evans nelson & company

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 Compromiseencpaswp2016-09-22T21:49:42-07:00

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 Planningencpaswp2016-09-22T21:47:31-07:00

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

[youtube]http://www.youtube.com/watch?v=ulswOU-NkwE[/youtube]

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, Nevadaencpaswp2016-09-22T21:44:58-07:00

A Certified Public Accountant Explains Goal Getting Versus Goal Setting

I am frequently asked about the importance of setting goals when you are trying to get your finances in order.

I have been to many classes on goal setting through the years. The most influential classes I have attended have been about goal GETTING as opposed to goal setting. While it is important to dream about or visualize your goals, it is even more important to plan how you are going to get there! The old adage goes that a journey of a thousand miles begins with one step. We can apply that to finances via the phrase “you can’t get to retirement if you don’t start putting away money TODAY.”

An important part of good financial management begins with organization. If you do not know what you have (or what you owe), how can you begin to manage it? For example, I have a client who came into some money and asked me which of their credit cards to pay down. Should it be the largest balance card, or should they wipe out a few of the smaller cards. The correct answer was whichever card was charging the highest interest rate! It did not matter what the balance was, if the interest rate was low.

Once you figure out where you are (and that can be daunting), figure out where you are going. Determine spending habits, and more specifically WANTS versus NEEDS. Make sure the needs are taken care of, and then determine if the WANTS are worth the price you are paying for them. For example, I had a client who gave up their cable at a monthly cost of $60 because the programs she was watching just were not worth the cost. Instead, she committed to a healthier lifestyle, getting out and walking, riding a bike, or just sitting in the park. You would be surprised how entertaining people watching in a public place can be!

Once you have your financial goals down on paper, in a specific format, with measurable results, it is time to act on those goals. Put away what you have committed to, and stick to your guns. Use the common phrase “pay yourself first,” since the bills will always be there.

Determining where you are, what the plan is to get you where you want to be, and ACTING on those plans, are the three steps to ultimately getting what you want. And if you’re weak from time to time, see a Reno CPA for support!

Reno’s Best CPA,

Tim Nelson

A Certified Public Accountant Explains Goal Getting Versus Goal Settingencpaswp2016-09-22T21:35:18-07:00

What Do All The Initials Mean? (CPA, CVA, CFE)

I thought this was a fun question to discuss. I am often asked, “What do all the initials that follow your name mean?” This question is very important. People need to understand whom they are hiring to work with their money and knowing the difference between these different sets of letters will help you make the right choice.

The Easy One- CPA

The CPA is the easy one. CPA stands for Certified Public Accountant and means that you have special training, primarily in accounting and taxes, to help individuals and businesses in their financial dealings. It requires that you pass a difficult 4-part exam, an ethics exam, have at least 2 years of experience working for a CPA, and (under Nevada law) have at least 1,000 hours of looking at companies books and preparing their financial statements. Furthermore, once you become a CPA, you are required to have approximately 40 hours of continuing education each year. I say approximately because depending in which area you practice, it could be substantially higher than that! Most people do not know that each state certifies the CPAs in their state, rather than having a national certification. The requirements in the State of Nevada are more stringent than those of our neighbor to the west, California.

Okay Now For CVA

The CVA stands for Certified Valuation Analyst. It means they have special training in the valuation and determination of value of businesses. It does NOT mean they can do appraisals. I originally used the certification in helping attorneys resolve accounting matters in the court (litigation support). I’ve also used it in estate cases, divorce cases, shareholder lawsuits, mergers with other companies, helping companies determine whether or not to buy a competitor, helping business owners decide whether or not to add a new partner or enter a new line of business, and even in gifting situations where a business owner wants to give part of their company to their heirs. It is extremely technical in nature, and the part I like best is explaining what is going on in easy to understand terms to my clients.

