e-News for Small Business, Issue 2019-14
Inside This Issue
1. In the news: IRS automatically waives estimated tax penalty for eligible 2018 filers
The IRS recently announced it is automatically waiving the estimated tax penalty for eligible taxpayers who already filed their 2018 federal income tax returns but did not claim the waiver. Many business owners, especially self-employed individuals who received income subject to withholding, would qualify for this relief.
The waiver applies to any individual taxpayer who paid at least 80% of their total tax liability through federal income tax withholding, or quarterly estimated tax payments, but did not claim the waiver when they filed their 2018 return.
The agency also removed the requirement that estimated tax payments be made in four equal installments, as long as they were all made by Jan. 15, 2019.
For more information, see the IRS news release: IRS automatically waives estimated tax penalty for eligible 2018 filers.
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2. Truckers: File your highway use tax by Sept. 3
Truck drivers who have registered, or are required to register, a heavy highway vehicle with a taxable gross weight of 55,000 pounds or more must file Form 2290, Heavy Highway Vehicle Use Tax, and pay any tax due by the deadline.
For most Form 2290 taxpayers, the deadline is Tuesday, Sept. 3, for vehicles used on the road in July. The deadline is later this year because the normal due date, Aug. 31, falls on a Saturday, and Monday, Sept. 2, is a federal holiday.
The IRS encourages trucking business owners to take advantage of the speed and convenience of e-filing the form and e-paying the tax. E-filers receive their IRS-stamped Schedule 1 electronically minutes after filing. A printout of the schedule can then be provided to the state department of motor vehicles, without visiting an IRS office. IRS.gov contains a list of IRS-approved e-file providers.
For more information, visit the IRS Trucker Tax Center.
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3. Self-employed individuals should be aware of the changes to OIC low-income application fees
Effective July 2, 2019, the Taxpayer First Act added an extra method the IRS must use in determining the low-income certification threshold necessary to waive the application fee for an Offer in Compromise (OIC).
Taxpayers can apply to be considered for an OIC if they can’t pay their full tax liabilities, or if doing so would create a financial hardship. Offers currently require a $186 application fee to cover the cost of processing.
The IRS already waives the application fee for certified low-income taxpayers. However, the new method for determining eligibility for the waiver now uses the adjusted gross income (AGI) from the taxpayer’s most recent tax return.
Taxpayers who do not qualify based on their AGI may still qualify as low-income if their household’s gross monthly income for 12 months falls at or below 250% of the poverty guidelines listed in Form 656 (PDF).
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4. Security Summit warns of new IRS impersonation email scam; reminds taxpayers the IRS does not send unsolicited emails
Last week, the IRS detected this new scam about unsolicited emails from IRS imposters. The email subject line may vary, but recent examples use the phrase “Automatic Income Tax Reminder” or “Electronic Tax Return Reminder.”
The emails contain a “temporary password” or “one-time password” to “access” the files to submit the refund. But when taxpayers try to access these, they infect their computers with malware. The imposters may then gain control of the taxpayer’s computer or secretly download software that tracks every keystroke, eventually giving them passwords to sensitive accounts, such as financial accounts.
Remember, the IRS doesn’t initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. This includes requests for PIN numbers, passwords or similar access information for credit cards, banks or other financial accounts.
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5. “U.S. Territories – Self-Employment Tax” webinar now archived and available for viewing
Topic: U.S. Territories – Self-Employment Tax
Aired: Wednesday, June 19, 2019
View: IRS Video Portal
The Spanish version is also available on the portal. The complete transcript is provided as closed captioning, and the PowerPoint presentation is posted for downloading under the “Slides PDF” link.