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Business Owners, Pet Deductions Are Limited But Possible

Business owners, you may be asking yourself if I am being serious. Can you really deduct your pet’s expenses? In most cases, you cannot deduct pet food and vet bills. However, I have had a couple of clients who have successfully deducted their pet’s expenses. If this is something you want to do, you should talk to an accountant in Reno, Nevada who has ample experience in tax preparation.

Let me start out by saying that this is something that we come across all the time, but rarely will fly with the IRS. Let me give you a couple examples of clients who deducted their pets and why they were able to do so.

The first example is a tile manufacturer. This client had a couple of German Shepherds who stayed in the shop all the time. My client deducted their food, water and vet bills. This client was actually audited and the deductions were upheld. The auditor let the deductions stand because the dogs were considered security for the evening.

Another case of a client who successfully deducted their pet expenses was a farmer/rancher. This client has a number of cats, and all of the expenses for the cats were deducted. The ranching operation was audited, but the auditor upheld the deductions because the cats keep the mice down in the barns.

Now let me give you an example of a case were pet deductions are not justified. We had one client who ran a gym. They have a couple of dogs who are always running around the gym and greeting customers. They argued that the dogs were used as advertising because all the clients would talk about them.

The rule for whether you can deduct something as a business expense is if it is ordinary, necessary and reasonable. In the case of the gym, it is not necessary or ordinary to be able to deduct pet expenses. If you think you may be able to deduct your pet related experiences, you should contact an accountant in Reno, Nevada and have them help you with your tax preparation.

Reno’s Best CPA,

Tim Nelson

Business Owners, Pet Deductions Are Limited But Possible2019-03-28T15:00:00-07:00

Accountant in Reno Provides Holiday Shopping Tips

This may be a couple weeks too late, but it is still important. During the holiday season or for any major celebration, it is common to pull out your trusted credit card and get to shopping. The problem comes at the end of the month or the beginning of next month when you get your credit card statement. As an accountant in Reno, I wanted to take a second to discuss holiday shopping.

Although you may feel compelled to buy everything on someone’s shopping list, you and your family could try some great alternatives this holiday season.

Set a Per Person Limit

Whether you are buying for mom, dad, your significant other or a friend, set a shopping limit. Talk with the person that you want to buy a gift for and come to an agreement on a shopping limit. This is a great strategy for a couple of reasons. First, it allows you to budget your holiday spending and, as an accountant in Reno, I am a fan of budgeting. Second, it forces you to shop. If you come to a $25 arrangement with somebody, what are you going to do? You are going to go and find the best gift or gifts that you can for that price. This means that you are going to shop smarter.

Draw Names

Another idea is to draw names. This idea is more applicable to families, but can work with a group of friends. Simply gather the family around, place each person’s name in the hat, and then draw. Whomever you draw is the person you will shop for. Having to shop for one family member means that you can spend more time on that person and afford to buy them something nicer than you would have if you had to shop for everybody.

Check Three Stores

Once you have your shopping list for each person you should go to three stores before you buy the item. Although you may think you have found the best deal, you never know what the next store will have.

Wait 24-48 Hours

Once you have found the item you want to buy someone, especially if it is a more expensive gift, you should wait 24 – 48 hours before purchasing it. With that said, make sure that the special will last that long.

My goal, as an accountant in Reno, is to help you save money and manage your finances. These are just a couple of tips to help you get through the holiday season.

Accountant in Reno Provides Holiday Shopping Tips2019-03-28T15:01:01-07:00

CPA In Nevada Versus Attorney, Who Do You Need?

As a CPA in Nevada, I understand that there can be confusion about whether you need a lawyer or a CPA to deal with the IRS. The truth is it depends on the experience level of the certified public accountant. Let me explain the basic process, and when an attorney may be needed.

It all starts with the IRS finding something wrong with your taxes. For example, I have a client who is being audited for 2007. The reason he is being audited is that a revenue agent came across his taxes and noticed that every deduction that he took for 2007 was the exact same dollar amount that he took in 2006. This was a red flag because the revenue agent knew it was impossible that he had spent exactly the same amount on mortgage interests and property taxes.

Once the IRS has flagged you as having a problem with your taxes, there are two main course of action. The IRS will bring it to your attention and they will offer you an assessment. This value will be what they think is the amount you actually owe them. If you decide to pay this amount then you are done. However, if you do not think this is right then the process begins.

