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What Taxpayers Should Know about Penalty Relief

Meredith L. Anderson, CPA, MST, EA

July 23, 2018

The following article was published by the IRS.

Taxpayers who make an effort to comply with the law, but are unable to meet their tax obligations due to circumstances beyond their control, may qualify for relief from penalties.

After receiving a notice stating the IRS assessed a penalty, taxpayers should check that the information in the notice is correct. Those who can resolve an issue in their notice may get relief from certain penalties, which include failing to:

  • File a tax return
  • Pay on time
  • Deposit certain taxes as required

The IRS offers the following types of penalty relief:

Reasonable cause
This relief is based on all the facts and circumstances in a taxpayer’s situation. The IRS will consider this relief when the taxpayer can show they tried to meet their obligations, but were unable to do so. Situations when this could happen include a house fire, natural disaster and a death in the immediate family.

Administrative Waiver and First-Time Penalty Abatement
A taxpayer may qualify for relief from certain penalties if he or she:

  • Didn’t previously have to file a return or had no penalties for the three tax years prior to the tax year in which the IRS assessed a penalty.
  • Filed all currently required returns or filed an extension of time to file.
  • Paid, or arranged to pay, any tax due.

Before asking for First Time Abatement relief, taxpayers can request that the IRS first consider the reasonable cause relief provision. This preserves access to the First Time Abatement, which taxpayers may only use every three years.

Statutory Exception
In certain situations, legislation may provide an exception to a penalty. Taxpayers who received incorrect written advice from the IRS may qualify for a statutory exception.

Taxpayers who received a notice or letter saying the IRS didn’t grant the request for penalty relief may use the Penalty Appeal Online Self-help Tool.

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starting a new business

Top 6 Actions to Take When Starting a New Business

Starting a new business is an exciting moment in the life of an entrepreneur. You’re stepping out confidently, relying on your skills, talents and vision to create a livelihood and a legacy. Whether you’re starting a side hustle or laying the groundwork for a large company, it’s essential to go about it the right way.

You will save stress, time and money if you follow these six steps when starting a new business:



1. Write a Business Plan


There is both an internal and external purpose for a business plan. For you and your management team, it’s a roadmap that lays out your goals and how you’re going to get there. For investors and lenders, it’s an indication you have a thought-out strategy and clear objectives for your company. It doesn’t have to be lengthy, but it should include a market and competitor analysis, your operations structure and details on your products and services.



2. Secure the Cash You Need


Businesses need capital. Even if start-up costs are low, there will come a time when you need an injection of cash and your business has a higher likelihood of success if you plan where this will come from ahead of time. Should you get a loan? Should you look to an investor? Do you have your own cash savings you can leverage?



3. Set up Efficient Accounting Practices


It doesn’t matter if you are a one-person business or plan on hiring a whole team – you need efficient accounting practices from day one. Neglecting to keep up your books can cost you both time and money. Our team at Robert L. Coval, CPA can help, and we understand tax law intricacies, making it possible to plan for tax time all year round.



4. Decide on the Right Business Structure


Should you file as an S-Corp or LLC? How do you obtain a federal tax ID? Again, these are questions we can help answer at Robert L. Coval, CPA. Business structure is one of the most critical decisions you’ll make in the early stages and will determine the regulations you need to follow and paperwork you need to file. We help you get your legal ducks in a row.



5. Get the Right Licenses and Permits


What do local authorities require to legally register your business? Licenses and permits ensure you’re operating in line with local regulations and protect you from fines.



6. Start Building Business Credit


Once you have the legalities squared away, make sure you open a business bank account. This can help you begin building the business credit you may need in the future to lease an office space or apply for a loan.


Starting a new business comes with its fair share of challenges, but no accounting question that we can’t answer. Robert L. Coval, CPA is the ideal partner to have on your side as you jump into business ownership. Schedule a free consultation with us and let’s explore how we can help your business on the road to success.

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remote cfo

5 Clear Business Advantages to Hiring a Remote CFO

When your company is growing exponentially, it’s easy to make the business case for hiring a remote CFO. According to, a Chief Financial Officer earns between $177,928 and $473,450 per year, not including benefits and bonuses. Even with significant growth, that’s not a salary the average small business can sustain, especially in the early stages of building a company.


Business owners usually handle the majority of financial tasks, but when drastic growth takes place, it can be difficult and maybe even impossible to keep up. A remote CFO is an ideal balance: you don’t have to pay a full-time, hefty salary, but you also don’t have to spend your own valuable time on financial projections and accounting tasks, an area that might not be in your wheelhouse to begin with.