Last But Not Least- CFE

My most recent addition to the letters behind my name is the CFE certification. It stands for Certified Fraud Examiner, and means I have formal training in the research and investigation of fraud and forensic accounting matters. I have been doing this for about twelve years, and love it! The “sleuthing” of accounting really gets me going. I love seeing how the fraudster got away with it, assisting law enforcement in putting away the bad guys, or even resolving how an owner is stealing from his partners! It can be complex, or as simple as fixing procedures around the office to deter employees or customers from making off with the valuable assets of the company.

Before you hire an accountant, make sure you understand what they are certified in and that they can adequately handle your financial needs. Remember, when it comes to your money you need to make the best decisions possible.

Reno’s Best CPA,

Tim Nelson

What Do All The Initials Mean? (CPA, CVA, CFE)encpaswp2016-09-22T21:26:52-07:00

What is the Big Deal with Financial Planning?

[youtube]http://www.youtube.com/watch?v=4iguTKNyX84[/youtube]

In today’s uncertain economic times, financial planning has become critical in order to meet life’s financial goals, including retirement. A thorough analysis of the current financial picture will help point the direction toward meeting those goals and will help avoid excess spending. This includes maintaining a rainy day fund, not relying on social security and calculating the amount of the nest egg. As a Reno CPA, I thought I would take some time to talk about the importance of financial planning.

What is Financial Planning?

Financial planning means analyzing the current financial picture, determining what the long-term goals are and then devising strategies to reach those goals. Strategies can include a variety of things, including automatic deposits into savings accounts, investments in stocks or real estate, or even insurance plans. The key is to make sure those plans are flexible. Not only can goals change, but so can strategies as your situation changes. Marriage, kids and a home all have a way of changing our priorities.

The Here and Now

However, financial planning is not just about the future; it’s about the present. Because this type of planning requires a full analysis of the family’s current financial picture, they know their exact net worth, income, and expenses. As a result, they are better able to manage spending and can avoid living paycheck to paycheck. They will also avoid being caught unaware by massive debt. An important bonus considering the average American carries a credit card debt of around $16,000.

Expect the Unexpected

A major component of any financial plan is a rainy day fund. This is a separate savings account that is set aside for emergencies only and usually contains at least three to six months of expenses. The reality is that no one is safe from unexpected illnesses, accidents or unemployment. Insurance, while another important part of the plan, may not cover everything and may not be easily accessed. In fact, some studies have shown that families without such a backup are far more likely to accumulate debt during a disaster.

Retirement Numbers

Retiring some day? Well, don’t count on social security. Not only is the age being increased to 67 for those born after 1959, but it may not be there. The reserves held in trust to fund social security are expected to be exhausted in 2037. After that income tax will only be able to pay 75 percent of expected benefits. Medicare isn’t any better and is expected to remain solvent only until 2029. As a result, Americans had better get busy with financial planning if they want to have a nice retirement.

How Much Is Enough?

The answer to this really depends on a person’s standard of living and the goals he or she has. However, some experts suggest that people should expect to spend about four percent of their savings each year. That means if expenses are approximately $60,000 per year, they should have a targeted retirement fund of 1.5 million. Sadly, most Americans are not even close. Those between the ages of 65 and 75 have an average of around $56,000. That means they get to spend roughly $2,200 a year.

These numbers suggest one thing – Americans need to get busy financial planning! Analyzing their current financial picture will help them avoid being buried under a mountain of debt and will help keep them on the road to a wonderful retirement, even when disaster strikes. Plus, a failing social security system will not blindside them and leave them penniless. As a Reno CPA, I am here to tell you that financial planning is the smart and responsible thing to do.

Reno’s Best CPA,

Tim Nelson

What is the Big Deal with Financial Planning?encpaswp2016-09-22T21:21:29-07:00

Tip from Your Accountant in Reno: Two Steps to Creating a Rainy Day Fund

A rainy day fund is an essential part of any family’s financial planning. By putting away a specified amount to be used only during emergencies, a family will be able to weather any emergency easier. The creation of a emergency fund is a simple two-step process. First, conduct a thorough analysis of your family’s current financial status to determine the amount of the fund. Next, set up the account and make regular deposits until the emergency amount is reached. As an accountant in Reno, it is very important to talk about rainy day funds.

