April, 2010

Short Vacation-Office Closed April 5-9

“What? Are you kidding?”

Nope. It is Max’s “spring break” for a week. True, he’s only two and in daycare, but, time to get used to it, plus I like spending time with him.

As a concession, I’ll be reviewing e-mails on Tuesday and Thursday morning, April 6 and 8. But don’t expect a tax return to be completed this week (unless there are no e-mails, in which case I’ll work on returns…unlikely!).

As I say in my seminars, I do “have” a phone, but e-mail is much better as a means of communication.

We don’t have any big plans to go out of town, although Disneyland was mentioned as a possibility, we’ll be heading down to southern California later in April for a class reunion. We’ll probably go to the zoo, and we may go look at some trains.

I was inspired by Duncan Sandiland to spread my workflow out this year, rather than burning midnight oil, so I can focus more on your return to get the best result for you. I work better if I’m properly rested. I’m trying to balance this with a fast turnaround time. So you can call Duncan and complain—except he’ll probably be on vacation too.

How to file your own Extension

Seeing as how I’ll be on vacation, you might like to know how to do this if you DO panic.

If you don’t file an extension, you may receive a Penalty for Late Filing. For individuals the extension form is 4868 and here’s the link: www.irs.gov/pub/irs-pdf/f4868.pdf

In California, generally the federal extension suffices—you don’t need to file a state extension, although if you owe California money, you pay WITH the extension. The California extension form is a payment voucher numbered 3519 and here’s the link: www.ftb.ca.gov/forms/2009/09_3519.pdf
Some states DO require a separate extension from the federal extension, in addition to the federal extension, like Washington DC.

If you want me to put you on extension, I’ll need an idea about your income for last year, and I’ll make an estimate of what you’ll owe. I will also send you an invoice for the minimum fee for your return. If you owe a payment, I will send you a payment coupon for the state or give you an amount to pay to the IRS.

Employer Match for New Employees SS Waived and a $1,000 Credit

If you hire unemployed workers after Feb 3, 2010 and before Jan 1, 2011, you may qualify to NOT PAY the employer match of 6.2% of Social Security taxes. The employee sill needs to have their 6.2% withheld. You’ll still owe the Medicare match of 1.45%

For each worker you keep for at least a year, your business may also claim a tax credit up to $1,000 per worker on your 2011 tax return.

This is NEW, and there are some restrictions on it. You can’t fire someone and replace them with a ‘qualified’ worker and get the credit, but if someone leaves voluntarily and is replaced by a ‘qualified’ worker, it is OK.

Qualified Workers have to have been previously unemployed for 60 days before beginning work, or worked fewer than 40 hours for someone else during the 60 day period. Did I mention this is NEW? The IRS is still developing a form to collect the required 60 day statement.

The credit will be reported/claimed on the second quarter Form 941.

I’ll send details as they become available—they’re still working this out.

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: 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.

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 is one new date:
Monday, May 10th, 2010 from 10 am to 2 pm ­ 1 seat available.

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 seminars 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, April 28th and May 26th and June 23rd.

Basic Payroll in Oakland at Elihu M. Harris State Building,1515 Clay Street, Room 1, Second Floor, 9 am ­ 3 pm, July 8th.

Basic Payroll in San Rafael will be Thursday May 20th

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 Wednesday, May 5th 10 am ­ 12:30 pm at the SBA Entrepreneur Center, downtown, 84 W Santa Clara St, Suite 100, San Jose, but the address may change. Still in San Jose, but the SBA may move.

Andy will be at the US Small Business Administration offices in San Francisco at 455 Market Street, 6th Floor Tuesday May 4th, 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. It turns out the EDD is giving their own version of this information, but I’m not expecting it to include the federal side…we’ll see!

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