January, 2012

“Critical Notice” for 1099s

You may have received an email from Intuit about 1099s offering to sell you their new tool—that works with QuickBooks 2012 (billed separately!) that will allow you to exclude amounts paid to people who would otherwise receive a 1099 from you, except that they changed the rules about what you have to report. The IRS has a new Form 1099-K that reports merchant card processing of payments. If you PAID a vendor with a credit card (AmEx, Visa, M/C, PayPal), you don’t need to include the payment on a 1099. You still need to issue 1099s for payments made in other ways.

This might mean you issue fewer 1099s.

More likely, you’ll just have more work to do. Now you “get to” review the payments and you can exclude payments made via credit card, as the IRS will get the info reported to them via the credit card merchants.

Start keeping track of HOW you pay your vendors. If you never use credit cards, this doesn’t affect you. If you ONLY use credit cards, you will probably have fewer 1099s to issue. Most companies use a blend of both, so you’ll have to slice out the non-reportable transactions.

If you need help with this, let us know.

Just so you’re aware: the IRS is now asking directly if you made any payments that require a 1099. I personally think this is a way to charge a higher penalty for not doing 1099s because you were “made aware” that you should, and you are now actively saying you did (or will) issue the 1099s, so you’re extra bad if you don’t actually issue the 1099s.

For the time being, the rules of who is excluded from receiving the 1099s hasn’t changed. The 1099s are issued in a business context; your personal expenses are not reportable on 1099s. Also, corporations are excluded from having to get 1099s (LLC’s are NOT corporations, they’re partnerships and should receive 1099s). There is an exception to the exception: lawyers should receive 1099s even if they are corporations. Certain medical payments are also required to be listed on 1099s, even if the recipients are corporations.

e-Filing Starts January 17th and is required

I’ve already received my first few sets of tax information for the 2011 tax filing and done the data entry. We’re still waiting for my software provider to code the most recent California changes into the program, but we can’t e-file until January 17th at the earliest anyway, per the IRS. They’re still coding their computers too.

Sometimes it takes a couple of days for the IRS to get their systems working (not always!).

Since I will prepare more than 100 returns for the 2011 tax year, I’m required to e-file by the IRS, and if I don’t, I’ve got to explain why for each return on a Form 8948 to include with each return I paper file. Amended returns will still be paper filed (for now).

If you have a fiscal year company, your deadlines will be different from the calendar year deadlines.

Little Box of Inc: Incorporations Made Easy published on Kindle

The book with tips about how the S Corporation works is now published to Amazon’s Kindle, updated with additional information about S Corporations, and can be found by searching for Andrew S Rogers as author, and click on “Kindle.” Here’s the blurb:

Considering incorporating as an S Corporation? This booklet will help you understand how the S Corporation works, what you need to do to become incorporated and what you need to do once you have a corporation to stay out of trouble. The structure and the requirements are reviewed, as well as helpful tips to use your corporation to reduce your tax liability and retain your status as an S Corporation. I’ve worked with S Corporations for many years, and as a tax preparer, I can choose the kind of entity I have for my business: I choose the S Corporation myself, and I’ve convinced many of my fellow tax preparers to incorporate as well. I’ve divided the information into clear, easy-to-understand topics, and cross-referenced sections when it might be helpful.

After you’ve read this material, you can view on-line videos via YouTube.com for free to access more advanced information about S Corporations.


Tax Buddha Messenger Bags

Want to be the first person in your tax bracket to sport the fabulous Tax Buddha Messenger Bag? I’ve now got a “shop” on Café Press at www.cafepress.com/TaxBuddha in case you’d like to order your own Tax Buddha logo items. The messenger bag came out particularly well, not quite “saffron,” but easy to find in an airport.

The Eightfold Path to Pay Less Tax and Avoid an Audit

Eight basic things business owners want to know printed in a booklet in “executive summary” 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 sections on how returns are selected for audit, when to seek professional help, and how long to keep your tax records.

EBAEA—Audit and Representation Group

Our meeting is scheduled for Wednesday, January 11th. We’ll take a case, review it, and discuss other audit and representation issues. We’ll meet in Lafayette at Millie’s Café at 9:30 am for two hours at 1018 Oak Hill Road, A, just off highway 24. Go to the link for the current bulletin for more information http://www.ebaea.org/Bulletin/current.pdf. We’re still discovering if we can give CPE to Enrolled Agents who attend for two hours.

Classes—New online catalog, Basic Payroll, Tax Update and Household Employees, Schedule C and Entity Choices Workshop, plus QuickBooks

Here’s a link to the seminars page on my website: www.taxbuddha.com/seminars.html

Basic Payroll
In conjunction with the IRS and EDD, I’m 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:

San Francisco at the SBA office 455 Market Street, 6th floor (I take BART to Embarcadero or Montgomery Street)
10 am ­ 4 pm, January 10.

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 for business owners and bookkeepers, plus they’re free.

Tax Update
I will present an hour long tax update for the East Bay Association of Enrolled Agents at the Holiday Inn in Dublin at the monthly meeting on January 18th. For more information, go to https://www.123signup.com/calendar?Org=ebaea

Household Employees
This is an update class for both employers and the tax practitioners who help them. This is scheduled for January 21, 2012 as a webinar. The cost to attend this class will be $75. For more info, please email me at Andy@TaxBuddha.com. I will then attempt to post this class for viewing at your convenience at a later time/date.

How to Prepare your Own Schedule C
Get ready for next year and filing your own Schedule C for last year. Review what the IRS wants to know from you and how to report it 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.

I will be at the Women’s Initiative for Self Employment, 519 17th Street, Suite 240 Oakland near 19th Street BART station.For more information, contact: cgonzalez@womensinitiative.org 415-308-8652
Tuesday March 13, 4:00 pm ­ 6:30 pm.

Entity Choice Workshop
March 21 in Livermore, 1-3 pm, details to follow.

If you’re in the market for QuickBooks training in a classroom setting, I recommend Mani Business Services. This is a two-day QuickBooks seminar offered in various places around the country. The website is http://www.manibusinessservices.com/

Phone and Fax Numbers

Our northern California physical office is shared commercial space in Alameda, but we’ve been meeting people at Starbucks on Mt. Diablo Blvd in Lafayette near the mailing address.
Phone numbers are:
Phone (510) 332-0401
Fax (925) 478-2726
Our mailing address:
3527 Mt. Diablo Blvd #366
Lafayette CA 94549

“You too can be enlightened about tax” — Tax Buddha