(775) 786-6141
Have you heard? There’s an election coming up. It’s not easy to miss with the constant barrage of TV, radio, and mail advertisements.
With the General Election a little less than three weeks away, early voting is almost here. Saturday, October 20, 2012, is the first day to vote early in Washoe County and you will then have until November 2, 2012, to cast an early ballot. So, my question to you is, are you going to get out and vote early?
Early voting is an easy and painless process; at least it has been in my experience. With 22 locations in Reno, Sparks, and Incline where you can cast your ballot early, there really isn’t much of an excuse as to why you can’t make it out to vote. You don’t even have to go to your assigned polling location when casting your ballot early. I can hear some of you saying, “I don’t like any of the candidates,” and that’s ok. Nevadans can still cast a vote for “none of the above,” a voting option unique to Nevada, so exercise your voice even when dissatisfied.
If you really aren’t into voting in person, you can also cast an absentee ballot. All you have to do is fill out an absentee ballot request form and have it into the Registrar of Voters by 5 PM the Tuesday before the election, October 30, 2012, in order to receive an absentee ballot. 
Once you receive your absentee ballot, fill it out and make sure that it reaches the Registrar’s office by 7 PM on Election Day (November 6, 2012). Nice and easy and no waiting in line, either. I still think early voting is just as easy or even easier, but there are options out there. So, no excuses!
If neither of these early or alternative options sounds like your thing, please just remember to vote on November 6, 2012. If you vote on Election Day you will have to vote at your assigned polling location which you can find on the sample ballot you receive. If you don’t receive a sample ballot or misplace yours, you can look up your voter registration online through the Secretary of State, find your precinct, and then locate your polling location on the Washoe County Registrar’s web page.
With a record number of voters registered in Washoe County (241,400 as of October 17 according to the Registrar), we can only hope this increase in registration means an increase in voter turnout. The two don’t necessarily correlate, so that is why I am encouraging you to get out and vote. To recap:
• Early voting happens October 20, 2012, through November 2, 2012.
• Requests for absentee ballots are due October 30, 2012, by 5 PM.
• The General Election is November 6, 2012. You must vote at your assigned location.
Once again, you have many options and plenty of time to cast a ballot this election, so please, go vote!
For tax years beginning after 2013, U.S. Citizens and legal residents, with few exceptions, will be required to maintain health insurance coverage.
A number of programs such as Medicare, Medicaid, eligible employer-sponsored plans, plans in the individual market, certain grandfathered group plans and other plans recognized by Health and Human Services (HHS), will be approved to provide this coverage.
The coverage requirement does not apply to:
Others may apply to HHS for an exemption due to hardship in obtaining coverage.
In a recent report, the Congressional Budget Office (CBO) has estimated that, beginning in 2014, approximately 6 million people will pay a penalty tax for not carrying this coverage. The monthly penalty for failure to maintain this coverage will be equal to 1/12 of the greater of a flat dollar amount or a percentage of household income (reduced by the dollar threshold for filing) starting at 1.0% in 2014, rising to 2.5% by 2016 and adjusted for inflation thereafter.
The flat dollar rate is set at $95 for 2014, $325 for 2015, $695 for 2016 and adjusted for inflation thereafter.
Since this estimate is considerably higher than the original 2010 estimate, get set for more heated political debate over the Affordable Care Act.
With the year-end quickly approaching, it’s a good time to start planning your charitable donations. Donating not only allows you the opportunity to help others in need, it can also provide you with tax benefits.
The following are guidelines to help you maximize your tax benefits:
Donations of $250 or less require either a bank record, written receipt, or letter from the qualified organization.
Donations of $250 or more require a bank record or written receipt, AND an acknowledgement from the organization stating the amount of cash contributed, if any benefits were received, and a description of these benefits.
Credit scores…do we really understand where they come from and how they are used? A study just released by researchers at the Consumer Financial Protection Bureau found that credit bureaus sometimes provide Americans with credit scores different than those used by lenders in as many as one out of four times. The study was based on a random sample of 200,000 credit files from the three major credit reporting agencies – Experian, TransUnion and Equifax.
The Consumer Financial Protection Bureau will now begin supervising credit-reporting firms…about 30 companies. Another layer of bureaucracy required because these firms cannot be relied upon to self monitor. And what is the benefit to being inconsistent? It’s not too difficult to provide the same information to the consumer that you are providing to the lender.
