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A Reno CPA Is A Translator

[youtube]http://www.youtube.com/watch?v=kN07UjFU_2g[/youtube]

When you think Certified Public Accountant, what comes to mind? Numbers? Taxes? Financial advising? How about translator? As a Reno CPA, I am often asked what exactly a CPA does. After thinking about it, I have come to the conclusion that we are translators.

We take a language that is foreign to you, but that we, CPAs, are fluent in and explain it to our clients in plain English. That’s right; we look at all the numbers, tax codes, and statements. Break down exactly what they are saying, and then explain it to you in an easy to understand way. I call this financial translation.

How can you, as an individual or a business owner, make financial decisions if you do not fully understand your current financial situation? The answer is you can’t. You need to consult a Reno CPA who can help you truly understand your financial situation and make an educated decision.

Taxes and the IRS are two categories that without proper translation can break your bank account. When it comes time to file your taxes, it is important that you understand all the aspects of them. You need to be able to understand what the tax form is asking for, and how to get the most advantages.

In addition, when dealing with the IRS it can and will seem like they are talking to you in another language. They may ask for certain forms, or information and you will not understand them. Sometimes this is just miscommunication. Other times, it is the IRS’s way of trying to take advantage of your lack of understanding.

In both of these situations, you will benefit from working with a Reno CPA. We will help you understand the tax forms and the IRS, and make sure you take the appropriate steps. Why would you want to miss something or be taken advantage of?

A Reno CPA can also help translate your goals and ideas into functional plans and projections. Furthermore, we can also help you express your ideas to business partners and/or employees. A Reno CPA will help you understand and express your financial situation.

Reno’s Best CPA,

Tim Nelson

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A CPA in Reno, Nevada Explains The Estate Tax

If you have seen or read the news lately, you probably are wondering what the big deal is with the Estate Tax or you may be wondering what the Estate tax is. As a CPA in Reno, Nevada, I want to take a moment to talk about the Estate Tax. What is it? Why it is making the news?

On the IRS website, the Estate Tax is defined as “a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death. The fair market value of these items is used. The total of all of these items is your ‘Gross Estate.’ The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.” My job as a CPA in Reno, Nevada is to help you calculate all of these things.

This may seem like a lot of work, but do not start worrying yet. According to the IRS, “most relatively simple estates do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 – 2005; $2,000,000 in 2006 – 2008; and $3,500,000 effective for decedents dying on or after January 1, 2009.”

The reason why the Estate Tax is in the news is that this year, is because the tax expired. I had one client come in and ask what he was supposed to do because his father passed away on January 1st at 8:00 A.M. I said, if he would have died 9 hours earlier, we would be done. I would have told him exactly what he would have to do. At that point, all I could tell him was that there is no state tax and that we did not have to do anything. Unfortunately, the proposal in Congress right now is to enact a retroactive estate tax at the beginning of the year.

The proposal for a retroactive tax is what is controversial. As a CPA in Reno, Nevada, all I can do is wait and see what Congress decides and then take the appropriate actions from there.

Visit the IRS’s website for more information about the estate tax, instructions for dealing with this tax and frequently asked questions.

Reno’s Best CPA,

Tim Nelson

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CPA In Reno Explains Debt Forgiveness

[youtube]http://www.youtube.com/watch?v=Yu2phuYYDkc[/youtube]

One topic of discussion I have encountered recently is debt forgiveness. Is debt forgiveness taxable, does it have to be included with my income? As a CPA in Reno, I wish I had a general answer, but it is a very complex topic.

The IRS Website states, “The tax impact of debt forgiveness or cancellation depends on your individual facts and circumstances. Generally, if you borrow money from a commercial lender and the lender later cancels or forgives the debt, you may have to include the canceled amount in income for tax purposes.”

When looking at debt forgiveness, you have to take into consideration mortgages, credit cards and many other types of forgiveness. As a CPA in Reno, the best advice I can give you is contact an accountant if you are in this situation. The topic is very complex, definitely unique to each individual case and must be handled by someone with experience.