With a remote CFO on board, your business enjoys these five clear advantages:


1. Improved Cash Flow

One of the top reasons small businesses fail is due to cash flow mismanagement. This is one of the first areas your remote CFO will analyze. Where can your business free up funds? Where are you spending too much, with not enough potential for a profitable return? When business owners are both the financial controller and the day-to-day manager, it’s probably easy to recognize you have a cash flow problem, but sometimes it takes a third party analysis to figure out how to resolve it.


2. Make Informed Business Decisions

Move from, “I think we can,” to “I know we can” with the help of a remote CFO. Don’t assume your financials can withstand a big purchase or a new hire – get assurance and peace of mind you’re making the right move.


3. Enjoy Financial Assistance During Times of Major Change

Are you about to acquire another company? Are you working on a detailed merger? These occurrences often present in-depth financial questions and you can’t find the answers through a quick online search. It’s often where a business owner’s DIY capability ends, but that’s where your remote CFO can step in to handle the details. Change means growth, and growth is good, but from a financial standpoint, it’s essential to ensure it’s healthy growth.


4. Prepare for Tax Time All Year Long

When you realize tax time is on the horizon and there are mountains of paperwork and receipts to locate, you might start to feel overwhelmed. Preparing for tax time isn’t simple when you’re a business owner, but if you have a remote CFO on retainer all year, the burden is no longer on you alone. You don’t have to get involved in tax time details at all. Better yet, your remote CFO does everything they can to make sure you pay as little as possible!


5. Depend on an Experienced Strategy Partner

The best part about a remote CFO: you’re getting more than basic accounting help. You’re able to rely on the time-tested experience of someone who has been there before. With a wealth of financial industry knowledge plus business growth experience gained from thousands of hours helping companies similar to yours, you get granular and high-level strategy feedback, which helps you avoid common pitfalls and ultimately reach your business goals faster.  

Build a consulting and services package tailored to your company’s exact needs. Contact the team at Robert L. Coval, CPA to learn more about our specialized remote CFO services.

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cpa blog businesses and individuals

How a CPA Can Help Businesses and Individuals Find Financial Success

A CPA prepares tax returns, but that’s only a fraction of their capabilities. A CPA can be a versatile asset for any individual or business with the goal of a secure financial future.


On the personal financial front, you may need advice on transferring assets to loved ones, paying less in taxes and planning for a big purchase, like a home. On the business side, you may need guidance on securing loans, hiring new employees or weathering a tax audit. In both settings, depend on your CPA.


If there’s a complicated financial problem in either your personal or professional life, chances are good that a CPA can help. If you simply want to measure and maintain fiscal health, a CPA’s services support those efforts as well.


CPAs Are Highly Qualified Professionals You Can Trust


To gain a CPA license, the candidate is required to earn advanced degrees and pass a battery of tests. Once licensed, they are then required to keep those qualifications up-to-date with continued professional education in highly specialized topics.


In the financial realm, complications abound. Since CPAs are educated and trained in-depth to handle these complications, you can trust that the solutions they bring are authoritative and trustworthy.

CPAs Can Offer a Financial Strategy for Life and Work


Families grow. Businesses grow. In either situation, or if both are happening at the same time, you need a plan.


When you think about forming a financial strategy for your family or your business, doesn’t it make sense to start the discussion with a professional who can go in-depth on your income and taxation picture? Your accounting team at Robert L. Coval, CPA can settle your immediate tax issues and help you plan for years in the future.


At our initial client consultations, we focus on these three questions:


  1. What is your current situation?
  2. Where do you want to be?
  3. How will you get there?


We sit down and examine your entire financial position to help you understand what’s going on right now. Then it’s time to map out your goals. With your present circumstances and future vision in mind, we offer the hand-holding necessary to enable our clients’ success. Together, we find the most beneficial path forward.


Everyone Benefits from a CPA’s Expertise


At our firm, we specialize in helping business owners meet and exceed financial goals, but we always tailor our services to you. Whether you own multiple properties, want to start a business, want to maximize tax deductions or any other scenario, our team is ready to talk. Let’s take the first step towards your end goal today. You work hard to earn your money, and our team at Robert L. Coval, CPA works hard to help you keep as much of it as possible.

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forensic accountant

How Does a Forensic Accountant Help in a Divorce Case?

