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The Mortgage Debt Forgiveness Act

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Are you “upside down” with your mortgage? Do you know how the tax implications of walking away from your home or having short sale can affect you? How can a Reno CPA help you with these types of mortgage issues? What are the tax implications of a short sale, foreclosure and other options? The Mortgage Debt Forgiveness Act ends this year. Do you understand what the benefits can be for you?

Millions of homeowners around the country are “upside down” with their mortgages. Being “upside down” means you owe more on the mortgage than the house is worth. Real estate values have fallen dramatically, especially in Nevada.

So, many people are asking “What are the tax implications of getting rid of my house? Should I short sell it? Foreclose it? Should I stay or just walk away?”

Here’s an example. A house is worth $200,000 but the mortgage is for $400,000. The Bank will usually send a 1099 or 1099C (cancelation of debt) form for that difference of $200,000.

The IRS will normally require you to pay on the tax owed for that $200,000. But you didn’t “receive” that money, the house is still the same house, and you got rid of it. It isn’t worth $400,000 anymore, you can’t sell it for $400,000 but the mortgage is still for that amount.

The Mortgage Debt Forgiveness Act, which runs through the end of 2012 (December 31, 2012) says you don’t have to pay tax on that $200,000.

Many people are worried about that huge tax liability. They are not sure if it would be better to try to short sell or foreclose on their house before the end of 2012 to be able to use the Mortgage Debt Forgiveness Act before it expires and avoid that tax.

Nevada has had its fair share of foreclosures and other mortgage issues. It is very important to sit down with a Reno CPA to discuss the options and tax implications of walking away from the house, vs. short selling, foreclosing or simply keeping it.

A Reno CPA can help you determine the best course of action, based on the many factors of your personal situation, and can help save you thousands of dollars (along with saving you time and frustration) by helping you determine the best choice for you.

Contact Evans Nelson & Company, CPAs for more information today.

The Mortgage Debt Forgiveness Act2016-09-22T15:44:22-07:00

Earn a Great Living as a CPA

Career in AccountancyA certified public accountant is often times the first line of defense for business owners who need to make sure that they are filing all of their tax forms properly. There are currently over one million CPAs practicing in the United States. While that may sound like a lot, the truth is that there is room for plenty more.

To become a professional CPA, one must pass the Uniform Certified Public Accountant Exam after meeting certain state and federal experience and educational requirements. CPA certification requirements have varied over time, in order to make sure that those who earn their certificate are able to provide the highest quality service to their clients. CPAs have the skill to complete a wide range of finance related jobs with extreme competency.

A small business CPA will also have the ability to spot and correct financial errors before they cause serious damage. Errors like this could cause financial hardship, even forcing a business to shut down or trim their workforce. It could also end up forcing the IRS to pay them a visit.

CPAs can also serve as consultants and sounding boards for their clients new business ventures. Advice from someone who has meet all of the necessary CPA requirements is something that most business owners would love to receive.

As a certified public accountant, one could help a business to improve their overall credit rating. Those businesses that have been struggling due to poor planning or the recent recession could be saddled with a higher quality financial plan. The right bit of planning from a CPA could be all that is needed by business owners who have fallen on hard times.

Perhaps the best news is that those who decide to become a certified public accountant will probably never have to worry about being out of work. One thing for certain is that there will always be a need for those with high quality accounting skills!

Earn a Great Living as a CPA2016-09-22T15:42:09-07:00

Three Key Facts to Know When Prepping for the CPA Exam

Three Key Facts to Know When Prepping for the CPA ExamScores of colleges and universities offer the chance to major in accounting, because of how versatile the degree is. Indeed, by taking plenty of business courses with a focus in accounting and financial management, you’re diversifying yourself in order to fit into a number of different industries. But just because you graduated with a degree in accounting doesn’t automatically make you an accountant.