At this point, you need to hire a certified public accountant to help you fight the IRS. An experienced CPA in Nevada will understand all of the tax laws and do everything they can to come to an agreement with the IRS. However, if your case moves to tax court you should hire an attorney.

An attorney will have a better understanding on when to push and when to pull back in court. They are more familiar with the court process and are more likely to reach an agreement. With that said, an experienced CPA can take you all the way through the battle. If the court case is focused solely on tax opinions and tax positions, than a certified public accountant should be able to represent you.

If an attorney is needed, it is important to remember that your CPA will be working for you the whole time. Just remember that your CPA will know when and if you need an attorney. When in doubt do not be afraid to ask questions and ask your certified public accountant in Nevada to explain the process to you.

Reno’s Best CPA,

Tim Nelson

CPA In Nevada Versus Attorney, Who Do You Need?2016-09-22T22:00:40-07:00

Certified Public Accountant In Reno Discusses New Year’s Resolutions

At the end of one year and the beginning of the next, many individuals and businesses set New Year’s resolutions. Some of these are to live healthier, others are to spend more time with the family, but many of them are about getting finances in order.

As a certified public accountant in Reno, I think it is great to have finances on your list, but there are things you need to consider.

Be Reasonable

The first piece of advice that I have is to be reasonable. Do not set a goal that you know you will never obtain. You need to have thought about what it will take to reach your financial goal, and make sure that it is something you can do. If you realize that your resolution may be a stretch, then it is a good idea to scale back. It will be better for you to have a goal that you know you can reach.

Write It Down

Do not just spew your goal out at the family’s or office’s New Year’s Party, write it down. You need to have your goal in writing. There is a different level of commitment when you write your resolution down. This will allow you to keep your resolution in front of you, whether you post it in the car or on your bathroom mirror.

Make a Plan

Now that you have a reasonable resolution written down, you cannot just forget it. One way to make it easier to reach your resolution is to create a “to do list” or a “map” on how to get there. If your resolution is to have a certain amount in savings or to pay off a part of your debt by the end of the year, than you need to make a plan of actions on how you can reach those goals. As a certified public accountant in Reno, I think planning is an essential step.

Work Together

My last piece of advice is to share your resolution with someone and then provide support for each other. Find a family member or friend that you trust and let them know what your resolution is. In turn, have them share theirs with you. This provides some support when you start drifting away from your resolution. Together you stand a better chance of reaching your resolutions than if you tried to do it on your own.

As a certified public accountant in Reno, I like to see New Year’s resolutions that are based on finances. Have a wonderful year and best of luck with your resolutions.

Reno’s Best CPA,

Tim Nelson

Certified Public Accountant In Reno Discusses New Year’s Resolutions2016-09-22T21:57:58-07:00

An Accountant In Reno Talks About Coupons

Since one of your New Year’s Resolutions might be about finances, I thought now was an appropriate time to talk about coupons. As an accountant in Reno, I think it is important to manage your finances each year. One of the best ways to save money and allow for more saving is to shop smarter. The easiest trick to shopping smarter is using coupons.

How and Why

Every Sunday the Reno Gazette-Journal is stuffed full of advertisements. Along with these advertisements are those valuable coupons that many people seem to be overlooking. Today’s society is all about speed and therefore, taking the time to look through coupons and change your shopping habits to match the stores with the cheapest products seems too time consuming. However, the time it takes to get the coupons together could save you 20 to 50 percent on your shopping bill.

They Make You Plan

Besides for the obvious financial benefits from using coupons, is the fact that is makes you plan. As an accountant in Reno, I always encourage people to learn to plan. If you can plan, then you will be able to take the necessary actions to get your finances in order. Sometimes you will come across coupons for things that need to be bought in bulk or some that require you to buy two or three of something. If a coupon has a stipulation then you need to plan that into your shopping list.

Don’t Get Caught

Although coupons can save you a lot of money and teach you to plan, you need to be careful. You mistake that some people make, is that they spend too much. Just because you are saving a lot on two items, does not mean you can buy more. If you truly want to save, you still need to exercise self-discipline when you get into the store. Stick to your list, use your coupons and then put the savings into your savings account.

If one of your New Year’s resolutions is to get your finances in order, then it is a good idea to contact an accountant in Reno today. They will be able to help you evaluate your current financial situation and to make plans for 2011.

Reno’s Best CPA,

Tim Nelson

An Accountant In Reno Talks About Coupons2016-09-22T21:56:01-07:00

Experienced CPA Talks About Claiming A Dependent

[youtube]http://www.youtube.com/watch?v=PwmDh49pgC0[/youtube]

When it comes time to prepare your tax return there are many things that you need to consider. One of the most common questions I encounter as a CPA is who is considered a dependent. Although you make think that the answer is simple, many things determine if somebody is truly a dependent.

