MARIELA RUIZ, CPA, PLLC

Helping Individuals and Businesses Financially Thrive.

Tag: accountant

What is Solar Power Tax Credit?

Green energy sources have many benefits to you and the world, including a federal tax credit or home and business owners who have had solar power panels installed before December 31. The federal solar tax credit, known as the investment tax credit (ITC), is much more profitable than a deduction. However, for taxpayers to get the full benefit, the world needs a sufficient income. Here are what tax professionals should know about ITC.

Introduction

When the government provides a tax incentive, it is happy about it, especially when local and state enticements convoy it. According to the Environmental Protection Agency, the government passed the ITC as part of the Energy Policy Act, which has been extended four times since its initial passage. The credit is now at 26 percent for the next two years so that eligible taxpayers can have a dollar-for-dollar decrease in the amount of income tax they owe. Taxpayers are looking forward to 2023 because the tax credit will drop to 22 percent. Renewable portfolio standards are in some states where utility companies give clients a specified minimum amount of electricity from solar. Utility companies buy energy made by a solar customer’s house. The value of solar renewable energy certificates will vary by state, but this is an example of taxpayer liberation.

How Does It Work?

            Solar power panels remain to provide people with prospective savings after filing their taxes. Solar energy creates opportunities to resell excess energy, evade power outages when harmonizing with a battery, and charge electric cars. The sun’s rays shine on the solar panels resulting in generating electricity that gives homeowners lower electric bills. The energy is completely free to the owner once the payment to the solar company ends. Also, solar power works all day, even when it is raining or dark overcast. Utility companies can offer the ability to sell back electricity to the grid for a credit on a homeowner’s electric bill. The utility companies can credit a home’s electric account.

The government is devoted to solar power that many states and cities have recognized property tax exemptions on solar. The solar panel installation calculates property tax fees giving homeowners and companies more money.

Conclusion

Solar energy panels have many benefits for businesses and homeowners. However, it could be challenging to understand everything about the tax deduction that comes with installation. You can count on Mariela Ruiz, CPA, PLLC, to help you with your taxes. We can give you tax advice for any situation you are in and find a financial solution that benefits you. We want to save you money by providing attentive and well-strategized plans, so call us at (956) 997-0067 today!

Common Itemized Deductions

When you are preparing to file your taxes, don’t forget about itemized deductions. These are individual tax deductions you can take in lieu of the standard deduction. Making the decision to itemize could potentially save you more money on taxes. To learn more about the types of deductions you can itemize, continue reading our blog.

Charitable Deductions

Did you contribute to a charity in the past year? If you made donations to a qualifying organization, you can itemize and therefore, lower your tax bill. It’s important to keep a record of donations, which can include everything from bank records to receipts. Make sure that you have the name of the organization, the amount donated, and the date. The more information you have, the more accurate your tax form will be.

Medical and Dental Expenses

Medical expenses are deductible as itemized deductions, but in a very limited way. You can only deduct the amount of medical expenses that exceed 10% of your AGI or 7.5% if you’re over 65. You and your family members that have qualifying medical expenses can take advantage of these deductions. Examples include: doctor’s fees, co-pays, prescriptions, transportation to a medical facility, and more.

Work-Related Education Expenses

If you choose to itemize work-related education expenses, you may be able to deduct these expenses from your taxes. To claim this deduction, costs must be related to maintaining or improving job skills and required by your employer. These costs include tuition, books, lab fees, travel, etc. It’s also important to note that you can only deduct these expenses if they exceed 2% of your adjusted gross income.

Conclusion

If you have questions about itemized deductions for your 2020 taxes, then call MARIELA RUIZ, CPA, PLLC. We have the tax solutions you need to get more out of your tax return. From income tax preparation to strategic tax planning, contact our advisors for more details on how you can save money!

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What You Need to Know for the 2021 Tax Season

Many will agree that 2020 has been a year of unique challenges but 2021 is just right around the corner! With that being said, below we discuss some things to keep in mind as we approach 2021 and the upcoming tax season.

Tax Day is Thursday April 15th, 2021

This is the date you must file you taxes before! Most can take the standard deduction which has increased from this year to $12,400 for single filers and $24,800 for married couples filing jointly. You may also itemize your deductions which is a little bit more painstaking, however is worth it if your itemized deductions exceed your standard deduction.

Stimulus Checks Aren’t Taxable

The CARES Act was instituted near the beginning of the COVID-19 pandemic and gave many citizens a onetime payment of $1200. These payments will not count as taxable income in the upcoming year which is great news for most tax payers! You can think of it as a kind of advanced refund you would have received as part of your 2021 tax refund.

Unemployment Income is Taxable

The pandemic has caused much of the country to shut down for extended periods of time, leaving many Americans jobless through no fault of their own. If you were one of the millions of Americans who received unemployment benefits in 2020, you have to pay taxes on that income. If you opted to defer taxes on your unemployment payments before you received them then you will need to save for the taxes that will be due when you file, or pay estimated quarterly taxes to stay ahead.

