May, 2009

Where’s my Refund?

If you’re expecting a refund and it hasn’t arrived yet, you can check the IRS website You’ll need your SSN, filing status and the exact amount of the refund expected

It takes up to three weeks to get a refund if you e-file, six weeks if you paper file.

Don’t bother checking before7 days after e-filing, or 4-6 weeks if you filed on paper, they won’t have processed your return yet and the website will have no information for you.

For CA Franchise Tax Board, the web address is and they’ll want some address info, your SSN and refund amount expected.

If you GET an e-mail that says they have a ‘refund’ for you, but they just need you to verify a couple of things, or worse a phone call, it’s a scam. Don’t fall for it. The IRS doesn’t e-mail you to verify your information.

The newest scam is “unclaimed” economic stimulus package payment waiting for you. Something is waiting for you…but it isn’t money.

Health Insurance for S Corporations

As an S Corporation owner-operator, you may qualify to deduct your health insurance premium “off the front” of your personal 1040 as “Self-Employed Health Insurance” deduction. That’s even better than being able to deduct it from Schedule A as a medical deduction.

Does your S Corporation pay your health insurance?

If you own more than 2% of an S Corporation and you’re drawing wage as an officer of the corporation, your health insurance should go on your W-2. As an officer, you are an employee and should be on payroll per statute (i.e. written law on the books).

Here’s the crazy circle that winds up with the same deduction if you were a sole-proprietor filing Schedule C: The corporation 1.) reduces its income by the benefit but 2.) increases the W-2 reported to the shareholder-employee who 3.) decreases their taxable income by the benefit amount.

If this will appear at year end on your W-2, it should also go on your quarterly payroll tax filings.

Health insurance is “wage income” but it is not subject to Social Security and Medicare tax, so it isn’t part of the wage base for those taxes on Form 941. If you’ve filed your first quarter 941 and DE-6 without including your health insurance, you should amend both forms. This does not change the amount of tax due, so there shouldn’t be a penalty. You want your four quarters to match up to the annual filings, so now is the time to correct first quarter and start reporting correctly.

Non-shareholder employees (<2% owners) are treated ‘normally:’ the health insurance is a non-taxable benefit to the employee and is a deduction to the corporation.

There are some limitations on deductibility for self employed health insurance. For example if you have no income, you can’t take the deduction, but if that’s the case, what do you care, you’re not paying tax anyway. Make sure your wage is reasonable.

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

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.

Classes – Basic Payroll and Schedule C

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

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.
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 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. We’ll do the same class at the same place and time on August 6th.

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. 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

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 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