January, 2015
Go out to your car and write down the mileage, and include the date. This would be a good time to put together your mileage log for 2014 if you’re planning on deducting auto expenses, if you don’t have a “contemporaneous log”—recreate it from your calendar.
1099s and Update on Paying Foreign Persons for Services: 1099, 1042S or Nothing?
Please work on your 1099s, if you need to prepare them for your business. Let me know if you need help, I’m preparing a limited number of 1099s and I have some form stock in house, or you can order the forms from the IRS (don’t forget the Form 1096 “Transmittal” to use as a cover sheet). You can file them on-line, but this is not yet a free service.
I went to a class in December and was able to ask an IRS expert specifically about reporting requirements for paying Foreign Persons for Services.
We all know if we pay an individual for services who is a US person or US resident, with some exceptions, they should probably get a Form 1099. These people have an SSN, a nine-digit number issued by the Social Security Administration.
If you pay someone for work DONE in the US who is a “non resident”—which means they are not a US citizen nor a resident alien, they should complete Form W-8BEN and you’ll issue them a Form 1042S. The question about who is a “Resident Alien” for purposes of this test, is complicated. These people have to get an ITIN, a nine digit number issued by the IRS which begins with the number 9, and has a range of 70-88 in the fourth and fifth digit.
If you pay a foreign person, who never comes to the US, does not do the work in the US, and doesn’t plan to come to the US, they get nothing: no 1099 and no 1042S. Keep copies of cancelled checks and an invoice to prove payment, in the event of audit.
Thanks Carlos!
Household Payroll 2015 Handbook
I am currently writing a Handbook for Household Payroll Tax in California for 2015. If you have a “household worker” who is usually providing nanny or elder care services in your home, and they’re not employees of an outside agency, you may be putting yourself or your loved ones at risk if you’re not properly reporting them as employees. Look for this publication on Amazon, available electronically for download soon. We’re just finishing up revising all the examples for 2015 tax year.
Classes: Basic Payroll, Schedule C, and S Corporations May 2015
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. We don’t cover wages for apartment managers.
Basic Payroll Seminar runs 9 am 3 pm with an hour for lunch
The next seminars will be:
Oakland at the Oakland State Building, 1515 Clay Street, Room 9 (I take BART to 12th Street Oakland Station.)
Wednesday, February 4, 9:00 am – 3:00 pm
San Francisco at the SBA office 455 Market Street, 6th floor
(I take BART to Embarcadero or Montgomery Street)
Tuesday, May 5, 9:00 am – 3:00 pm
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.
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, March 25, 6:00 pm – 8:30 pm
You can register for this class at http://www.sbatrainings.eventbrite.com
S Corporations
By popular demand, I’ll be offering my S Corporation class again in Alameda sometime in May, 2015, probably the week of May 18–22. If you have a preference, feel free to email me to help me select a date you’d be able to attend. The class will be limited to fewer than 10 people, and is 4 hours of Federal CPE. In addition to a set agenda of materials about how to prepare the S Corporation return, we explore questions you have about specific returns you’re working on.
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.
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. You may also be interested in my “Choice of Entity” class – see below.
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.
Our northern California occasional in Alameda:
1516 Oak Street, Suite 109
Alameda CA 94501
Phone numbers are:
Phone (510) 332-0401
Fax (925) 478-2726
“You too can be enlightened about tax” — Tax Buddha