Final Thoughts

As always, consult your tax professional to get the most out of your taxes in 2021 and speak with someone who can help you in your specific financial situation. Mariela Ruiz, CPA, PLLC is here to help individuals and business owners in the Mission, TX community with their taxes and wishes you all a prosperous 2021!

Should You File Your Taxes Jointly or Separately?

For married couples who live together and share finances, tax season can bring with it a lot of questions about how you should file and why. In this month’s blog post we briefly dive into what couples need to know before filing their taxes and how they can determine if they should file jointly or separately.

Married Filing Jointly

Your filing status determines your tax rate and the amount of deductions you can qualify for. For most couples filing jointly is the best option for several reasons. Basically, married couples can continue to qualify for a lower tax rate despite having a higher taxable combined income. This tax break in addition to one of the largest standard deductions offered by the IRS makes filing jointly the best option for the vast majority of married couples.

Married Filing Separately

The circumstances in which a married couple would benefit more from filing separately are far and few between. They mostly include situations where one spouse has outstanding deferred debt that needs to be collected promptly. Examples can include having large amounts of student debt or costly outstanding medical bills. Filing separately is also the best option for couples who are expecting to get divorced within the year.

Final Thoughts

If you’re still unsure of which status makes the most sense for you, call on a highly qualified and experienced CPA. One tax service does not fit all so it’s important to turn to a professional who is committed to finding the absolute best option for you and your family. Contact the experts here for a variety of services including forensic accounting, tax services, financial consulting, bookkeeping, and much more.

The CPA: Your Litigation Support Professional

There are a wide variety of types of court cases that can require the additional support of a CPA. Oftentimes in civil and business litigation, courts and powerful legal teams will require a CPA to weigh in based on their expertise in finances and accounting. Follow along with this blog to learn about the types of cases they typically work on and how having a CPA on your legal team can help you get the case results you seek.

Forensic Accounting

While forensic accounting may sound like a job reserved for detectives or the secret service, it is broad term used when a certified accountant applies the theories and principles of accounting in a legal setting. A CPA hired for litigation support purposes will review bank statements, receipts, time sheets, and any other necessary financial documents involving the case.

Business and Civil Litigation

Too often complex accounting, appraising, and tax issues find their way into business litigation. A certified public accountant with litigation support experience most often work either for or against a business to prove or disprove alleged disputes. For example, forensic accounting can either make or break cases involving bankruptcy, fraud, data analysis, damage evaluations and more.

In addition to business litigation, civil litigation cases will often require the additional support and expertise of a CPA as well. Most often their role in court will be as a consultant, but there are times when they are asked to stand as an expert witness too. Civil cases that could benefit from a CPA’s support can include those involving marital settlements, taxes, valuations and more.

Conclusion

When litigation is simply unavoidable, ensure that you have a solid legal team working in your favor. A CPA working to support your case will able to provide a judge and jury with indisputable evidence and facts that less qualified individuals wouldn’t have been able to uncover. For a CPA who’s highly experienced in providing top notch litigation support and forensic accounting services, contact us today!

What is a PLLC and What Do They Do?

Chances are you have seen the letters LLC posted after a company’s name, but do you know what it means? It’s important to first understand what a limited liability company (LLC) is and what it does in order to understand what a professional limited liability company (PLLC) is. Follow along with this blog to find out the difference between the two, who can form these groups, and why they do.

LLC vs PLLC

An LLC is a term used in the U.S. to describe a type of hybrid corporate structure used by some professional companies. These companies are owned by multiple partners, or members, which work to ultimately combine the liability protections of a corporation with the tax benefits of a partnership. The most notable difference here between the two is that unlike a PLLC, virtually anyone can become a member of an LLC.

A PLLC is essentially the same as an LLC but is owned and operated by licensed members of the same profession who will only be performing services specific to their profession. Some states require these professionals to form PLLC’s rather than standard LLC’s because they are licensed specialists. A major difference between these two types of companies is that members of a PLLC are personally liable for their own malpractice, should it occur, but not each other’s.

Who can form a PLLC?

In the states where PLLC’s are required to do business, groups are generally made up of lawyers, doctors, engineers, accountants, and other licensed professionals. This partnership arrangement requires documents to be filed with and approved by the state the business hopes to operate in. Additionally, each of the members will need to have their licenses validated by the state before approval.

Benefits of a PLLC

There are some pretty notable benefits in establishing an LLC or PLLC rather than a corporation. The main benefits of PLLCs are their limits on liability and the tax perks. More specifically, their limitations on liability for owner’s taxation and the availability of pass-through taxation. Pass-through taxation enforces that PLLC’s are the responsible parties at tax time, and not the owners. Additionally, these individuals will not be personally liable for the business’ debts or any lawsuits against the business.

Conclusion

At the end of the day, only licensed professionals of the same profession can establish PLLC’s. Though it’s important to keep in mind that each state has their own list of rules and regulations about PLLC’s and the steps that must be taken to establish and operate one. Ultimately, these two types of companies are much easier and cheaper to form than traditional corporations are.