Dependency of Children

When it comes to children the best way to determine if they are under 18, live at home and you supply more that 50 percent of their income. From 19 to 24 you can claim them as a dependent if they are living at home the majority of the time and you are still contributing the majority of their income.

The One Up And Down Rule

Although you make think that you can only claim your children, there are other members of the household that can be claimed. If a person is one up or one down from you in terms of relatives than you might be able to claim them. This includes children, stepchildren, adopted kids, parents and stepparents. The general rule is that if you are providing over 50 percent of their support than you can claim them. However, there really is not great benefit to claiming some of these people, because the savings may not outweigh their expenses.

Non-relatives

Claiming relatives is the most common way to claim someone as a dependent, but there are some cases where you may want to claim somebody who is not a relative. If this is the case, you need to contact a CPA. They will be able to help you determine if you can claim each individual in your household. There are a lot more restrictions if the individual is not related to you.

If you have any questions about dependency and taxes, then you need to contact an experienced CPA today.

Reno’s Best CPA,

Tim Nelson

Experienced CPA Talks About Claiming A Dependent2016-09-22T21:54:13-07:00

What is the Difference Between A CPA and a Financial Advisor

As a certified public accountant in Reno, I am often asked what the difference is between a CPA and a financial advisor. Because of the frequency of this question, I thought I would take a second to discuss the similarities and differences.

Stockbroker versus Financial Advisor

First, I want to talk about the difference between a stockbroker and a financial advisor because people often think they are one in the same. A stockbroker buys and sells things (stocks, bonds, mutual funds). On the other hand, a financial advisor will do trading, but also look at other ways to invest.

What is a Financial Advisor?

Along with trading, a financial advisor will look at estate planning. They will also have their clients look into gold and foreign currencies. They have a short-term and long-term view on their clients’ money and want to help them prepare for retirement.

How is a CPA different?

A certified public account is better known for handling taxes. Along with taxes, they are known for dealing with audits whether they audit a business or represent a business in an IRS audit. Some CPA’s are trained and qualified in offering business advice on where to cut costs and how to turn your business around. With that said, it is important to remember that this is not a standard among CPAs, you need to make sure you ask your potential CPA about their background before taking too much advice from them.

Can They Be the Same?

The part that confuses people is that a good and experienced CPA can overlap with a financial advisor and vice versa. The best way to remember the difference is to think about the real numbers and current state of things when thinking about a CPA and the long-term “if” and “then” ideas when thinking about a financial advisor. If you are not sure if a CPA in Reno can suit your needs please give Evans Nelson & Company CPAs a call today (775-825-6008) and we will help you find the right person to help you with your financial needs.

Reno’s Best CPA,

Tim Nelson

What is the Difference Between A CPA and a Financial Advisor2016-09-22T21:51:28-07:00

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

CPA in Reno Explains Offer In Compromise2016-09-22T21:49:42-07:00

Ways to Start Talking to Your Children About Financial Planning

[youtube]http://www.youtube.com/watch?v=zocentEI7rQ[/youtube]

After hearing all the news about a struggling economy, I felt it was time to talk about financial planning. More specifically I thought it was time to talk about teaching your children about financial planning.

Too many people seek the help of an accountant in Reno, Nevada because they have no clue about financial planning. That is because they did not learn about it as a child. Parents can make a huge difference in how their young ones view spending, saving, and even giving, by taking a few simple steps. Providing your kids with an allowance gives them the opportunity to learn to budget and to track their spending. It’s never too early to start learning how to manage your money.

Allowances

In order for children to understand finances and learn to start financial planning, they must have access to money. An allowance serves this purpose. It should be just enough to meet the needs of the child, but not every want. This will force a child to make decisions and to see the consequences of their spending decisions. It also allows the introduction of a budget and planning for future purchases.

Spending

The art of spending is a huge part of financial planning. Of course, children love to spend their money, but doing so wisely is a skill that must be taught. They must learn to budget for bigger expenses like special toys or activities they wish to do. Then, a child must also learn to be a smart shopper by learning skills like comparison shopping and understanding unit prices. One good way to do this is to involve the children in purchasing decisions of the family such as meal planning.