Defining a Rainy Day Fund

Most financial planning experts agree that a rainy day fund is a must for any family, but what exactly is it? First, it is money that is set aside to be used only in the event of an emergency. “Emergency” should be taken literally and should not be mistaken with a financial want. For example, buying a new car is generally not an emergency unless your car was totaled and transportation to and from work is put at risk. Also, the rainy day fund should be a liquid asset that can be easily accessed without any kind of delay.

The Importance of an Emergency Fund

The importance of a having a rainy day fund as a critical part of any family’s financial planning cannot be underestimated. No one is immune to unexpected emergencies like car accidents, loss of jobs, or sudden illnesses. Yes, most people carry insurance, but insurance does not cover everything, and there may be a delay in accessing those funds. The rainy day fund will fill in that gap and prevent a family from getting behind in their bills.

How Much Is Enough?

As an accountant in Reno I have to admit that there is some disagreement as to how much money should be deposited into a rainy day fund. However, that figure really depends on a family’s needs. In general, three to six months of expenses should be the minimum. Some experts will even advise that a year’s salary is necessary, but this depends on things like insurance coverage and whether that is even possible for a family to save.

Step 1 to a Rainy Day Fund

In light of this, the first step to establishing a rainy day fund is to review the family’s current financial picture including required spending, discretionary spending and current net income (after taxes). The rainy day fund should come from the discretionary fund. If that is non-existent, then the family should review what it considers to be needs versus wants. Furthermore, a family should review insurance policies and other investments to determine if additional income can be generated.

Step 2 to a Rainy Day Fund

Once the amount of required funds is determined, the family needs to open a low-risk savings account. Since this is an emergency fund, it must be easily accessible which means no CDs or other such investments. It’s a good idea to set this account up with direct deposits in a separate bank from the family’s primary account. The deposits can be stopped when the amount is reached. This takes temptations out of the way. Deposits happen without thought and withdraws require a special trip.

So don’t make the mistake of thinking that nothing bad will ever happen, because it just might. By including an emergency fund in your family’s financial planning, you can minimize the impact. All that is needed is a full analysis of the family’s current financial status and needs. This financial picture will help determine how much to stash away in a savings account. Just remember – it’s for emergencies and not for big purchases.

Reno’s Best CPA,

Tim Nelson

Tip from Your Accountant in Reno: Two Steps to Creating a Rainy Day Fundencpaswp2016-09-22T21:13:05-07:00

A Certified Public Accountant in Reno Reminds Business Owners to Seek Help

[youtube]http://www.youtube.com/watch?v=HG7zHl1L6Nk[/youtube]

As a small business owner you may find yourself overwhelmed and distracted with tasks that are necessary to run your business, but may not be your specialty. I thought I would take some time to talk about the help that a CPA can provide. At some point in time, it becomes necessary for most business owners to call in a certified public accountant to provide small business financial consulting. However, when should this be done? There are certain things or red flags that should prompt such action. These include spending too much time on the accounting side of the business, making mistakes that will lead to an audit, declining assets, draining resources, stagnating revenue and missing productivity.

Failing to Focus on Your Passion

Small business financial consulting services in Reno need to be sought whenever the time spent on the accounting side of the business is greater than the time spent on the business. Chances are that the passion of the owner is really the specialty of the business. For example, a landscaping business probably loves being outside and the creative side of the business. Spending more time hunched over a computer spreadsheet is a sure sign that a certified public accountant in Reno is needed.

