April 15 Archives - EricJohn Ltd | Tax and Accounting Services

February 3, 2017February 15, 2017

Warning! Warning!

The Internal Revenue Service says it is especially worried about the spread of an email phishing scheme to schools, hospitals and nonprofit organizations. The federal tax agency today issued an “urgent alert” warning employers about the potential for identity theft from W-2 forms.

“This is one of the most dangerous email phishing scams we’ve seen in a long time” said IRS Commissioner John Koskinen. “It can result in the large-scale theft of sensitive data that criminals can use to commit various crimes, including filing fraudulent tax returns.”

Employees of those institutions – particularly those working in payroll or human resources departments – should be especially wary in dealing with requests for W-2 forms, the IRS announced.

The online thieves typically send an email to a worker in a payroll or HR department, asking for a list of employees and their W-2s. The main trickery involves email addresses. The thieves “spoof,” or disguise, the address to look like the email came from a company executive.

When the worker sends the list, the scammers get valuable information, such as Social Security numbers, wage data, residential names and addresses, etc., which can be used to file phony tax returns, open credit cards or steal in other ways,

The phishing ploys were around last year, too, but they occurred heavily in the corporate world. Now they’ve spread to school districts, hospitals, nonprofits, employment agencies and even tribal organizations, among others. This year, the online thieves not only are bilking a broader range of businesses, but they also are striking earlier in the tax reporting season, the IRS and a group of cooperating tax agencies and industry groups called the Security Summit warned.

Some scammers also have used a more sophisticated version. They’ve teamed up the phishing scam with a wire transfer of money, again supposedly requested by the organization’s executive. “Some companies have lost both employees’ W-2s and thousands of dollars due to wire transfers,” The IRS said in its alert.

Feel free to contact us at EricJohn Ltd. for more information about business and individual taxes.

April 14, 2015

DOWN-TO-THE -WIRE TAX ACTION

If you won’t have your federal (and state) tax returns ready by the end of the day on Wednesday (April 15), it’s probably time to join the millions of taxpayers asking for an extension.

The extension adds another six months to the deadline, making it Oct. 15. The IRS won’t ask you why you need it. BUT – and it can be a big “but” – the IRS still expects you to estimate income and pay any taxes by the normal deadline.

You accomplish that on Form 4868 or “Application for Automatic Extension of Time to File U.S. Individual Income Tax Return.” The extension generally is automatic. For a copy, see http://www.irs.gov/pub/irs-pdf/f4868.pdf.

The clock is ticking with this. Whether you’re sending it electronically or by “snail mail,” it must be recorded or postmarked by the end of the day on April 15 to avoid penalties.

Now, from a technical standpoint, if you are absolutely certain that you will not owe any income taxes, you don’t need to file Form 4868. You can file your normal 1040 return later in order to capture your refund.

However, to be safe, we at EricJohn Ltd. advise filing the application for extension, whether or not you think you need it. Miscalculations can happen, and there is a late filing penalty in addition to late payment penalties for any unpaid tax.

WHAT THE IRS WANTS
In a nutshell, an extension is not valid unless your tax liability is estimated properly, using available information. Don’t break out in a sweat just yet! You can come up with a reasonable estimate. As a starting point, did you make more or less money than a year ago?

If you have some figures, work with that information, even if you are missing some income or expenses. Then make a good faith estimate of what you owe. Spending the time to pull together realistic figures could save you hundreds – maybe even thousands – in tax penalties.

Next, send a tax payment based on your estimate! You can do that electronically at the IRS web site (www.irs.gov) or enclose a check in the envelope. But don’t omit that step, even if your estimate is shaky.

Finally, don’t forget any state taxes you owe. In Minnesota, you don’t have to file an extension form. BUT – just as with the federal return – you must pay tax due to avoid penalties.

Minnesota Department of Revenue also accepts tax payments through its Web site. Here’s a pointer about extensions and payments: http://www.revenue.state.mn.us/individuals/individ_income/Pages/Filing_Extensions.aspx.

We at EricJohn Ltd. wish you easy and accurate filings for Tax Day!

April 11, 2015

DETAILS, DETAILS, DETAILS!

It’s just days, maybe hours, until the filing deadline for federal and Minnesota income taxes. What can we taxpayers do to beat the clock and make sure we get our due, too?

The Minnesota Department of Revenue offers some tips on avoiding errors. The hints make Revenue’s job easier; at the same time, some also can speed up refunds. And some are common sense:

o Use official names shown on Social Security cards. This is not the place to abbreviate “David John” to “D.J.” The computers that process returns aren’t amused by nicknames. Speaking of accuracy, don’t take your W-2s for granted just because they came from your employer.

o Check and re-check Social Security numbers and account numbers for direct deposit of refunds. Come to think of it check all the numbers on your federal 1040 or state M1 returns – especially if you calculated by hand. We all make mistakes, and they can be costly on a tax return.

o File some type of return or ask for an extension by April 15, and pay as much of what you owe as possible. This is a situation in which something is a much better than nothing! The paperwork might linger with an extension, but the taxes are due.

o Minnesota Revenue advises you to pay your taxes electronically, if possible. Both state and federal governments both have been urging online payments because they are quicker and easier to process. If you’re expecting a refund, choose direct deposit to one of your bank accounts. Going direct makes it easier on Revenue and faster for you.

o If you’ve moved into or out of Minnesota, make sure your tax refund or other letter notices will follow. In Minnesota, place an X in the “New Address” box. Revenue’s processing machines might not pick up an address change if that box isn’t checked. In fact, it’s a good idea to tell the tax people where you are immediately after a move.

A tax preparer typically will check on details like these; it’s one advantage of dealing with a pro. If you’re not quite prepared for Tax Day, give us a shout at EricJohn Ltd. We can help in the rush!