January, 2010

1099s and DE-542

Pay any contractors more than $600 in 2009? Any lawyers or non-corporations? Pay rent to a non-corporation? An LLC is not a corporation, so they’re not excluded from 1099 reporting requirements.

If you need assistance with filing your 2009 1099s, please contact us early, we tend to get scheduled up towards the end of the month of January, when the 1099s are due to contractors.

Unfortunately, you can’t download 1099 forms, they have to be “scannable” and there’s a $50 penalty for filing 1099s that are not scannable. If you just don’t file, and you get audited, the IRS might disallow the deduction, which is probably worse than the minor penalty alone.

Going to pay any contractors more than $600 in 2010? You may need to prepare EDD form DE-542 within 20 days of determining you will pay more than $600 in the calendar year, each year. Here’s a link to the form, it may be downloaded and faxed http://www.edd.ca.gov/pdf_pub_ctr/de542.pdf or, you can complete the form on-line at: http://www.edd.ca.gov/Payroll_Taxes/FAQ_-_Reporting_Independent_Contractors_Online.htm

I’m currently working on an article for publication about reporting (and possibly withholding) requirements for paying foreign people. I’m afraid the tax code is a bit of a mess on this.

Standard Mileage Rate for 2010

The IRS announced the new mileage rate for 2010 just after I sent out last month’s newsletter – I had a placeholder for the information, but didn’t actually get it in time! The rate for 2010 is $0.50/mile – lower than it was in 2009 (which makes sense, as we all know things are less expensive in 2010!).

The Eightfold Path to Pay Less Tax and Avoid an Audit

Eight basic things business owners want to know printed in booklet form. This is 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 the purchase is tax deductible!

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.

Classes – Intermediate S Corporation, Basic Payroll, Schedule C, and Household Employees

Intermediate S Corporation Class will be presented in Alameda to up to five participants. This is an intermediate class, so we won’t be discussing how to fill out the form. Rather, we’ll be looking at how to quickly solve the most common problems encountered with preparing an 1120S, and what to do now to reduce the likelihood of future problems. Class is limited to 5 participants, so you’ll be able to ask all your questions. I moved the time up by an hour because it was difficult to get to Alameda in morning traffic.

“This is the best class on S Corps I’ve ever been to, and I’ve been to a lot.”

There are three new dates:

This class will be held in the Law Office Conference Room, 1516 Oak Street, Suite 109 in Alameda CA. Fee to attend is $225, but reduced to $175 for NAEA/CSEA members. CPE credit of 4 hours available for Enrolled Agents who attend, no credit currently available for CTEC, but it’s a good class.

Send me an e-mail if you want to attend. Flyer is on the website at www.TaxBuddha.com/1120_S_Flyer_2010.pdf

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 Embarcadero) 9 am – 3 pm.
Wednesday January 27
Wednesday February 24
Wednesday April 28
Wednesday May 26
Wednesday June 23
Wednesday August 11
Wednesday September 22
Wednesday November 17
Wednesday December 15.

Basic Payroll in Oakland at Elihu M. Harris State Building,1515 Clay Street, Room 1, Second Floor, 9 am – 3 pm.
Thursday January 14
Thursday February 11
Thursday March 11
Thursday July 8
Thursday August 5
Thursday November 4

Register by going to http://www.edd.ca.gov/Payroll_Tax_Seminars/ and find your favorite location. We’re working on the 2010 schedule, and trying to figure out how I can present this in other states.

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

How to Prepare your Own Schedule C
Prepare your business taxes for ’09 and get ready for ‘10. 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.

This class will be presented for free in San Jose on Wednesday, February 3rd 10 am – 12:30 pm at the US Small Business Administration
100 E. Santa Clara St, San Jose CA
Wednesday Febuary 3
Wednesday May 5
Wednesday August 4
Wednesday November 3

Andy will be at the US Small Business Administration offices in San Francisco at 455 Market Street, 6th Floor on February 16th, 6-8:30 pm. This class will be free. To register, check out the SBA website www.SBAtraining.eventbrite.com, or just show up.

Household Employees class was very successful and I’m working on finding an additional venue to present this again in 2010.

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.

Phone and Fax Numbers

Our northern California physical office is shared commercial space in Alameda. Phone numbers are:
Phone (510) 522-2300
Fax (510) 522-2307
Our mailing address:
3527 Mt. Diablo Blvd #366, Lafayette CA 94549

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