(775) 786-6141
It has been known for quite some time that women make up most of the purchasing decision power in households but their increasing presence in the workforce is becoming nearly as significant. 
According to a recent post by XYZ University, these are a few of their interesting statistics:
Even from only 10 years ago, these are huge changes and these trends do not show any indication of reversing. This impacts today’s businesses in two major areas: employees and customers.
Having more female employees brings new skills as well as challenges to the table. Many studies have shown that women tend to have a management style that is more consensual and inclusive which can be an advantage with today’s increasing social and crowd sourcing business methods. Also with more women working, maternity leave and child care, for example, will become bigger issues that companies must face and deal with. Further with more women in leadership roles, more men will take on more responsibilities at home leaving them less willing to sacrifice family for work.
As more women take on leadership roles and more men take on larger family roles, the change in these gender roles may change who has been the dominant purchasing power of households. Additionally, the upwardly mobile urban single woman may become a significant customer in areas of serious investments such as homes and travel.
A few weeks ago, I, along with the rest of the world, heard that Hostess and their unions could not come to a new personnel agreement and would be going bankrupt. The television news stations all started blasting their sensational headline that Twinkies were going the way of the McDonald’s Arch Deluxe, Crystal Pepsi, and the Delorean and would no longer be made. The news showed clips of people in grocery stores with their carts full of all sorts of Hostess products for fear that they would never be able to enjoy them again. 
The next morning I went to my local convenience store to get a paper and the Hostess stand was empty. They were sold out of Twinkies, Ding Dongs, Wonder Bread, Donettes and Sno Balls!
It makes for a great headline that an iconic product like Twinkies will soon be defunct, but this distorts what will happen after bankruptcy liquidation. As evidenced by the quick sellouts of Twinkies, this is still a product that is very much valued and in demand. I am not aware of all of Hostess’ internal financial struggles, but I’m sure Twinkies can be profitable and that there’s at least a few other companies in the world who believe the same as I do and have the financial clout to do so. During bankruptcy liquidation, the trustee will try to sell all the brands and facilities to get the most value to pay Hostess’ creditors. 
Some person or group will buy the Twinkies brand and recipe and I’m sure they will start producing and selling millions of Twinkies across the United States. The shoppers who filled their carts will have alleviated their short term cravings, but for the rest of us, rest assured. Twinkies will be populating the grocery shelves again in no time!
Leslie C. Daane, CPA, Managing Director of Barnard Vogler & Co. in Reno, NV has been certified as an Accredited Estate Planner® (AEP®) by the National Association of Estate Planners and Councils.
The Accredited Estate Planner® designation is awarded by the National Association of Estate Planners & Councils (NAEPC) to recognize estate planning professionals who meet stringent requirements of experience, knowledge, education, professional reputation and character.
NAEPC is a national organization of professional estate planners and affiliated local Estate Planning Councils focused on establishing and monitoring the highest professional and educational standards.
Barnard Vogler & Co. is one of Reno’s oldest and most respected accounting firms with over four decades of experience providing quality service to a wide variety of clients. For more information or to contact Leslie, please call us at (775) 786-6141 or visit our website at bvcocpas.com.
In recent years with the uncertainty in the economy and Baby Boomers coming into retirement age, Social Security has been a hot topic. 
What is there not to worry about!? Will it be there when you are ready to retire? Should you take it early? Should you postpone benefits?
A recent article by Dan Kadlec for Time showed that the number of retirees taking early social security has fallen for the second consecutive year to a 35 year low. According to Kadlec, this is possibly a return to the downward trend that was broken up by the recession, which caused many workers to opt for early retirement in frustration over their inability to find work. Social security can be taken as early as 62 with reduced payments, but benefits can by maximized by delaying payouts to age 70. Social security plays a varying role in retirement planning. For some it is supplemental to 401K and savings, but for others, it may be their only source of income.
In May of 2012, the Social Security Administration announced that the online version of the Social Security Statement was now available on their website at: http://www.ssa.gov/mystatement/. You have to jump through a few security hoops to get your statement, but it is there for your convenience. The statement provides estimates for retirement and disability plus gives the user an opportunity to verify that their income has been properly reported. Setting up an account also helps you with information about qualifying for benefits and allows you to apply for benefits online when you are ready to take that step.
Not quite ready to retire, but looking for some planning guidelines? 
The Social Security Administration also offers a variety of benefit calculators and tools for estimating retirement benefits.
Even if Social Security is only a supplemental part of your retirement plan, it is important to keep tabs on your account. Keeping the full picture of your retirement in view will give you a clear idea of what to expect.
