GREENSTEIN ROGOFF OLSEN & CO WARNS OF COMMON TAX FILING MISTAKES
“Top Ten Filing Mistakes” made on self-prepared income tax returns, according to
the IRS.
FREMONT, California, March 24, 2008 – With the federal tax filing date looming
just a week and-a-half away, Alan Olsen, Managing Partner at Greenstein Rogoff Olsen
& Co., one of the Bay Area’s top CPA firms, released the IRS’s “Top Ten Filing
Mistakes” made by those who prepare their own income tax returns. If you are preparing
your own return this year, be sure you don’t fall into one of these common traps:
1. Choosing the wrong filing status. Taxpayers should confirm that the filing
status (i.e., single, married filing jointly, married filing separately, head of
household, qualifying widower) selected on the return is correct. For example, taxpayers
often incorrectly claim “head of household” filing status without meeting the requirements
for that status. In addition to delaying the processing of the return and any refund,
designating the wrong filing status on a return also may affect a taxpayer’s eligibility
for the Earned Income Credit. The Instructions to the 2007 Form 1040 provide detailed
information to assist taxpayers in choosing their correct filing status.
2. Failing to include or using incorrect social security numbers. The names
and social security numbers for the taxpayer, taxpayer’s spouse, dependents, and
qualifying children for the Earned Income Credit or Child Tax Credit must be included
on the return exactly as they appear on the social security cards.
3. Failing to use the correct forms and schedules. Taxpayers should review
the instructions to all applicable forms and schedules to be sure they have correctly
used, and accurately completed, each form or schedule.
4. Failing to sign and date the return. Taxpayers must sign and date their
return under penalties of perjury. If the return is not signed, it will not be accepted
as filed by the Service. Both spouses must sign a joint return.
5. Claiming ineligible dependents. Taxpayers may claim a person as a dependent
only if that person meets the legal definition of a dependent. Taxpayers should
consult the Instructions to Form 1040 to confirm whether a person qualifies as a
dependent. Each dependent must have a valid social security number, which must be
included on the tax return. The failure to include a dependent’s name and social
security number, or claiming an ineligible dependent, may result in an underpayment
of tax and/or a denial of the Earned Income Credit.
6. Failing to pay and report domestic payroll taxes. Taxpayers employing
household workers, such as a house cleaner, an in-home caregiver, or a nanny, must
pay and report payroll taxes for those individuals where the payments exceed certain
threshold amounts. Failure to pay and report payroll taxes may result in the assessment
of additional tax due, interest on the unpaid amounts, and penalties. The Instructions
to the Form 1040, Publication 926 (Household Employer’s Tax Guide), and Publication
15-A (Employer’s Supplemental Tax Guide) contain detailed information to assist
taxpayers in determining whether an individual providing household help is a household
employee for whom the taxpayer must pay and report payroll taxes.
7. Failing to report income because it was not included on a Form W-2, Form 1099
or other information return. Taxpayers must report all income, even if the
income was not reported on a third-party reporting statement such as a Form W-2,
Form 1099, or other similar statement. Failure to report all income may result in
the assessment of additional tax due, interest on the unpaid amounts, and penalties.
8. Treating employees as independent contractors. Employers may not treat
an employee as an “independent contractor” to avoid paying and reporting payroll
taxes. Employers who improperly treat an employee as an independent contractor may
be liable for additional tax due, interest on the unpaid amounts, and penalties.
Publication 15-A (Employer’s Supplemental Tax Guide) contains detailed information
to assist taxpayers in determining whether an individual is an employee or an independent
contractor.
9. Failing to file a return when due a refund. Taxpayers must file a return
to claim a refund of withheld taxes when a refund is due. Taxpayers will forfeit
refunds of withheld tax if a return requesting a refund is not filed within three
years of the due date.
10. Failing to check liability for the alternative minimum tax. Taxpayers
should determine whether the alternative minimum tax, or AMT, applies. If the taxpayer
is liable for AMT, the Service may reduce or deny a requested refund or may assess
any additional tax due, interest on the unpaid amounts and penalties.
About Greenstein Rogoff Olsen & Co., LLP
Greenstein Rogoff Olsen & Co. are the CPAs for Silicon Valley's most successful
people. Consistently ranked as one of the top accounting firms in the San Francisco
Bay Area, Greenstein, Rogoff, Olsen & Co is a full service CPA firm providing
accounting, tax, financial, and strategic planning for the highly successful. In
business since 1964, GROCO has offices in Fremont, Palo Alto and San Francisco,
California. We provide consulting services
to high net-worth individuals and closely held businesses and have special expertise
in providing accounting services to the
leading Venture Capital partners in the Silicon Valley.
Our primary services include income tax planning,
income tax preparation, strategic business consulting,
business valuations, bill paying, estate planning, estate administration,
trustee services, and financial statement preparation. Our clients have participated
in building companies like Google, Skype, America Online, Oracle, Sun Microsystems,
Compaq, Macromedia, Ebay, and Genentech. Access
www.groco.com for more information.
GROCO: Trusted Advisors to the Highly Successful - Since 1964.
FOR IMMEDIATE RELEASE
Media Contact:
Dennis Wolfe
P: 510.797.8661
F: 510.797.1791
dwolfe@groco.com
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