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.
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.
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.
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.
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.
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.
Filed Under: Blog Posts, Financial Tips, Nevada CPA Talks Taxes, Tax Deductions, Tax Planning Tagged With: accountant, certified public accountants, CPA in Reno, evans nelson & company, evnas nelson company, nevada, nevada tax, nevada tax preparation, tax deduction, tax deductions, tax preparation, taxation, taxes, tim nelson reno
It is important to keep finances organized, whether for an individual person or a business. Many people do not organize their finances until tax time comes. They often find they have a mountain of information to sift through and no idea where to start. Here are some tips on better financial and tax organization from a public accountant in Reno, NV.
Bank accounts are crucial money-management tools. Single people should have both a personal expenses and a savings account. Families should have a family account, which wage earners can deposit money into for household bills. They should also have individual accounts for personal spending, plus a family savings account. A self-employed person or small business owner needs to keep their company’s expense separate. This will keep personal and business matters from mingling. A public accountant in Reno, NV can help set up a plan for how to contribute to each account.
Many financial records can be thrown away after a time. Any papers about major expenses (a vehicle, appliance, investment, etc.) should be kept forever, or at least until the item is no longer in use or needed. Anything about taxes and personal or investment income should be kept for at least 3 years, although six is advisable in the event of an audit. Credit card and bank statements, receipts, and utility and other bills can be thrown away annually once taxes have been filed with a public accountant in Reno, NV. Streamline your life and save paper by scanning and saving these papers.
An individual can use a simple, low-tech paper filing system. Set up files according to the area of expense: loans (mortgage, car, etc.), bank and credit card statements, insurance, household expenses (groceries, gas, clothing, etc.) and bills. Public accountants advise that certain tax-deductions need their own files, like education, health care spending, travel, charitable donations, investments, etc. Keep a box in a visible place to put all receipts and bills into when you empty your purse or briefcase. Reconcile the box’s contents weekly when balancing bank statements.
Self-employed people and small businesses should organize their financial records with a computerized system. This minimizes missed payments and keeps the volume of paperwork down. Important items can be scanned into the computer and saved onto a disk for your public accountant to use at tax time. Dates such as quarterly tax payments and payroll can be set ahead of time. Linking a business’s bank account with the software can result in payments being automatically deducted. All these measures reduce hassle and increase efficiency.
Individuals can pay their taxes once yearly on or before April 15. Businesses should make quarterly or bi-annual contributions to a tax account. This keeps the amount owed from becoming unmanageable. Any time taxes are paid, a payment for work or a service or a money gift is received, or a life insurance or other investment dividends report arrives, the paperwork should go right into the tax file for the public accountant in Reno, NV. They should get all the information you have well before tax time, in order to get the best tax deductions possible.
Careless record keeping can result in missed deadlines and payments. A certified public accountant in Reno, NV can give valuable advice on how to streamline your tax and financial organization. Everyone should review their own procedures periodically and see how they can improve them.
So your big day has come and gone, now what? You have made it through the chaos of the wedding and I am sure taxes are not on your mind, but it is important to understand how getting married can change your tax situation. A married couple should take some time to sit down with their CPA in Reno to discuss how their tax situation will change now that they are married.
After the marriage, there is usually a move. Whether it is one part of the couple moving in with the other or the couple moving into a new place, a new home means a new address. It is important to remember to update your employer, the post office and even the IRS of your address change. You want to make sure that all of your tax information will arrive at the proper address.
Another thing that commonly happens after marriage is the changing of a last name. Whether a spouse changes their last name to the other’s or adds a hyphen between the names, it is important to remember to notify your employer, the post office, the IRS and, well, everybody. The last thing you want come tax season is confusion over who you are.
After getting married, the couple usually files their taxes jointly. By filing a joint tax return, the couple doubles the limitations and deductions that you otherwise would get if you filed two single returns. However, there are certain differences in the tax code where the “marriage penalty” comes into play.
This is a situation where filing jointly causes higher tax than you would pay if you filed two single returns, even though the taxable income is the same. This has largely been eliminated for the lower income tax brackets through 2010, but would apply once you reach a taxable income of $137,300 (in 2010) or higher. For example, assume that a married couple earned $120,000 for one spouse and $100,000 for the other, then the tax as a married couple would be $44,607.50. If they each filed single, the total tax would be $43,782.50, or $825 less than joint filing. The “penalty” increases with the amount of taxable income earned as the couple.
After getting married, you do not need the added stress of taxes on your plate. If you are concerned that you may have missed something or just want clarification on how you should file as a couple, you should contact a CPA in Reno. Depending on your tax situation, the CPA will be able to tell you the best way to file. The CPA in Reno will also be able to talk you through the name change and address change process. They may not be able to help you with the actual steps, but they will able to remind you of anything you may have missed.
Filed Under: Experience, Frequently Asked Questions, Nevada CPA Talks Taxes, Tax Planning Tagged With: cpa, CPA in Reno, cpas, nevada tax, tax, taxation, taxes, tim nelson, tim nelson reno
Going through a divorce is a very stressful time. You need to figure out child custody, child support, division of property, etc… However, there is one thing that may have not made it on your list of things to remember-taxes.
Many things come into play as far as taxes are concerned when going through a divorce. The first thing to know is that you are supposed to file based on your status on the last day of the tax year. That means if you get divorced on December 28, you file single for the entire year! Similarly, if you get divorced on January 2, you will need to file jointly (or married filing separately) for the prior year.
Alimony may be a factor, and is governed by the divorce decree or separation agreement. Note that if you get into a situation where Spouse A owes Spouse B for alimony, and Spouse B owes child support back to Spouse A, do not NET them! The IRS only allows you to take the NET amount as alimony. If you pay the entire amount, and get a separate check back, you can take the FULL amount.
Refund checks (or direct deposits) are always an exciting factor. If you are due a refund with your former spouse, make sure it goes to a neutral party who will give you ONLY the refund you are entitled to. If your former spouse gets you to sign on the back of the check and cashes it into their account, you may never see the refund! Similarly, do not direct deposit it into an account you do not have control of! My recommendation is to have a check sent to the Certified Public Accountant’s office. Then have both spouses come in to sign it. The CPA can then cash the check and remit the appropriate amounts to each spouse.
Even before you get divorced, it is important to get advice to determine the tax issues at hand. For example, what if he gets the primary residence and you get the rental house to live in? The tax bases are likely very different, and you will end up owing tax on a gain of a former rental that he can exclude from his residence since it qualified as a primary residence. There are many other factors to consider in divorce taxation. The IRS publication number 504, Divorced or Separated Individuals, deals with many of these issues, but it is important that you discuss all of these with your Reno Certified Public Accountant before they bite you!
Filed Under: Financial Tips, Frequently Asked Questions, Nevada CPA Talks Taxes, Nevada Financial Advice, Tax Planning Tagged With: certified public accountant, certified public accountants, evans nelson & company, nelson company, nevada, professional accountant, reno accountant, tax, taxation, taxes, tim nelson, tim nelson reno
He is short, but as wide as he is tall with no fat. He is very strong. He has a high voice. (KoD,Prologue)
After Galad kills Valda, Doirellin agrees that the Whitecloaks must oppose the Seanchan and fight in the Last Battle even if it means allying with Aes Sedai and Asha'man. (KoD,Prologue)