January, 2009

• The Eightfold Path to Pay Less Tax and Avoid an Audit
• Mandatory CA Electronic Payment
• Classes – Tax Update 2009, Basic Payroll and Schedule C
• Prevent Fraud in your Business
• For Relaxation and Clear Thinking
• Phone and Fax Numbers

The Eightfold Path to Pay Less Tax and Avoid an Audit

Eight basic things all business owners need to be masters of is ready and printed in booklet form. You can order directly from us at Tax Buddha, or you can order from Amazon.com (search for Author Andrew S Rogers). Order copies for your friends who are in business! Order copies for your sales team! Order copies for independent contractors you care about! Here’s the link to Amazon:
http://www.amazon.com/Eightfold-Path-Less-Avoid-Audit/dp/0615233422/ref=sr_1_22?ie=UTF8&s=books&qid=1226611038&sr=1-22

The booklet also contains a sections on how returns are selected for audit, when to seek professional help, and how long to keep your tax records.

Andy is also available for speaking engagements on this topic.

Mandatory CA Electronic Payment

In 2009 if your individual (personal) CA tax liability is greater than $80,000, or if your estimated or extension payment exceeds $20,000, you’ll be required to pay electronically. If you are required and you don’t, there’s a 1% penalty for paying by paper check.

You can pay via EFW (Electronic Funds Withdrawal), on the internet or via credit card.

This is for CA tax only at this time.

If the FTB in CA suspects you may meet the threshold, they tried to send out courtesy letters to let you know. If you are required and you didn’t get the letter, you’re still required to pay electronically.

When we prepare your tax return, we can have the government withdraw the funds from your checking or savings account automatically (I’ve been told by the IRS I’m supposed to say ‘your bank releases the funds’ so you don’t freak out! It seems all the same to me, the money leaves your account either way.) We’ve never had a problem with an electronic payment.

Classes – Tax Update 2009, Basic Payroll and Schedule C

Tax Update 2009 for bookkeepers will be co-presented by Eva Konigsberg and Andy on Sunday 1/4/09 in Albany at 1604 Solano Avenue in the conference room of April McMahon as part of the Berkeley Bookkeepers Network meeting. Building is 2 blocks up the street from the Safeway store and on the same side of the street. It is a beige building with two pillars at the entrance and a large sign saying Cheasty and Cheasty. The meeting room is at the back of the building. This event is free and you don’t have to be a member to attend (but dues are $35/year so why not join!).

In conjunction with the IRS and EDD, Andy's going to be doing some Basic Payroll seminars coming up in the near future.

Basic Payroll: Seminar runs 9 am – 3 pm with an hour for lunch

• California payroll reporting requirements: forms DE-34, DE-6, DE-7, employer obligations, reporting, and payment requirements.
• Independent contractor reporting requirements, forms W-9, DE-542, 1099, and 1096, obligations, reporting for both California and the IRS.
• Federal payroll reporting requirements: Forms 940, 941, W-2, W-3, W-4, I-9, and alternative filing.
• Electronic filing and payment requirements and options.
• Practical Example with completed forms for sample company.

The next seminar will be
Basic Payroll in Oakland at Elihu M. Harris State Building,1515 Clay Street, Room 2, Second Floor, 9 am – 3 pm.
January 28th http://www.edd.ca.gov/Payroll_Tax_Seminars/Reserve_Space.asp?SemID=3728
February 26th http://www.edd.ca.gov/Payroll_Tax_Seminars/Reserve_Space.asp?SemID=3732

Basic Payroll in San Rafael is presented at 120 North Redwood Drive, 2nd floor, Redwood Room East Wing, Room E-212 9 am – 3 pm.
February 4th http://www.edd.ca.gov/Payroll_Tax_Seminars/Reserve_Space.asp?SemID=3729

Basic Payroll in San Francisco is presented at the SBA office 455 Market Street, 6th floor (I take BART to Montgomery Street) 9 am – 3 pm.
January 14th http://www.edd.ca.gov/Payroll_Tax_Seminars/Reserve_Space.asp?SemID=3725
February 18th http://www.edd.ca.gov/Payroll_Tax_Seminars/Reserve_Space.asp?SemID=3730

Basic Payroll in Irwindale (that’s in LA) is presented at WorkSource/LA Works Center 5200 Irwindale Ave., Ste. C Irwindale, CA 91706 9 am – 3 pm.
March 18th, link not yet available.

These seminars have proven to be very popular, plus they’re free.

How to Prepare your Own Schedule C
Prepare your business taxes for ’08 and get ready for ‘09. Review what the IRS wants to know from you and how to report it on the Schedule C for your business. This is a class for business owners who need a basic understanding of their 1040 Schedule C tax forms. We’ll also talk about what to do with the numbers once you have them. We can’t guarantee you won’t get audited, but this class will make it less likely.

Andy will be at the US Small Business Administration offices in San Francisco at 455 Market Street, 6th Floor February 25, 6-8:30 pm. This class will be free. To register: http://www.acteva.com/booking.cfm?bevaID=172942

Andy will also be at the US Small Business Administration San Jose Entrepreneur Center at 84 W. Santa Clara St, Suite 100 in San Jose on January 20, 10 am – 12:30, and the class will still be free. http://www.acteva.com/booking.cfm?bevaID=173622 to register

Prevent Fraud in your Business

Don’t let someone sign your name, use your credit card or represent themselves as you to your bank or credit card company—in the event of fraud, it muddies the water between what you allowed them to do and what they did. If you authorize someone sign your name some of the time, how can a jury decide when you didn’t authorize it?

I’m afraid you can’t abdicate bookkeeping responsibility entirely to one person. There’s a rule I think of as “separation of church and state” – have one person reconcile and another person write checks.

Open your bank and credit card statements and review the checks and statements. If someone is stealing from you, better to catch it sooner. I don’t mean review the stack of checks the bookkeeper lays out for you after reconciling, I mean open the envelope yourself. If you’re a bookkeeper, make the owner open the statements and initial them, if you can.

Reconcile your accounts monthly. The one time I personally discovered fraud, an exiting employee had written themselves a few ‘extra’ checks, presumably because the soon-to-be-ex-employee felt the employer owed them. As I recall, this ultimately cost the employer $50, which was much better than the thousand or so spread across several checks, also presumably to make it look like a few ‘normal’ checks.

Back up your data off site in a secure way. If you’re using CD’s use the read-only variety. The last action of a fraudster before leaving is to delete all the QuickBooks files and backups, and/or change all the passwords. It may be possible to recover deleted files from a hard drive, but it’s very expensive.

For relaxation and Clear Thinking: On The Spot

To carry you through the summer, we recommend meditation and that you check out On The Spot Massage at http://www.onthespotmassage.com/corporate.html to help you relax. A relaxed mind is a clear thinking mind. Makes an excellent gift for your tax preparer or other important person in your life.

Phone and Fax Numbers

Our northern California office is shared commercial space in Alameda (the Berkeley mailing address is still good for deliveries, it is a PMB). Phone numbers are:
Phone (510) 522-2300
Fax (510) 522-2307