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A Reno CPA Is A Translator

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

A Reno CPA Is A Translatorencpaswp2022-11-29T14:18:14-07:00

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 includable 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

A CPA in Reno, Nevada Explains The Estate Taxencpaswp2022-11-29T14:18:19-07:00

Tax Preparation In Reno And Electronic Filing

Everything today is moving online, and the way you file your taxes is no exception. More and more returns are being filed electronically today. As a Reno CPA I have to let you know that if you file electronically, it is going to save you time and is going to be a lot faster in many different ways. When it comes to tax preparation, you need to know your options.

Usually if you were to send in your paper tax return, it would take three to four months for you to get any acknowledgement from the IRS. With electronic filing, you usually get acknowledgment within 48 hours. This is great, because you don’t have to spend months worrying about whether your return was filled out correctly.

Along with electronic filing comes an option for direct deposit. This is the really cool part about how technology has played into taxes. You go through the work of filling out your return and then you have to play the waiting game. Well not any more, yes you will still have to wait, but with direct deposit, your money will be deposit sooner and there is less chance of your check getting lost in the mail. Some people worry about the safety of providing the IRS with your bank account information, but as a Reno CPA I want to let you know it is just as safe as your check going through the mail.

You also have to consider the time you will save by not having to go to the post office to send in your return. The trip to the post office alone can take a lot of time out of your life.

Lastly, an interesting fact is that the IRS is pushing for electronic filing. Next year a CPA who files 100 tax returns will be required to file most of the returns electronically. If you are still wary about technology and electronically filing, I understand. You need to contact Reno’s Best CPA for more information and to get help with your tax return.

Until Next Time,
Tim Nelson

Reno’s Best CPA

Tax Preparation In Reno And Electronic Filingencpaswp2022-11-29T14:18:25-07:00

CPA In Reno Explains Debt Forgiveness

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

CPA In Reno Explains Debt Forgivenessencpaswp2022-11-29T14:18:31-07:00

A CPA in Reno Explains The Gift Tax

As a CPA in Reno, I understand that you may be having a hard time understanding all the different taxes that are out there. One of the taxes that is not understood is the gift tax.

The IRS defines the gift tax as, “a tax on the transfer of property by one individual to another while receiving nothing, or less than full value, in return. The tax applies whether the donor intends the transfer to be a gift or not.”

Like many taxes, there is an annual exemption for the gift tax. The exemption is $13,000. Therefore, you can give any individual up to $13,000 with no problem. If you give them more than $13,000 in a year then you have to file a special gift tax return.

There are many questions about the gift tax. I will do my best as a CPA in Reno, to answer some of them, but for more answers visit the IRS’ website.

Now that you know what a gift tax is, you might be worried about being taxed for something that you have given. Do not panic. There are gifts/donations that are excluded from this tax. First, remember that there is an exemption; you can give up to the exemption amount without having to worry. Second, if you pay medical or tuition for someone, it is excluded. Third, gifts to your spouse are not included. Fourth, a gift to a political organization is not included. In addition, gifts to certain charities are not included.

If you are worried about what you may owe in taxes, see if your gift falls under one of these categories. Also, if you are the recipient of the gift do not worry. The donor usually pays the tax associated with the gift.

The gift tax is fairly straightforward, but the best advice I can provide is to work with a CPA in Reno if you think you are going to gift a substantial amount of money. You do not want to give a gift or do a good deed and then have the IRS hounding you because you did not pay the appropriate taxes.

Reno’s Best CPA,

Tim Nelson

A CPA in Reno Explains The Gift Taxencpaswp2022-11-29T14:18:58-07:00

Accountant in Reno Helps You Understand State Taxes

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

Accountant in Reno Helps You Understand State Taxesencpaswp2022-11-29T14:19:14-07:00

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 Possibleencpaswp2019-03-28T15:00:00-07:00

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?encpaswp2016-09-22T22:00:40-07:00

CPA in Reno Explains Offer In Compromise

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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

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