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Reno CPA Tim Nelson Describes Why He Became A CPA

A 150 hours of schooling, passing the CPA exam, and continued education… But why did I want to be become a Reno CPA? Better yet, why did I want to open my own office?

Growing up I always had a mind for numbers and was interested in business. I started my entrepreneurial ventures at a young age. When I was 13, my brother, who was good in sports, started playing in Babe Ruth League. Since he was a better athlete than I was, I decided to run the snack bar instead of playing. This was a great way to make money, and learn about profit potential. Now, at this point I did not have a clue that being a Reno CPA was in my future. I just knew that I was comfortable with numbers and enjoyed business.

After graduating from Hug High School, I went on to the University of Nevada, Reno. It was there, in the accounting department, that I was guided into the world of accounting. My professors were great and really did help steer me in this direction. Being a Reno CPA made sense. It was everything I enjoyed, along with the ability to help individuals and businesses.

When I started off, I was working with larger firms, but I started to notice a problem. A lot of the CPA firms that I worked for were all about making sure the numbers were right, but not as worried about the client. I decided that I had to run my own firm and do things in a more personal manner than the larger accounting firms.

As a Reno CPA, I like the mentoring aspect of the business. My personality is such that I really like to, “think outside the box,” it is such a cliché but it really helps them in areas other than accounting and the numbers. Being a CPA is a great way to help people while working with numbers and business. Yes, there was a lot of schooling and a test to get here, and I continue to educate myself yearly, but I love what I do.

Reno’s Best CPA,

Tim Nelson

Reno CPA Tim Nelson Describes Why He Became A CPAencpaswp2022-11-29T14:18:08-07:00

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

Your Reno Accountant Discusses The Top Two Tax Credits

Do you know what the best tax credits of the year are? If not, then you should talk to a Reno accountant. Many people are turning to tax-filing programs to take care of their taxes. The problem is that these programs don’t tell you what the biggest tax breaks of the year are. Working with a CPA is a great way to learn about things you can do throughout the year that will provide you with more write-offs.

Now back to the top two tax credits of the year. The first is the adoption of a foreign child and the second is a buying an electric golf cart.

Let’s start by looking at adopting a foreign child. There is a dollar for dollar credit for the expenses of adopting a child. Although this is a great credit, not many people are going to do this, but it is still an optional credit. Now, let’s turn to the electric golf cart. You may think I am joking, which I do from time to time, but I am not.

The second best tax credit for this year is buying an electric golf cart. Furthermore, if you have/add headlights and taillights on your electric golf cart, it fits the national criteria for an electric car. Because it is classified as a car, you get a 50% tax credit for the purchase price, presuming that it’s a new golf cart.

One of the local reporters had a news segment on the electric golf cart and figured that between the special sales tax deductions for a new vehicle, the 50% tax credit for buying a golf cart that is road ready, and all the other discounts and benefits, the cart is free. He figures that the $9500 electric golf cart that he bought was free.

For a simplified description of the credit, you can check out eHow’s guide: How to Get a Golf Cart Tax Rebate.

You probably hear about all the other energy savings stuff, like solar and wind power, but how about the electric golf cart. This one item is a great example of why you should work with a Reno accountant. We will help you understand all the credits available to you, and make sure you are getting the most money back.

Reno’s Best CPA,

Tim Nelson

Your Reno Accountant Discusses The Top Two Tax Creditsencpaswp2022-11-29T14:18:40-07:00

Certified Public Accountant Tells You How To Write Off The Holidays

We are in between holidays and now is the time to hold those infamous office Christmas parties. If you are like most business owners, these can be fun, but can add a lot of stress to an already busy time of the year. You are focused on wrapping the year up financially and planning for next year. However, these parties might provide an opportunity to get some year-end write-offs. As a certified public accountant in Reno, it is my job to tell you about as many tax deductions as I can.

The first qualification for a tax deductible holiday party is that it must be for your employees. One of the big qualifiers for it is who attends. If the party is just for employees and their families along with the owners, then it will probably be considered a fully deductible event. If this is what a party can be, then what can it not be? It cannot be a party for your customers or for yourself. You can invite non-employees, but then the deduction gets complicated. It may be only partially deductible.

As a certified public accountant, I want to give you some tips that will help you if you are audited. Another thing to think about is the location of the party. You can have it anywhere, but a location other than your home is the best choice. Having it at an office or other venue will make it less controversial should you be audited in the future.

The most important part is making sure to keep the proper documentation. You need to keep all the receipts from the party. It is also a good idea to keep a list of the attendees and their relationships and take some photos at the party. You should keep this documentation for at least three years.

I just wanted to give business owners a different way to look at the holidays. If you want to have a deductible holiday party, than you should talk to a certified public account in Reno.

Reno’s Best CPA,

Tim Nelson

Certified Public Accountant Tells You How To Write Off The Holidaysencpaswp2022-11-29T14:19:20-07:00

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 Advisorencpaswp2016-09-22T21:51:28-07:00

Ways to Start Talking to Your Children About Financial Planning

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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

What is the Big Deal with Financial Planning?

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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

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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