MARIELA RUIZ, CPA, PLLC

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Accounting for Nonprofits: Unique Considerations and Reporting Requirements

February 9, 2024 / / 0 Comments

Nonprofit organizations play a crucial role in addressing social issues and making a positive impact on our communities. However, when it comes to financial management, nonprofits face unique considerations and reporting requirements that set them apart from for-profit businesses. Proper accounting practices are essential for nonprofits to demonstrate transparency, accountability, and maintain the trust of their donors and stakeholders. In this blog post, we will explore the distinct aspects of accounting for nonprofits and shed light on the specific reporting requirements they must adhere to.

Classification of Funds & Compliance with Reporting Requirements

One of the key differences in accounting for nonprofits lies in the classification of funds. Nonprofits often receive contributions that are restricted for a specific purpose, such as a capital campaign or program funding. These funds must be carefully tracked and reported separately from unrestricted funds. Nonprofits must also consider the treatment of in-kind donations, which are non-cash contributions like services or goods. While these donations can be valuable, they require specific accounting treatment to reflect their fair value accurately.

Another crucial aspect of nonprofit accounting is compliance with reporting requirements. Nonprofits are subject to various regulations, including filing annual reports with the appropriate government agencies and providing financial statements to donors and the public. Additionally, depending on the size of the organization and the amount of funding received, nonprofits may need to undergo independent financial audits. These audits provide an objective evaluation of the organization’s financial statements, enhancing transparency and accountability.

Related: “Best Bookkeeping and Accounting Practices for the Success of Your Business”

Revenue Recognition

Nonprofit organizations must also pay attention to their revenue recognition practices. Unlike for-profit entities that primarily focus on revenue generation, nonprofits rely heavily on contributions and grants. When recording these funds, nonprofits need to determine whether they should be recognized as revenue immediately or over a period of time. This consideration ensures that the financial statements accurately reflect the organization’s financial health and performance.

Related: “Tips For Keeping Accurate and Organized Financial Records”

Conclusion

At Mariela Ruiz, CPA, PLLC, we understand the unique accounting challenges nonprofits face and are here to help. Our experienced team has the expertise and knowledge to navigate the complexities of nonprofit accounting and reporting requirements. Whether you need assistance with fund classification, compliance, revenue recognition, or any other accounting matter, we are committed to providing tailored solutions to meet your organization’s needs. Contact us today at (956) 997-0067 or visit our website mruiz-cpa.com to learn more about our services and how we can support your nonprofit’s financial success.

Accounting Mistakes That Could Harm Your Small Business

May 1, 2023 / / 0 Comments

While large businesses may have the resources to bounce back from financial blunders, small businesses, on the other hand, may not have that cushion. For entrepreneurs and small businesses looking to keep their cash flow steady, there are some steps they can’t just skip trying to make the leap. In this blog post, we will discuss some of the most common mistakes that can sink and destroy small businesses.

No Rainy-Day Fund

Failing to save for emergencies is one of the biggest financial mistakes that even the savviest business owners go wrong with their small business financial management. A rule of thumb is to have at least six months of running business expense as your rainy-day fund to avoid any financial shortcomings. The last COVID-19 pandemic did a number on many high-profile companies in the US, and this is a case in point on the importance of saving for emergencies and planning for the unexpected.

Mismanaged Taxes

Going for DIY taxes software to quickly cross off your to-do list can simply lead to costly tax issues. Managing your business taxes is an entirely different ball game than managing your personal ones. You need an expert well-versed in local and business laws to help you with your taxes. As a small business owner, you already have a lot on your plate, which is why hiring a tax expert can be a smart investment for your small business.

Being Oblivious to Fraud

Small business owners often wear many different hats and accounting might be one of their skills. While it’s a good thing that you’re able to handle your small business finances on your own, there is a risk of failing to catch the signs of fraud. Specialized accountants like forensic accountants have keen minds and it’s their job to ensure your business activities are legitimate and everything is in order. In cases of fraud detection, we believe that one can never be too careful. Hiring an accountant will minimize the risk for you.

Related: Learn more about how forensic accounting can save your business from fraud here.

Starting a Business without the Backup of an Accountant

Having your business see the light of the day is a big step. However, 20% of small businesses fail in their first year and being one of them is the last thing you want. That shows the importance of having a good business plan and the backup of an experienced accountant. No business can survive without a solid long-term plan and a vision to execute it.

An accountant can assist you with market forecasting and analyze the current situation to devise a plan for your business’s future. A seasoned accountant can help you put your business plan together and be your key success as you move forward.

Related: Learn more about why it’s essential to hire an accountant when starting a business here.

Let MARIELA RUIZ, CPA, PLLC Help You Reach Business Milestones

Small businesses face unique financial challenges that require careful attention and planning. MARIELA RUIZ, CPA, PLLC is here to ensure that you are well-supported and guided at each stage of the creation and development of your small business. Check our website to learn more about our services or simply give us a call at (956) 997-0067 for further assistance.

Bookkeeper vs. Accountant – Which Is Better?