Deciding if you should choose to do business with a member of a PLLC is a no brainer. Professionals who are members of PLLC’s will most likely be very serious licensed professionals who are supported by a group of other educated professionals. For a top notch certified public accountant who is also a PLLC member, call on the offices of Mariela Ruiz, CPA, PLLC.

How to Find a Reliable Accountant

When it comes to our finances, there is no such thing as too much organization and attention to detail. The notion of having our money taken care of and kept in the right places can do wonders for alleviating our stress and allow us peace of mind. One of the best ways to ensure our financial security is by hiring a professional. The only tricky part of bringing in a certified personal accountant (CPA) is finding one you can trust with your livelihood. Keep reading to learn some tips on how to spot a qualified CPA and help you keep the money rolling in smoothly.

They Are Always Communicating With You:

One of the most vital aspects to a good CPA is their communication skills. If your accountant isn’t keeping you in the loop about what’s going on with your finances, that’s not a great sign it will be a smooth working relationship. The ability to articulate information to you about the state of any aspects of your portfolio, from your assets to your investments or liabilities, is paramount to your future and the reason CPA’s are hired in the first place.

They Plan Your Finances Throughout The Entire Year:

While this statement seems to be a no-brainer, you would be surprised to find out how many accountants struggle to focus on your long term futures and securities as opposed to more immediate financial management strategies. One of the best upsides to having a CPA you can trust should be the knowledge that they are spending time planning your financial strategy throughout the entire fiscal year or even longer, as opposed to advising you on week to week transactions. Keeping an eye on the future while managing the present is always the best way to grow your personal wealth, so finding a CPA that understands that can be crucial.

They Give You Tips On How To Budget:

Hiring a personal accountant that cares more about coming in, doing the basic necessities of their job each day and then clocking out will never bring you the returns that you are looking for. It is often hard to see from the outside if your accountant is going above and beyond or not, but one of the best indicators of this is the advice they give you and the regularity with which they give it. Daily, weekly and monthly budgeting tips, while not a requirement, should be expected from any CPA. The more any client knows about their finances, the better it will work out in the long term. Whether it’s merely calling to advise against a trend of purchases they see you making or providing a helpful way to save money in an area they see you are spending too much, a CPA is your financial lifeline, which means they should always be there to have your back on any financial matter.

They Don’t Mind Explaining Anything To You:

To most people, this seems like a relatively simple and obvious task for a CPA, because it merely requires them to not find your lack of knowledge about intricate financial matter frustrating. However, it is shocking how many CPA’s believe relative autonomy is the way to go when it comes to your money, which is a relatively absurd notion. While it’s true that any CPA should have deeper knowledge of your financial situation, there needs to be a consistent dialogue between them and their client that centers around informing them as much as they can about any financial matter. The more a client knows, the better they can work with their CPA to ensure they flourish when it comes to short-term and long-term financial goals.

Conclusion:

There are so many factors that go into choosing the right CPA for you. It’s important to feel safe and secure leaving your finances in another person’s hands, so why not know you are getting the best person for the job right from the start? With Mariela Ruiz, CPA, there’s nothing more important than the financial success of clients, so schedule a consultation today and take that first step towards a more prosperous future!

What’s the Difference between Accountants and Bookkeepers?

When it comes to accounting and bookkeeping, there are many differences. While these careers have many similarities and common goals, they are there to support your business in very different ways and for different parts of its business operations. Simply put, bookkeeping is more transactional and administrative while accounting is there to give you proper business insights based on bookkeeping information. We understand that you might not know the differences between these careers; we hope the following blog will give you all the information you need.

Accounting

As previously stated, accountants take care of the big picture   by providing you with business insights based on bookkeeping information. An accountant will process all the financial information that was brought to you by the bookkeeper or business owner. From there, he or she will create a financial model using that information. Accountants’ analysis should inform you on business trends and growth opportunities.

Accounting Duties:

  • Analyzing costs of operations
  • Aiding in the understanding of the impact of financial decisions
  • Completing income tax returns
  • Preparing and adjusting data entries
  • Preparing company financial statements

Bookkeeping

Bookkeepers, on the other hand, will play more of an administrative role in the business. They are more focused on recording financial transactions.  This will help build a business to be financially successful. The bookkeeper is on the ground floor, managing your daily transactions and looking out for changes to the organization or significant financial events that should be addressed immediately.

Bookkeeper Duties:

  • Completing payroll
  • Maintaining and balancing subsidiaries, general ledgers, and historical accounts
  • Posting debits and credits
  • Producing invoices
  • Recording financial transactions

Businesses will succeed more often than not when they have a complete picture of their finances, and bookkeepers and accountants each look at a business’ numbers through different lenses. In order to receive the best advice for your business, it is essential to have both an accountant and bookkeeper by your side. If you are looking for someone you can trust with your bookkeeping or accounting services, you can count on MARIELA RUIZ, CPA, PLLC. No matter what you are looking for, we have got you covered.