July, 2009

• COBRA and the Viper
• The Eightfold Path to Pay Less Tax and Avoid an Audit
• Classes – Basic Payroll and Schedule C, plus QuickBooks
• For Relaxation and Clear Thinking
• Phone and Fax Numbers

COBRA and the Viper

You probably need to offer continuing Health Insurance to your terminated employees.

Part of the Recovery Act of 2009 to get the economy going involves a change to the rules about COBRA. Workers who have lost their jobs may qualify for a 65% subsidy from the IRS on health insurance premiums for themselves and their families for up to 9 months. COBRA can last 18-36 months, but the subsidy lasts only 9 months. The ex-employees have to pay 35% of the premium to the employer to stay on the health insurance plan, if they were participating when they were terminated.

People who voluntarily quit are not eligible.

Employees who were terminated “involuntarily” between September 1, 2008 and December 31, 2009 are eligible. The subsidy phases out for singe employees between $125,000 and $145,000 AGI ($250,000 and $290,000 for MFJ). AGI above the phase out is not eligible.

Covered plans include Medical Dental and Vision, but not things like FSA’s.

COBRA stands for Consolidated Omnibus Budget Reconciliation Act (although I call it the “Continuation Of Benefits? Really awesome!”)

The Federal standards are if you have more than 20 employees, but the Very Important Plan for Employee Retention (I just made that up!), also (actually) known as “mini-COBRA” or “Cal-COBRA” in California and 37 other states say 2 or more employees. It doesn’t look like the “viper” is in Arizona or Washington state, but it is in New Mexico, Texas, Virginia and Vermont, just to cover some of the other states I prepare returns for. Check with your state to be sure.

That’s right, 2 employees and you need to provide continued coverage.

The way it works is you, the employer, pay the insurance premium in full each month, your employee reimburses you 35%, and then you take the balance off of your Quarterly Form 941 payment

Here’s a wacky thing or two: to cover administrative costs, an employer can ‘charge’ 102% of the premium federally, but 110% for CA. Federal is 18 months allowed COBRA, but CA is generally 36 months.

For more information http://www.dol.gov/ebsa/cobra.html

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 so it doesn’t take YOU ten years.

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:
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.

It’s not in the Amazon.com top ten, of which one is a diet book and five are from the Twilight series – my plan for my next book: Diet for Romantic Teenaged Vampires.

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

• 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 San Francisco at the SBA office 455 Market Street, 6th floor (I take BART to Montgomery Street) 9 am – 3 pm.
July 15th and September 30.

Basic Payroll in Oakland at Elihu M. Harris State Building,1515 Clay Street, Room 2, Second Floor, 9 am – 3 pm.
July 1st, August 5th and September 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.

Also for CPE credits (3 Federal and 2 CA) we’re doing the seminar in Hayward through the East Bay Association of Enrolled Agents at 30100 Mission for $25. Sign up at www.123signup.com/calendar?Org=ebaea. The fee covers the administrative cost and room rental, the presenters are not paid. Thursday August 27th 10 am – 4 pm

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

Andy will be participating in the “Train the Trainer” two-day seminars to train professionals to give the Basic Payroll seminar’s themselves (with an EDD co-presenter!). If you’re interested in exposing yourself to potential clients, and you don’t mind public speaking, sign up for the class. Andy will be in Oakland September 1-2, and San Jose August 18-19

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 August 6th, 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 September 24, 10 am – 12:30, and the class will still be free. http://www.acteva.com/booking.cfm?bevaID=173622 to register

Again, for CPE credits (3 Federal) we’ll be doing the seminar in Hayward through the East Bay Association of Enrolled Agents at 30100 Mission for $25. Sign up at www.123signup.com/calendar?Org=ebaea. The fee covers the administrative cost and room rental, the presenters are not paid.
Saturday September 19 10 am – 1 pm.

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

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
We have a new address:
3527 Mt. Diablo Blvd #366, Lafayette CA 94549

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