September 23, 2022 / / 0 Comments

Bookkeepers and accountants both support and manage businesses at different stages of the financial cycle. Therefore, it gets hard to distinguish between each process. Do you want to learn about the difference between bookkeeping and accounting? To help you get a better understanding, we have compiled an in-depth analysis that will explain the functional differences between accounting and bookkeeping. Scroll down to read more!

The Key Differences between Accounting and Bookkeeping

Bookkeeping Tasks 

  1. It helps you record and categorize your business’s daily payments and expenses. 
  2. It helps you send customer invoices.
  3. It also helps you to record all the payments received throughout the month and year.
  4. It even helps you conduct bank reconciliation every month.
  5. It helps to prepare books for the accountant.

Related: “What’s the Difference between Accountants and Bookkeepers?”

Accounting Tasks

  1. It helps you perform accurate audits.
  2. It provides you with tax advice.
  3. It even helps you file tax returns and conducts tax planning.
  4. It helps you analyze the cost of operations.
  5. It even helps in advising business owners during their financial decision-making.

Related: “Accounting for Small Business Owners”

The Functions of Bookkeeping and Accounting

Bookkeeping is comprised of:

  1. Posting debits and credits. 
  2. Producing invoices.

Accounting is comprised of:

  1. Analyzing the costs of operations.
  2. Completing income tax returns.

Related: “How to Find a Reliable Accountant”

Which Is Better?

Both bookkeepers and accountants are required for organizing financial records and balancing finances, along with accurate tax filing. Plus, both accounting and bookkeeping play a vital role in contributing to the long-term success of every business. However, you should know that the charges for accounting and bookkeeping may vary accordingly. Lastly, it all depends on your choice, as whichever option you choose, your main concern should be to help your business grow and expand at the same time.

Wrap Up

If you’re looking for professional accounting and bookkeeping services, you can rely on MARIELA RUIZ, CPA, PLLC. We offer professional accounting and bookkeeping services and support from a team of knowledgeable experts in Mission, TX. Check our website to learn more about our services, or simply give us a call at (956) 997-0067 for further assistance.

How Accountants Can Help You Make the Leap from Good to Great

February 18, 2022 / / 0 Comments

Behind every successful business is a great accountant – that is one of the key reasons why small companies become great.

Being a business owner is a huge job with many facets, since running a business involves so many important challenges and you are responsible for them all. But skilled accountants can lighten your load by taking responsibility for a few of these challenges based on their deep knowledge of tax loopholes, deductions, and government subsidies.

In this month’s post, we’ll show you exactly how the work of an accountant supports the long-term growth and success of your business.

What Do Accountants Do?

To begin with, we’d like to bring to your attention that there are many types of accountants, and each accountant can specialize in a particular area. However, public accountants might be the most critical financial consultants for business accounting. Public accountants often work independently and may contract with companies. Not only will they improve financial processes and produce reports and data, but they will also advise you on planning strategies, helping you with tax preparation, and other financial planning.

Is an Accountant Able to Transform Your Business From Good to Great?

While some companies settle for good results, there are other companies in the same industry and with the same opportunities that manage to make the leap from good to great. You may wonder how that is possible, and if so, how? The answer is figuring out if your business needs accountants, then handing over your financial tasks to them and having confidence in them. You heard it right!

Accountants can do an amazing job in improving business efficiency and saving money. An experienced accountant strives to give you all the information you need to make competent and effective business decisions.

Here are some of the specific services provided by a masterful accountant:

  • Advice and Assistance in Selecting a Business Entity

You have to work extensively with an accountant before any official registering of your business, because every decision you make early on will have a huge impact on the future potential of your company. Therefore, getting all the information you can get is crucial to making the right choices.

  • Create and Maintain Cash Flow Projections

A healthy cash flow is essential for a healthy business. That’s exactly what a masterful accountant will do. They will help you assess your cash flow and take control of it by studying your business and keeping you up-to-date about your business budget.

A great accountant will provide you with neat weekly and monthly budget reports so you can know how the budget is flowing in and out of your business.

  • Offer Financial Advice

In the business world, there is nothing better than an experienced accountant to advise you. When working with clients and jumping in to make big purchases or start new marketing campaigns, it’s best to consult with an accountant who can analyze the risks and benefits of your options.

Final Thoughts

The leaders of great companies get the right people on the bus and put them in the right seats; then they figure out where to drive it. Be sure to work with the best accountant in your city. MARIELA RUIZ, CPA, PLLC offers the most professional accounting services in Mission, TX. Our experienced accountants will cover all of those exhausting tasks and accompany you through your business journey. Please call us at (956) 997-0067 to learn more information about our working hours or visit our website for more information.

What is Solar Power Tax Credit?

March 24, 2021 / / 0 Comments

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

February 25, 2021 / / 0 Comments

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!

Visit our website here.

What You Need to Know for the 2021 Tax Season

December 21, 2020 / / 0 Comments

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?

August 26, 2020 / / 0 Comments

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

June 29, 2020 / / 0 Comments

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?

January 24, 2020 / / 0 Comments

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.

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