The Dreaded Audit

It is a well-known fact that the IRS targets small businesses. If that isn’t enough to get audited, perhaps filing late or other things that the IRS looks for will warrant that dreaded letter from the IRS. Since an audit strikes fear in the heart of every small business owner, this is sure to elicit a call to a certified public accountant in Reno. However, it is a good idea to make the call whenever you realize that the books are a mess and forms are being filed late.

Declining Assets

Another problem that may cause an owner to seek small business financial consulting is what to do with declining assets. Tangible assets like furniture and vehicles can cost a business a small fortune. Plus, there are also intangible assets that may decline such as franchise rights or leases. These can become a complicated issue that can drain a company of valuable resources. Most owners may be aware that these can be tax write-offs, but how to calculate them is another matter.

Stagnant Revenues

No business can stay in business if it is not making money. However, the owner may be scratching his or her head trying to figure out where the problem is. The products or services are excellent and in demand. The advertising seems to be adequate. There just doesn’t seem to be a reason for the lack of success. That’s why many small businesses need to seek the help of a certified public accountant in Reno. They may be able to supply the answers that can really turn the business around.

Lack of Employee Productivity

Every small business owner knows that payroll can be one of the largest expenses facing their business. However, that doesn’t have to be the case. It shouldn’t drain the business of all of its valuable resources. That’s especially true if the work can be done more efficiently or could potentially be outsourced. If it can then a certified public accountant may be able to help guide some of these decisions or find how to make the work more efficient.

So if you are small business owner, you may want to ask these questions. Is the passion being drowned by the drudgery of accounting? Are mistakes being made that can lead to an audit? Are declining assets draining resources? Are revenues stagnant? Do employees seem to lack productivity? If the answer is yes to any of these, consider consulting a certified public accountant in Reno for financial advice.

Reno’s Best CPA,

Tim Nelson

A Certified Public Accountant in Reno Reminds Business Owners to Seek Helpencpaswp2016-09-22T21:01:13-07:00

A CPA in Reno Reminds Business Owners to Seek Help (Part 2)

[youtube]http://www.youtube.com/watch?v=jU_uTG2WA_A[/youtube]

In part one of this series (A Certified Public Accountant in Reno Reminds Business Owners to Seek Help), the signals that should drive small business owners to seek financial advice from a CPA in Reno were discussed. These include spending too much time on the accounting side of the business, making mistakes that will lead to an audit, declining assets draining resources, stagnating revenue and missing productivity. However, don’t despair because a certified public accountant can usually resolve each of these situations easily.

Shifting Focus

The first thing a CPA in Reno can do for business owners is help them put the emphasis back on their passions. It is frequently said that if you want to be successful, do what you love. The problem is that most owners don’t love doing payroll, accounting, or tax preparations. The certified public accountant can take care of all of that. For someone like a landscaper, this allows the owner to put their focus back on their business.

The Dreaded Audit

As long as a certified public accountant is consulted before the IRS targets the business for an audit, the CPA can often avoid them completely. That is because they can avoid those red flags like little or no sales with high expenses. Something like that will catch the attention of the IRS every time. A CPA in Reno can also help avoid late filings and all of the late fees associated with them. Plus, if an audit is called, the accountant will be invaluable during the process.

Declining Assets

Business owners also need the financial advice of a CPA for things like declining assets. These often drain the resources of a company, but that doesn’t need to be the case. Certified public accountants can carefully analyze all of the assets. By doing so they can track each asset and how much it declines. They can then plug this info into a formula and take the depreciation off as a tax-deductible expense over the lifetime of the assets. This can be a substantial savings.

Stagnant Revenues

Stagnant revenues can also be an area that a CPA in Reno can provide valuable advice. Accountants can help the owner create a system so that revenues and expenses can be tracked. Using this system and analysis gleaned from tax returns, they can identify trends and create reports that the owners can use to guide future decisions. They are also able to help the owner understand the reports so that the most can be made from the information.