Now that consumers are well informed about the necessity to monitor their credit scores, it’s only fair they receive the same information. Credit scores are used in determining who does and doesn’t get a loan, what your interest rate will be, etc. Really important factors. To both the borrower and the lender. Let’s get it right…and be consistent.
With baby boomers nearing or at retirement age, many expect social security to be one of their main sources of income, or at least a nice addition. If you were born between 1943 and 1954, the age for receiving the maximum amount of your earned benefits is 66. This age increases by two months for each year born until being born after 1959 when it plateaus at age 67. However, for all people that earned benefits, benefits can start being collected at 62, albeit with a 25% penalty in the monthly amount for people born between 1943 and 1954 and increasing up to 30% if you were born after 1959.
So which age should you start collecting at?
Let’s assume that full monthly benefits were earned at $1000/month and that you were born in 1950. The average life span for a male is 75 and at this age the retiree would have earned the exact same amount upon retiring at age 62 or 66, $144,000. Of course, at this point the present value of benefits is higher for the people that retired at age 62 since they started receiving money at an earlier date. When considering the present value of money, the break even point for this retiree would be age 81. Of course there are always taxes to worry about, even for social security earned, but these calculations get complicated depending on how much other income is earned.
The moral of this story is: if you expect to live past 81, you are better off postponing retirement until age 66.
“A negative economy has little effect on a given business’ survival. Businesses started in expanding economies in 1995 and 2005, those started just before the downturn in 2000, and those started just after the downturn had almost identical survival paths”…(Source: BLS, Business Employment Dynamics.)
Many new small businesses go under within their first two years but usually the failures can be explained. Knowing the pitfalls associated with a new business and having a professional team, including a Certified Public Accountant (CPA), can maximize your chances of success.
Being your own boss is exciting. It also means hard work and risk taking when you start a new business. You can be a successful business owner if you already have or can learn the right traits, such as being a self-starter, goal-oriented, committed and resilient, to name a few.
You have what it takes. Now what? You need to do your homework and develop a business plan. Here are some things to consider:
Should you buy an existing business or start from scratch?
• You take on more risk if you build your business from the ground up.
• Because a start-up has no previous track record, raising capital to acquire an existing business with a proven track record of success may be easier than a start-up business.
• If you decide to acquire an existing business, engaging a CPA to assist in the transaction is advisable, and will be mandatory at some step of the process for financial credibility and tax purposes.
What’s the best type of ownership for your business (sole proprietorship, corporation, partnership, LLC, S corporation)? There are advantages and disadvantages for each type of ownership. Which software and accounting method is appropriate for your specific business needs? How can you raise capital for your business? Where’s the best location for your business? Should you buy or lease? These are all questions you should consider in developing your business plan.
Before you make your first dollar, you must comply with the state and local licensing requirements.
These include state registration, state and local sales and use tax license, and local business licenses and permits. You’ll need to apply for a federal employer identification number (EIN) if you plan to have employees, or if your business will not be owned as a sole proprietorship.
Your business is now ready for operation. You must keep good accounting records for the preparation of year-end taxes as well as other compliance reporting. Examples include preparation of payroll reports and other government forms. You may also need advice on estimated tax payments that you should make during the year. Let your CPA help you with the record keeping and compliance issues, while you concentrate on running your business.
Having experienced support from the start will help your small business succeed. The right CPA can help you launch your business, assure long- term success and prevent costly mistakes through all the cycles of your business adventure.
I am excited to share what I have learned from participating in the 2012 Leadership Reno Sparks Program. I have really enjoyed the experience and learned so much about our community.
Leadership Reno-Sparks is a year-long program consisting of 12 workshops throughout the year where the participants are exposed to different segments of our community – such as the role of government, law enforcement, education, health care, media, art, history and the economy. Each workshop broadened my perspective on the Reno/Sparks area by giving me exposure to community issues and access to community leaders. I felt that I walked away from every session having learned something new.
In addition to the workshops, the class develops a community project. The class is responsible for both fundraising and the physical completion of the project within a specified time frame. This year’s project was a renovation of the Sparks Senior Citizen Center. Getting 37 people to agree on something is an interesting and challenging but rewarding process! The project was completed in late August of this year, and the results were nothing short of amazing.