Becoming a certified public accountant, or CPA for short, is a benchmark many choose to go on and accomplish, because it greatly increases their employment opportunities. CPAs tend to be in high demand because their services are just as good as those of tax relief attorneys but at typically more affordable rates. Plus, CPAs can provide auditing services to the public, as well. Since becoming a CPA is a significant commitment, here are a few items you definitely need to know before you consider it:

You’ll need a college degree.

Just like you can’t be expected to become a plumber without having the necessary training first, you likely won’t be able to pass the CPA exam without a number of years of college under your belt to lay the groundwork. Your degree track might be very regimented, but take courses in business law and other areas of management, too, in order to get a full education in the field. Then, the real fun can begin.

You’ll need to study. A lot.

The best form of CPA training and practice is to simply bury yourself in books for the months leading up to the exam. The CPA certification requirements always involves successful completion of the examination, which is uniform across all 50 states and in Guam, Puerto Rico and the nation’s capital. Think of it as the bar exam but for accountants and you’ll be able to view in it the appropriate context.

You could benefit from CPA training courses, too.

Familiarize yourself early on with the CPA requirements. If they sound absolutely overwhelming to you and you begin to hyperventilate, it might be a good idea to look into some CPA training classes to help prepare you. The CPA exam is particularly daunting, too, since it’s comprised of four different sections, all of which need to be studied for at great length. Everyone learns differently, and if you think you could learn well in a CPA training course, definitely get involved — sooner rather than later.

The most important thing you need to keep in mind is that passing the CPA exam is an investment in your future. Once you obtain your certification, you’ll also need to amass plenty of on-the-job experience, too, to truly learn how to be the best accounting professional you can be. CPA is just a title, and you want to show your employers how valuable you the person can be to their organization. It takes time, but when it comes to CPA training and preparation, it’s always time well spent.

Three Key Facts to Know When Prepping for the CPA Exam2016-09-22T14:22:00-07:00

Small Business Consulting: Fresh Eyes Equal Fresh Savings!

Why is small business consulting a necessity? Starting a business and running a business are difficult tasks. There are many different things to worry about, and financial issues are one of the main ones. Without a full understanding of all the financial aspects of a business, owners could potentially lose money or face even more dire consequences. A CPA can help with financial consulting in Reno, Nevada and ensure that the business is on track to succeed.

Defining Business Structures

One of the most important small business consulting roles a CPA can play happens when you are starting your business. You will need to decide on the best structure, and the structure you choose will affect several different things. This includes taxes and what you will owe to the state you live in, and much more. A CPA can ensure that you choose the correct structure for your personal situation and the correct structure from a financial and tax standpoint.

Creating a Legal Tax Strategy

CPAs understand tax laws in-depth, meaning that they can help you create a legal tax strategy that accomplishes two things: keeps you in compliance with state and local laws and allows your business to keep as much money as possible. With financial consulting from a professional CPA in Reno, Nevada, you will understand exactly what taxes your business must pay, when they must be paid, and what deductions your business can claim as well. This will allow you to keep every cent possible in a legal manner, so you are covered without paying in unnecessary money.

Determining Investments

Another important thing a CPA can do during small business consulting is help you determine what kinds of investments your company needs to make and can afford to make. From marketing to other business ventures that can eventually help the growth and success of your business, a CPA can help advise you on what the best choices are while staying within your investment budget.

Annual Tax Return Preparation

One of the things a CPA is most known for is preparing the annual tax returns. This is especially important for businesses, because there are certain forms that must be filed and certain types of taxes that must be paid. Your CPA can also set up different types of tax payment plans and ensure that you are fulfilling all of your legal obligations and that you do not owe the IRS anything.

For small business consulting, a fresh pair of eyes will equal a lot of savings and can make sure your business is stable and financially secure.

Your Reno CPA,

Tim Nelson

Small Business Consulting: Fresh Eyes Equal Fresh Savings!2016-08-31T21:34:02-07:00
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