March, 2012

Credit for Small Employer Health Insurance Premiums

You may have received a letter from the CA EDD about an available credit for health insurance premiums paid.

Excluded from the credit are business owners, partners, and more than 2% shareholders, so most of us will not qualify for the credit.

When you do qualify, the credit is reported on Form 8941.

There is a three part eligibility test. First you have to have paid at least 50% of the premiums for health insurance coverage, and you have to pay uniformly (like 100% for everyone). Second, you have to have fewer than 25 “FTE” employees for the tax year, “FTE” is full-time equivalents. To calculate this, we take the hours of service divided by 2080 hours in a year, rounded down. Third, and this is the “killer” for most of my clients who offer health insurance, average annual wages for the year of less than $50,000 per FTE.

Health insurance does not include workers compensation insurance, or HSAs.

There is a reduction to the credit if your average is over $25k (but must still be under $50k), and there’s also an upper limit to the amount of coverage cost allowed in figuring the credit—in California the coverage limits are $4,790 for single and $11,493 for family coverage. Its $5,146 and $12,328 in New Mexico, and the lowest limits are $4,378 and $9,849 in Arkansas. Clearly people in Arkansas are healthier than they are in New Mexico and California!

See for more information.

“” or “”

‘Tis the Season to receive fake phishing emails from scammers.

My email spam catcher has received hundreds of “Your tax appeal is rejected,” “Rejection of your tax appeal,” “Termination of your accountant license,” or “Fraudulent tax return assistance accusations” from some combination of these email addresses.

First off—its irs.GOV and aicpa.ORG, not .COM

Second—I’m not a CPA, never was, don’t particularly want to be. I’m an Enrolled Agent, and I do have a federal license to prepare tax returns granted by the IRS (.gov), not a CPA. I’m ‘all qualified up’ having finished my continuing education requirements, and none of my tax appeals are ever rejected—at least not by email!

Third—The IRS DOES NOT EMAIL. They think it is an insecure method of communication. These are phishing scams—nefarious people trying to get me to disclose confidential personal information.

If you’re getting these too and you’d like to “turn the scammers in” do not “reply,” do not open any attachments, and do not click on any links. Forward the email as-is to phishing@irs.GOV then delete the email.

Payroll: Social Security at 4.2% for Employees for all of 2012

The reduction of “employee” social security tax from 6.2% down to 4.2% was with us for 2011, and they’d put it in place for the first two months of 2012—well, in late February, they made the reduction last all year—all of 2012…at least until further notice!

If you’re self-employed, or a partner or member in an LLC, your rate will “remain” at 13.3% for 2012, just like it was for 2011.

Try not to spend your 2% raise all in one place.

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 for free to access more advanced information about S Corporations.

Household Workers Payroll Tax 2012 published on Kindle

If you have someone providing child or elder care in your home in California and you’re paying them more than $750/quarter or $1,800/year, you need this book! Clear instructions with examples to help you calculate wages properly and stay out of trouble (even if you are not running for senate!). Don’t expose your parents or yourself to the risk of a worker injury or filing an unemployment claim, pay them right! Updated for 2012 and includes both Federal and California rules.

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 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 Here’s the link to Amazon: 

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 Audit and Rep meeting is scheduled for the second Wednesday each month, but is on hiatus in March and April, so expect the next meeting May 9th. Unless I receive a case, we won’t have CPE available. I’ll still go to breakfast, but we won’t have an official meeting (I have breakfast nearly every day!). At Audit and Rep, we’ll try to take a case and review it, and discuss other audit and representation issues. We 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 If we have a case and I can get the IRS authorization before the day, be sure to bring $5 and your PTIN number, and we’ll mail you a certificate for CPE.

The Speakers Development Group is on hiatus until after the tax season.

Classes—Official IRS Education Provider, New On Line Catalog, Basic Payroll, Tax Update and Household Employees, Schedule C and Entity Choice Workshop

Here’s a link to the seminars page on my website:

Here’s a new link to my On Line catalog of classes, not quite finished:

I’m an official education provider. You can find my name (Tax Buddha) listed at the IRS website: where you’ll see I’m qualified to provide federal tax update and federal tax classes for EA’s and RTRP’s. (I just knew I should have used the name AAAAA Tax Buddha!)

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, March 7 and again April 3.

Oakland at 1515 Clay Street, 2nd Floor, Room 11, in the Eliju Harris Building
9 am ­ 3 pm, March 7.

San Rafael at 120 North Redwood Dr, 2nd Floor Bay Room E-209, the EDD building
9 am ­ 3 pm, March 27.

Register by going to 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 have an IRS CPE approved class available on the web for Enrolled Agents and RTRPs who need an hour of credit. This was first presented for the East Bay Association of Enrolled Agents as a January 2012 dinner meeting topic. See my online catalog at or email me at

Household Employees
This is an update class for both employers and the tax practitioners who help them. This is now online. For more info, please email me at or see the Kindle book at

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 US SBA office in San Francisco at 455 Market Street, 6th Floor.
Tuesday, April 10, and August 14, 6:00 pm – 8:30 pm.

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: 415-308-8652
Tuesday, March 13, 4:00 pm – 6:30 pm.

Entity Choice Workshop
I will be at iGate (be sure to bring you iPhone—just kidding!), 1052 S Livermore Ave, Livermore CA 94550 for the Alameda County SBDC
Wednesday, March 21, 1:00 pm – 3:00 pm.

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