If you are new to the Reno area or just want to learn more about our community, Leadership Reno Sparks is a truly worthwhile and enjoyable program. Besides learning so much about our community, you will learn about others who are aspiring leaders within their respective professions or companies and gain wonderful, long lasting relationships!
For more information on this worthwhile program, please contact the Reno-Sparks-Northern Nevada Chamber of Commerce at thechambernv.org or (775) 636-9550.
Next year, unless Congress acts before the end of 2012, year-end tax planning will be challenging. Since 2013 tax rates are set to go up, the conventional wisdom of deferring income into subsequent years should be reconsidered. 
Thus certain high-income taxpayers may want to actually accelerate income into 2012 rather than deferring income into 2013 when the tax rate will probably be higher.
If you expect to be in a higher tax bracket in 2013, there are a few tax planning strategies you should consider:
• Consider selling real estate, securities and other assets held more than one year in 2012, rather than deferring such gains to future years.
• The tax rate on qualified dividends could go from 15% to as high as 43.4% in 2013. Regular corporations and S corporations with excess earnings and profits should look at making dividend payments before the end of 2012.
• Business owners may want to consider pushing into a subsequent year such deductions as retirement plan funding contributions, year-end bonuses and other controllable expense deductions. Asset acquisitions eligible for Sec. 179 expensing could be deferred until 2013, and not electing the 50% bonus depreciation on 2012 assets purchased could be considered in order to increase depreciation deductions in later years.
• Estate and gift tax rates are set to rise from the current 35% rate to a maximum 55% and the lifetime exclusion is decreasing from $5.12 million to $1 million. Thus taxpayers with even modest sized estates should undertake a thorough estate plan review.
Of course, it is difficult to know if Bush tax rates will be extended again for all or just some taxpayers. However, you should be prepared to implement these strategies if tax rates go up significantly.
Having given financial literacy presentations to children in our community, I found the recent survey results published by the AICPA (American Institute of Certified Public Accountants) dismaying. According to the survey conducted by Harris Interactive, three in 10 parents never talk to their children about money, or have only had one big talk with their children regarding the subject.
Just 13% of the parents surveyed talked daily to their children regarding financial matters. Instead, they spent time talking to their children about good manners, good eating habits, getting good grades, and the dangers of drugs and alcohol.
While I don’t disagree that those topics are important, I would argue that speaking to children about good personal financial habits is equally as important. And I’m not alone. Federal Reserve Chairman Ben Bernanke was quoted as saying early financial education is important for individual well-being and also the economic health of the United States. Think about how you yourself learned these skills. Was it the hard way or were you fortunate enough to learn these skills at a young age?
Since surveys show that parents, not teachers, have the greatest influence on a child’s financial literacy, parents should start having talks about financial habits as soon as a child is able to express a want. Here are some helpful suggestions: make sure you speak about financial habits at their level. Help them understand how to save birthday money or allowance money to pay for toys and other items they want. It has to be something they care about (trust me, hearing about saving for college at the ripe old age of 7 doesn’t mean much). Repeat these talks often and make them a part of daily life. Share with your children about how you are saving for a family vacation, a new car and how that might affect the family budget.
Some great websites regarding financial literacy are 360 financialliterary.org and feedthepig.org. I encourage you to check them out.
I recently came across an article on yahoo news, which left me flabbergasted. It explained that one home in Florida was the recipient of more than $1 million in refunds by filing 741 false income tax returns. This is a whole different level of tax fraud that goes way beyond fibbing on charitable donations or not reporting some cash income. 
This is stealing identities at an unprecedented clip. Some of the identities stolen were children and dead people and others innocent, unsuspecting citizens. In total, the Inspector General’s office found that in Miami, Florida alone, 75,000 bogus returns were submitted with the perpetrators receiving $281 million in refunds.
This article left me with two thoughts:
One – why can’t the IRS catch these thieves before they give out millions of dollars in false refunds when they are supposed to have sophisticated computers that match up all sorts of income data. Why can’t they do this with social security numbers?
Second – it left me with a sense of vulnerability that my identity could be stolen!
I did a quick Google search to find some pointers on how to protect myself and found that they were not too enlightening. You have to protect your social security number, check your credit reports often, shred all documents containing personal information, and put a halt to pre-approved credit offers. There are also many websites dedicated to this idea for a fee that may be worthwhile if you are extra paranoid, but I haven’t reached that level yet.
