Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 6, 1991 TAG: 9104060076
SECTION: BUSINESS PAGE: A-7 EDITION: METRO
SOURCE: MAG POFF/ BUSINESS WRITER
DATELINE: LENGTH: Medium
But even under the deadline pressure, be careful. The Virginia Society of Certified Public Accountants has warned that simple mistakes in the last-minute crunch can do more than slow processing of your tax form. It will draw attention of the Internal Revenue Service to your return.
The society has offered a checklist to help taxpayers avoid the most common errors people make in the eleventh-hour rush:
Check the correct filing status box. Your filing status is important because it dictates the tax rate you will use to calculate your tax liability. It also determines whether you are eligible to claim certain exemptions, deductions and credits. But it's easy to overlook this little check mark.
Review your W-2 and 1099 forms. Your return should include a W-2 form from each employer for whom you worked during 1990, listing wages and the amount withheld for income and Social Security taxes.
Banks, brokerage firms and other institutions issue 1099 forms to report interest and dividends on investments. The forms are not attached to returns unless they show tax withholding.
The society warned that income from the W-2 and 1099 forms has been reported to the government. Be certain that all of this money is listed on the tax return.
Provide Social Security numbers for dependents. You must report the number for any dependent who was at least 2 years old by the end of 1990. Next year, you will have to show the number for a 1-year-old child. Failure to list this number could result in a $50 penalty.
If you claim a tax credit for child or other dependent care, you must provide the Social Security or taxpayer identification number of the care provider, along with the provider's name and address.
Check your math. Or better yet, get someone else to go over your arithmetic.
If you change a figure, determine if the amendment affects numbers elsewhere on the return. If you choose to round off figures to the nearest dollar, you must be consistent and round off all entries on the return and schedules.
Sign the return. The CPAs warned that failure to sign a return - including two signatures on a joint return - can have serious consequences. The IRS may treat an unsigned return as if it had never been filed, resulting in a penalty of 5 percent of the net tax for each month the return is late up to a maximum of 25 percent.
If necessary, file for an extension. If you cannot file your return or cannot pay, you still must take some action by next Monday.
If you are simply unprepared to file a documented tax return, the worst mistake you can make is failing to file for an extension.
You can submit the one-page Form 4868 by April 15. It requires you to estimate your tax liability for 1990 and pay any tax due. Filing the form automatically gives you four additional months, or until Aug. 15, to prepare and file the tax return.
If you fail to pay the tax when you file for the extension, you face assessment of interest and possible penalties.
The amount you send with the extension form must be at least 90 percent of your 1990 tax. The CPAs said making that calculation can be tricky if you have several sources of income and many deductions.
If you really cannot pay by April 15, that is you have no way of coming up with the money to pay the tax bill by next Monday, the CPAs said, you can submit a second form, Form 1127, along with your request for an extension.
But you should not simply ignore the problem.
Form 1127 requires you to document the details of any extraordinary hardship preventing you from paying your taxes on time.
The Virginia CPAs said you must prove that you do not have - and cannot borrow - the cash, capital or assets needed to pay the amount of the tax you owe by next Monday.
by CNB