You do not want to get in trouble with the IRS for not including forgiven debt on your tax return. In addition, if you do need to include information you may need the lender to take certain actions. The sooner you figure out what needs to be done, the sooner the process can be started. If you need a lender to take action, it is better to give them plenty of notification, that way you are sure that your return is complete.

The last thing you want is the IRS hounding you. Therefore, call Reno’s Best CPA today and get help with how to handle your forgiven debt. Taxes are a very complex topic, but when debt is involved they can become more complex. Make sure you are being proactive. Once the IRS finds a problem, they will try to get the most money out of you as possible.

Until Next Time,

Tim Nelson

Reno’s Best CPA

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Accountant in Reno Helps You Understand State Taxes

[youtube]http://www.youtube.com/watch?v=dWVNkNuEung[/youtube]

Understanding how state taxes apply to individuals and corporations can save you or your business a good deal of money. Of the 50 states, 45 of them have a tax on individuals or corporations. Each state has different regulations about how these taxes apply to residents and non-residents. To make sure that you are filing the proper tax forms you should contact an accountant in Reno.

Here in Nevada we do not have an individual or a corporate income tax. Knowing which states have these taxes is important if you want to relocate. As an individual or a business, you can change your economic situation by moving from a state that has these taxes to one that doesn’t, and vice versa. Moving is not the only reason to understand state taxes.

If you are business owner and decide it is time to expand, you need to understand taxes. The same goes for individuals who provide professional services in multiples states. You need to know that states have different rules regarding CITUS, which governs whether you are subject to state income tax in that particular state. The best way to make sure you are not forgetting to pay taxes in certain state is to call an accountant in Reno today.

As a general rule of thumb, if you are providing professional services within that state you are going to be subject to state taxes. If this is the case your will have to prepare a non-resident return. This additional requirement while complicate your tax preparation, but is something you need to be aware of.

Because of the variety of state income and corporate taxes and the possible affect on your tax situation, you need to be aware of them. If you have questions about how they apply to you or your business, talk to an accountant in Reno.

Reno’s Best CPA,

Tim Nelson

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CPA in Reno Explains Offer In Compromise

[youtube]http://www.youtube.com/watch?v=3RicBt4fmAE[/youtube]

As a CPA in Reno, I am often asked what an offer in compromise is and how it works. There is a lot of misunderstanding about what an offer in compromise is and I thought I would take a second to clear up some of the confusion. The best way I know of to explain an offer in compromise is that it is where you make a deal with the government to settle your tax obligations for less than what you actually owe.

Is This Always An Option?

No. Offers in compromise are not always an option. They are based on your ability to pay. The IRS does not like compromising, because they lose money. They will work with you if you have financial hardships and it is clear that there is no way that you can pay them the amount owed.

Can Be Useful With Medical Issues

Say for instance that you have had medical issues and have lost the ability to earn a living and therefor you owe a lot of money, but have no way to pay it back. The IRS will often wave the interest and other penalties. This is one example of a financial hardship. Anytime you are faced with a financial hardship, it is more likely that the IRS will be willing to work with you.

Can You Pay In 10 Years?

The IRS will base your ability to pay on a ten-year mark. They will have you put together a budget and prove to them that you cannot afford to pay them the amount they are asking for. If your income has dropped dramatically and it is going to level out at this new amount, then you can put together a paying schedule based on your new income.

Pets, Coffee and Other Habits

The IRS is really tough with an offer in compromise. Once they have your budget they will ask you about extra spending and may even tell you that you need to cut your extra expenses so that you can pay them back. It sounds harsh, but I have had an IRS collection officer say that my client cannot have pets or they need to stop their daily coffee runs. If they find extra expenses, they will be less likely to compromise.

Every Case Is Unique and There Are Exceptions

With all the above said, every case is unique. Sometimes there are misunderstandings about your tax situation and by exploring these, your CPA in Reno may be able to prove that you do not owe as much as the IRS is asking for. If you can prove there is a mistake then they will work with you to figure out how much you actually owe.

If you are thinking that you may be able to work out an offer in compromise then you need to talk to an experienced CPA in Reno today.

Reno’s Best CPA,

Tim Nelson