal Tax Payment System or by charging it to certain charge cards. Taxpayers may also ask for an installment plan to pay taxes. The Installment Agreement Request allows a taxpayer to propose a monthly payment amount and date; interest and a late fee is charged for this service.

Filing extensions available by phone, computer

Automatic four-month extensions are available by phone by calling 1-888-796-1074, by computer by e-filing an extension using tax preparation software, or by paper using form 4868. Even after filing an extension, the estimated tax amount due is still required to be postmarked by April 15. If the IRS later finds the estimate to be unreasonable, the extension can be made null and void.

Common errors to avoid

To avoid frequent errors, the IRS suggests these tips:

Use the peel-off label. If you do not receive a peel-off label, fill in all requested information clearly, including Social Security numbers.

Check only one filing status on the tax return and check the appropriate exemption boxes. Enter the correct Social Security numbers for each of those exemption. Incorrect or missing Social Security numbers will cause a delay in the processing of the tax return.

If you claim the Child Tax Credit, make sure you subtract last year's advance payment amount when figuring the credit.

Use the correct Tax Table column for your filing status.

Doublecheck all figures on the return.

Make sure the financial institution routing and account numbers you have entered on the return for a direct deposit are accurate.

Sign and date the return.

Attach all necessary forms in the order listed in the attachment sequence order in the upper right corner of each form or schedule.

If you owe money, make sure your check or money order is made payable to the "United States Treasury."

Contact Jen Ransom at jen.ransom@frontiersman.com.