April, 2009

Extensions Due by Wednesday April 15th

If you haven’t sent off your personal return for ‘08, you should consider filing an extension. If you finish your return on time, you can submit it, even though you filed an extension

You do need to make a ‘reasonable’ estimate of what you’ll owe. The extension is an extension to file, not an extension to pay. If we make a last second guess based on incomplete information, the IRS may invalidate the extension and assess penalties and interest for filing late. If you don’t have all the money to pay, you should still report what you expect you’ll owe.

Here’s the link if you want to fill it out yourself and mail it in: http://www.irs.gov/pub/irs-pdf/f4868.pdf

PKZip/PDF, Brother/HP – Office Upgrades

After struggling in the beginning of the tax season with the PKZip encryption software, and some consultation with Angeli Maney, E.A., I’ve moved over to Adobe Acrobat’s software to encrypt PDF’s. It seems to be working much better, no client has told me they can’t get into their encrypted files. And I believe them, since I’m getting my faxed e-file authorizations.

Speaking of which, I was using a Brother all-in-one printer/scanner/fax machine, which seemed to have unending drum and memory problems. Faxes were hard to read and only one page could be scanned at a go. At the end, it would no longer print. The old Brother machine has gone to GreenLight Recycling www.greenlight-recycling.com who claims to provide free business pickup (I met them at a church event, so I delivered to them). A few other dead or comatose machines in storage are now also gone. I hope no one wanted that 400 MHz computer!

I’m currently using a combination of HP laserjet and inkjet printers, and although my scanning is slow, I can do a stack of pages while working on something else, reducing/eliminating my need to make paper copies—better for trees, better for storage space.

I also now have a window in my shared commercial space in Alameda. I have a fine view of the back of Der Wienerschnitzel on Park Street.

The Eightfold Path to Pay Less Tax and Avoid an Audit

Eight basic things all business owners need to be masters of is printed in booklet form. Think of this as ten years of working with the IRS Tax Code distilled down into about 32 pages.

Just another way we’re trying to simplify your life and save you money. And the purchase is tax deductible!

You can order directly from us at Tax Buddha, or you can order from Amazon.com

Here’s the link to Amazon:

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.

1% Sales Tax Rate Hike April 1

As part of the Economic Hindrance Package, California has a “temporary” 1% sales tax rate increase starting April 1, 2009, set to expire July 1, 2011 (or possibly 2012 depending on pending legislation). Don’t forget to charge more, because you’re going to have to pay this extra tax.

For a list of sales tax rates sorted by city name in excel format, try http://www.boe.ca.gov/sutax/files/city_rates.xls. The city I’m currently sitting in, Alameda, has a rate of 9.750% as of today. You can also search for the city on line at http://www.boe.ca.gov/cgi-bin/rates.cgi.

Just to remind you, if you purchase things from outside the state and bring them here, generally you’re supposed to report and pay your own sales tax on your California return. They call it “Use Tax” This does not apply to things you register with the DMV – you pay the DMV directly instead of having to add it to your Form 540, line 49. Buying stuff on-line is less of a deal than it looks like it might be.

Also, if you personally hand carry an item into Calfornia from a foreign country, the first $800 of tangible personal property is exempt. Hooray. This exemption does not apply to things mailed or shipped from a foreign country. And this is every 30 days, so you can’t stand just over the edge of the territorial limit and toss stuff onto a barge.

Classes – Basic Payroll and Schedule C

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

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

The next seminar will be
Basic Payroll in San Francisco at the SBA office 455 Market Street, 6th floor (I take BART to Montgomery Street) 9 am – 3 pm.
April 29th and again on May 27th and yet again on June 17th.

Basic Payroll in Oakland at Elihu M. Harris State Building,1515 Clay Street, Room 2, Second Floor, 9 am – 3 pm.
May 7th and again June 3rd.

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.
July 29th

Register by going to http://www.edd.ca.gov/Payroll_Tax_Seminars/ and find your favorite location

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 May 11, 6-8:30 pm. This class will be free. To register check out the SBA website, or just show up.

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 June 11, 10 am – 12:30, and the class will still be free. http://www.acteva.com/booking.cfm?bevaID=173622to register

I went to a class on QuickBooks given by Kim Woodrum. If you’re in the market for QuickBooks training in a classroom setting, I recommend her. She teaches a two day QuickBooks seminar and travels a great deal. Her website is http://www.manibusinessservices.com/

For Relaxation and Clear Thinking: On The Spot

To carry you through the stressful tax season, 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. We have some discount cards for $5 off at the Alameda Natural Grocery location on Park Street, open daily 11 am – 7 pm. Ask us for one!

Phone and Fax Numbers

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

“The hardest thing in the world to understand is the income tax.” — Albert Einstein, physicist