Lack of Employee Productivity

While employee productivity may not seem like an area where a certified public account can provide financial advice, they can. Think of the reports that are generated through payroll and the tale those reports can tell. Tax returns and payroll can yield a wealth of information including comparing hours worked with the amount of sales. In addition, an accountant might be able to suggest jobs that could be outsourced.

So if any of these situations apply to your small business, do not worry. A CPA’s services can help free up your time so that you are able to return to your passion. He or she can also help prevent an audit or provide expert backup in the event of an audit. The accountant can also carefully analyze reports on assets, revenue, and productivity to provide the business owner with a complete picture of the business. Plus, the accountant in Reno is there to help the owner understand just how those reports can guide the business.

Reno’s Best CPA,

Tim Nelson

A CPA in Reno Reminds Business Owners to Seek Help (Part 2)encpaswp2016-09-22T20:55:55-07:00

Nevada Corporate Tax Planning is Not an Option, It is a Must

[youtube]http://www.youtube.com/watch?v=2zUzGWRlW98[/youtube]

It is time to talk about the importance of tax planning in small business. Nevada corporate tax planning is necessary for any business to be able to meet their obligations to the government, increase their profits and to plan by analyzing previous years’ performance. An experienced Nevada tax accountant can guide a company through the maze of tax laws, advise about debt-reduction strategies and help put more money into growth and development.

Taxes are Unavoidable

It is impossible to avoid paying taxes in business. Any time a product or service is made or sold, the business has to pay taxes on a portion of its profits. Taxes allow the government to give services and protection to its citizens. However, a company can lower its taxes and increase its working capital with tax planning. A business can grow and become more profitable with more working capital. The company’s accountant should discuss what kinds of tax deductions and write-offs are right for the business at the proper times.

Two Basic Corporate Tax Planning Rules

There are two key rules in tax planning for Nevada small businesses. The first is that the company should not take on extra expenses to get a tax deduction. One smart tax planning method is to wait until the end of the year to buy major equipment, but a business should only use this strategy if the equipment is necessary. The second rule is that taxes should be deferred as much as possible. Deferring taxes means legally putting them off until the next tax season. This frees up the money that would have been used to pay that year’s taxes for interest-free use.

Accounting Methods

A company’s accounting methods can influence its taxes and cash flow. There are two main accounting methods, the cash and the accrual methods. In the cash method, income is recorded when it is actually received. This means it is noted when an invoice is actually paid rather than when it is sent out. The cash method can defer taxes by delaying billing. The accrual method is more complex because it recognizes income and debt when it actually occurs rather than when payment is made or received. It is a better way of charting a company’s long-term performance.

Nevada Tax Planning with Inventory Control and Valuation

Properly controlling inventory costs can positively affect a company’s tax deductions. A tax planning accountant can advise how and when to buy inventory to make the most of deductions and changes in stock value (valuation). There are two main inventory valuation methods: first-in, first-out (FIFO) and last-in, first-out (LIFO). FIFO is better in times of deflation and in industries where a product’s value can drop steeply, such as in high-tech areas. LIFO is better in times of rising costs, because it gives inventory in stock a lower value than the prices of goods already sold.

Predicting the Future by Looking at the Past

Good tax planning means that a company takes the past sales performance of their products and/or services into account. In addition, the state of the overall economy, cash flow, overhead costs and any corporate changes need to be considered. By looking at previous years according to the “big picture,” executives can forecast for the future. Knowing an expansion or a cutback will be needed makes planning for it easier. The company can stagger expenses, purchases, staff reductions, research and development and advertising as needed.

A Nevada tax-planning accountant can help a company increase profits, lower taxes and achieve growth for the future. Discuss your business’s needs, wants, strengths, weaknesses and goals with your corporate accountant to develop a tax planning strategy for all of these factors.

Reno’s Best CPA,

Tim Nelson

Nevada Corporate Tax Planning is Not an Option, It is a Mustencpaswp2016-09-22T18:32:45-07:00

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