Having lived in Nevada for the majority of my adulthood, I have long been acquainted with tipping. It has gotten to the point where I feel guilty for not putting a dollar in the tip jar at Starbucks for a $2 coffee or at my local sandwich shop. While living in Las Vegas I heard stories of people making thousands of dollars a night as a cocktail waitress or doorman at a club and valet drivers earning six figures a year. 
Since these tips were usually in the form of cash, I presumed that a lot of income wasn’t being reported to the IRS. I knew that the casino industry had agreements in place with the IRS for years where a fixed amount of tips per hour was reported on their W2s. I’m sure more tip income was earned, but since cash tips are so hard to trace the IRS needed some piece of the pie without being overly burdened.
Recently, my presumption on tip earners not claiming all their tips has come true. According to a Las Vegas Review Journal article, a club co owner and some of his employees recently got busted for not claiming all their tips as income. This particular club owner didn’t pay $141,306 in taxes on $403,732 of tip income in just two years! Three hosts and a doorman plead also plead guilty, although the article doesn’t say what they earned. These employees didn’t have any sort of elaborate scheme; they just didn’t report hundreds of thousands of dollars to the IRS from their tips!
I don’t know this guy personally, but I’m sure he wasn’t living a modest lifestyle and driving around town in a Hyundai. The IRS can easily construct a taxpayer’s income. If someone is driving around in a Porsche, living in a mansion with gardeners and pool guys, and wearing fancy jewelry, the IRS can figure out how much all that costs and calculate how much income would be needed to facilitate this lifestyle. Not being truthful to the IRS is an easy way to land in jail. Just ask Al Capone who got busted for tax evasion!
A recent article published in the New York Times, highlights how Apple is taking advantage of Nevada’s 0% corporate tax rate.
Apple has created a subsidiary for their $100 billion in cash that invests in bonds and other low risk financial instruments. All the interest earned, $2.5 billion since 2006, has been shielded from state income tax because it is a Nevada subsidiary. By creating this Nevada subsidiary, Apple has saved $221 million by not having to pay California’s onerous 8.84% corporate tax. There are many other technology corporations headquartered in California that have billions in cash that could do the same as Apple. Cisco Systems Inc. has over $35 billion in investments, Google $34 billion, and Intel $5 billion just to name a few. These corporations could save millions of dollars each year if they would just relocate some employees to Nevada a couple hundred miles away and shield their investment income from California state tax.
I have always lamented over how Nevada doesn’t get more businesses to relocate here when there is no corporate and personal income tax as well as low property taxes compared to say Texas, another state with no income tax. More motivation should be that home prices are significantly lower in all parts of Nevada compared to California. Sure, our school systems have extremely low graduation rates, but when it comes to saving millions of dollars, money trumps all. Corporate CEOs and their employees should gladly move to our great state at the prospect of saving millions of dollars personally and for their businesses.
Just yesterday, June 27th, 2012, Apple announced they are relocating to Reno their servers for cloud computing and ITunes, and their business and purchasing center. 
I’m sure tax savings, in addition to savings from cheaper land, labor and electricity, was a factor in this decision. I’m guessing Apple’s income from ITunes and portions of their business is now being sourced in Nevada, potentially saving millions a year in future taxes. Let’s hope this is the start of a trend of companies wising up to the high costs of doing business in California!
So you think you have financial issues? Just listen to what Nina Olson, National Taxpayer Advocate, has to say about the IRS. In her annual report to Congress she suggested that the IRS’s increasing workload and declining resources are the most serious problems facing taxpayers. So how does she connect the dots to conclude that this is a “taxpayer” problem?
She reasons that the resulting inadequate taxpayer service, erosion of taxpayer rights and reduced taxpayer compliance are causing harm to the taxpayers. That’s how! I don’t know. Seems to me like an IRS problem rather than a taxpayer problem. But, then again, doesn’t the taxpayer always get stuck with the tab?
But wait. Maybe there is a solution that doesn’t stick the taxpayer with the bill. It turns out that increasing funding for the IRS might actually be a good investment. Current inadequate funding contributes to many of the problems facing today’s IRS. When the federal individual income tax was first enacted in 1913, it applied only to high-income taxpayers, which totaled about 358,000 people. That total today stands at 141.2 million with one tax return for about every two people in the United States. And believe me, the returns are a lot more complicated now than they were almost 100 years ago.
It seems that as the collection agency for the U.S. government, the IRS does a pretty good job. On a budget of $12.1 billion, the IRS collected $2.42 trillion in fiscal year 2011. That is to say that for every $1 that Congress appropriated for the IRS, it collected about $200. Now with the current “tax gap” at about 15%, every household is paying an annual “noncompliance surtax” of about $2,700 to enable the federal government to raise the same amount of money it would have collected if all taxpayers had reported their income and paid their taxes in full.