Saving

An accountant in Reno, Nevada will advise you that a savings plan is a vital part of financial planning. The same is true for children. The first step is to discuss savings goals, then have the children set aside a percentage of their allowance to meet that goal. This should be done before anything is purchased. For children older than 7 or 8, set up a bank account and make regular trips for deposits. For younger children , invest in a compartmentalized piggy bank. One final note – do not deny the child access to the money; they will become reluctant to make deposits.

Giving

Just like with savings, children also need to make giving a part of their financial planning. Again, a percentage should be determined and set aside for charities of choice. For some, this might mean a local charity or it could simply mean tithing to the church. It is also a good idea to have them participate in fundraisers so that they truly begin to appreciate the value of charity. In addition, make giving presents a part of this plan. Children should budget to buy gifts for friends and family.

Accounting

So, your kids have been taught how to spend and save, but do they know if they are doing a good job? An accountant will tell you that a budget only works if the spender knows where his or her money is going. Children are the same. For young children, have them put their receipts into an envelope for each month. A brightly colored chart that tracks spending can be a great teaching tool for them to see where the money is going. For older children, teach them how to record their spending on a spreadsheet.

As a parent in Reno, Nevada, it is never too early to start teaching children about financial planning. Do not just give them an allowance and expect them to spend wisely, because they will not. Instead, give them an allowance and discuss with them the things they need to purchase versus what they want to purchase. In addition, include in the financial planning discussions on savings and giving. Then teach the children how to track their own budget. As an adult, they will thank you.

Reno’s Best CPA,

Tim Nelson

Accountant in Reno, Nevada

Ways to Start Talking to Your Children About Financial Planning2016-09-22T21:47:31-07:00

Why the CPA Exam Helps Produce Quality CPAs in Reno, Nevada

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Quality CPAs in Reno, Nevada are a direct result of the effort and requirements it takes to pass the CPA Exam. In order to become a certified public accountant in Reno, Nevada, a candidate must possess the right prerequisites and must possess a depth and breadth of knowledge that is just not found in the average accountant. This exam is not easy to pass, nor is it designed to be so. However, those who pass can assure the public that they do indeed know what they are doing.

The Exam

The CPA Exam is a standardized test. All of the questions are created and approved by experienced certified public accountants and are subjected to rigorous testing verifications. This helps to ensure that anyone sitting for the exam must demonstrate knowledge of scenarios that will be faced in the real world. All 50 states plus the District of Columbia and several territories such as Puerto Rico and the U.S. Virgin Islands require this exam.

Protocol

Do not make the mistake of thinking that the CPA Exam is a simple multiple-choice test; it is not. The test itself takes 14 hours and contains simulated case studies. The four sections can be taken in any order and over the course of 18 months. This allows those seeking to take the test to focus on the individual sections which provides a greater depth of knowledge. However, keep in mind that each quarter there is only a two month window to take the exam, and no test may be repeated within that window.

Prerequisites

Before an accountant in Reno, Nevada can sit for the CPA Exam, he or she must have the right background. In general this means a degree in accounting or a related field such as finance. Since many states require 150 credit hours, most applicants have a master’s degree. States also require course work in specified areas such as financial accounting, auditing and business law. However, keep in mind that requirements do vary by state so it is a good idea to check with your state.

Preparation

Not only are the prerequisites rigorous, but the time required to prepare for the CPA Exam is also demanding. Candidates wishing to become a certified public accountant must be willing to devote hours of concentrated time studying the different areas of the test. It is even a good idea to find a CPA examination prep course at a local university. For a list of accredited ones, visit the websites of AICPA (American Institute of Certified Public Accountants) or NASBA (National Association State Boards Association).

Components of the Test

Anyone taking the CPA Exam must demonstrate not only depth of knowledge but breadth as well. The test covers four sections. The first is AUD, or Auditing and Attestation, which covers auditing procedures and standards related to attestation. BEC, or Business Environment and Concepts, applies business concepts and reasoning to real life transactions. FAR, or Financial Accounting and Reporting, concerns accounting principles for private business organizations, not-for-profit organizations, and government agencies. Finally, REG, or Regulations, pertains to regulations such as federal taxation.

For those seeking to become a CPA, the path is a long and arduous one. It requires a college degree and long hours of study and preparation. That’s because a candidate must prove that they have expertise in a wide range of accounting principles that can be applied to real life situations. This means the client knows that his or her situation will be taken care of. That’s the assurance that comes from hiring a quality Certified Public Account in Reno, Nevada.

Why the CPA Exam Helps Produce Quality CPAs in Reno, Nevada2016-09-22T21:44:58-07:00