While I doubt that appropriating an extra $1 would produce the same collection rate when applied to the last 15% of noncompliance, I’ll bet it would provide an attractive return on the investment.
Have you ever wondered just how much you pay in taxes over a year? Not just big tax items like income and property taxes, but even the taxes on the gas you pump into your car to the taxes on your utility bill?
Maybe you haven’t because you’re not obsessed with taxes like us CPAs, but if you are curious, the American Institute of CPAs has come out with a nifty tax calculator that is designed to give U.S. taxpayers a complete picture of their estimated total federal, state, and local tax obligation.
To give you fair warning, you will not be able to just plug in a few numbers and get your calculation. For the calculation to be accurate, you will need your prior year’s tax return, your estimated income, and a good idea of what you spend a 
month on expenses like gasoline, cable, cell phone, electric and gas, alcohol, clothing, etc. With just a click of the button you will be provided with a total estimated annual tax liability and exactly what percentage of your income is paid over to the taxing authorities. If you have a moment – check it out; the results just might shock you! http://www.totaltaxinsights.org/Calculator
The calculator is also available on our website – bvcocpas.com, in the resources/links section.
It’s spring time in the Truckee Meadows. The river is running high, the trees are green, and students of all ages are getting spring fever.
With graduation on the horizon, it’s hard not to think about what is coming next. Whether your student is finishing kindergarten, graduating high school, or currently in college, it’s always a wise idea to be thinking about a plan for higher education.
It’s never too late to start saving, but just like planning for retirement, the earlier the better. These days there are a lot of options available for consideration including Section 529 plans, education savings bonds, Coverdell education savings accounts, and education loans. As the cost of college continues to increase it is important to be prepared. According to the Project on Student Debt, two-thirds of college seniors in the class of 2010 graduated with loans, and the average debt carried was $25,250.
The cost of college continues to be on the rise. Make sure you look into all your options for investing in your child’s future as well as for deducting your current costs.
If your student is already in college or will be starting this year, make sure your CPA is making the most of education deductions and credits. For those that meet the requirements, student loan interest can be deductible on a qualified education loan. Taxpayers may also be able to claim a deduction for qualified tuition and fees. Education credits include the American Opportunity Tax Credit and the Lifetime Learning Credit . These deductions and credits should be coordinated to maximize the tax benefit. While taking this all into account, it is also important to review the dependency exemption and determine when it is the optimum time for your child to no longer be claimed as a dependent.
This year could be the last year before the Bush tax cuts expire and the tax rates increase. If these cuts expire, single people and married people alike will have higher taxes. A single person with taxable income making $100,000 will have a tax bill of $23,805 and an average tax rate of 23.8% come 2013 when these changes go into effect.
Giving the federal government 23.8% of your income, or over 30% when combined with FICA may seem like a lot, so let’s go back in time to compare:
Take a look at a decade (the 1970’s) when Stairway to Heaven was blasting on the radio and Don Vito Corleone was the most popular Halloween costume. Adjusting for inflation, $100,000 today equals about $41,800 in 1972. In 1972, the tax bill for a single person making $41,800 would have been $8,261 or 20%. We’ve all heard about the exorbitant tax rates of the past so this is a little surprising that the tax, adjusted for inflation, is actually lower. In analyzing the tax rates, adjusted for inflation, tax rates for single people don’t top out at 40% until $118,095 in income. Then rates start to skyrocket. At $171,774 the tax rate jumps to 50%, at $236,189 to 60%, and above $536,793 to 70%!
High taxes of the past were brought to my attention by the television series Mad Men, about an advertising agency company based in the 1960’s. There is an opening scene where the Head of Television is talking about getting a raise. He ends up saying he never wants to make more than $36,000 because then your just working for “them”. “Them” is the IRS and back in 1961 if you made between $36,000-$40,000, you were paying 53% in taxes. Adjusting for inflation that is equivalent to someone making a little over $270,000 in todays dollars. If the Head of Television was talking about a raise today, that conversation never would have happened, as he would be paying 33% in taxes and max out at 35%.
In 2013 when the Bush cuts expire that maximum is still only 39.6%. Can you imagine what the partners of the agency were paying in 1961? The maximum tax bracket in 1961 was 91%. For every dollar in income above $200,000 (in 1961 dollars) they would only be taking home 9 cents! So if taxes go up in 2013, just remember that taxes could be worse.