Divorce is complicated. Two parties are trying to divide property, debts and other assets and they often don’t want to be amicable. Even “simple” divorces are not so simple.

The challenge gets even harder when an intricate financial portfolio is in the picture. How do you divide stock options, deferred compensation, businesses, partnerships, retirement, insurance and other complex assets? More importantly, how do you ensure everything is on the table so that it gets divvied up fairly?

That’s where a forensic accountant comes in.


A Forensic Accountant Helps Your Attorney

Attorneys – even seasoned divorce attorneys – are not financial experts. It may seem unlikely that your legal representation would miss something, but employing a forensic accountant to aid them can ensure that nothing gets left out of the financial picture.

When preparing document requests, a forensic accountant will help your attorney get the right answers. After a subpoena, they can analyze the financial information gathered. When preparing for deposition or trial questions, your attorney has a reliable resource to tell them what to ask.


They Can Testify in Court or at Depositions

If you’re dealing with complex assets or an involved financial matter, a forensic accountant can testify on your behalf about specific issues. In many cases, this is a favorable alternative to being questioned or cross-examined by the opposing counsel yourself.


They Make Sense of All the Details

If you’re looking at dividing the value of a business, a forensic accountant will ensure a fair split between the two parties. A forensic accountant’s skill set includes being very analytical, detail-oriented, and ethical, and they also have effective communication skills.  A forensic accountant is incredibly helpful when there are assets that must be split by determining a definite value. There are many details that can be uncovered and analyzed to ensure all the income and assets are shared.


They Can Uncover Hidden Assets or Income

Not everyone is forthcoming with their finances in divorce, especially if they’re likely to lose a good portion of it in the proceedings. When one party is attempting to hide bank accounts, owned property, or even extra-marital relationships, a forensic specialist can help attorneys wade through the information and find elements that the divorcing client may not know about.

Forensic accountants are trained to look at records and see not only what’s there, but what the other party is withholding. They may uncover under-reported income, fake debts, dummy corporations, or padded payrolls that obfuscate the financial picture.

In cases where a divorced partner reports an inaccurate or fraudulent financial record, your divorce team will have a resource to reconstruct their income to help you negotiate your settlement. Without a forensic accountant, valuable assets may be missed.


Don’t Miss Out on What You’re Owed

Post-divorce life has many uncertainties, but your finances shouldn’t be one of them. Contact the team at Robert L. Coval, CPA to learn more about how our forensic accounting services can help you settle your divorce fairly.

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personal income taxes

How Your Personal Income Taxes Will Change in 2018

Personal income taxes are changing with the passage of the December 2017 tax bill. It’s time to decode the new tax law, and the following guide will help you determine how tax rate, bracket and deduction changes will affect your finances in 2018 and beyond.


When Does Everything Take Effect?

First, you should understand that unless otherwise noted, the recent tax bill changes will go into effect for the 2018 tax year, which means from January 1, 2018, to December 31, 2018. It will not affect 2017’s personal tax filing, but it will affect take-home pay for many workers, depending on your tax bracket and withholdings.


Tax Brackets

Tax brackets have seen significant changes, particularly the top bracket, which has been reduced from 39.6% to 37% and will affect most high-income earners. There are still seven federal income brackets, but the tax rates and income ranges have been amended to the following:


For Single Filers


10% $0 – $9,525
12% $9,526 – $38,700
22% $38,701 – $82,500
24% $82,501 – $157,500
32% $157,501 – $200,000
35% $200,001 – $500,000
37% More than $500,001


For Joint Filers


10% $0 – $19,050
12% $19,051 – $77,400
22% $77,401 – $165,000
24% $165,001 – $315,000
32% $315,001 – $400,000
35% $400,001 – $600,000
37% More than $600,000


Changes in Deductions

Instead of having a personal exemption and the standard deduction, the new bill simplifies matters by creating a higher standard deduction – up from $6,350 to $12,000 for single filers – and eliminating the personal exemption. When filing jointly, the standard deduction is $24,000.

There are several deductions that have been eliminated for the 2018 tax year. These include:

  • Tax preparation expenses
  • Moving expenses (except for military)
  • Casualty and theft losses unrelated to a federally declared disaster
  • Entertainment expenses
  • Unreimbursed employee expenses

Talk to our team at Robert L. Coval, CPA to determine if you will be affected by any other eliminated deductions.


Parental Tax Breaks

The Child Tax Credit has been expanded – up from $1,000 to $2,000 – and the eligibility threshold has increased significantly. For married filing jointly, the new limit is $400,000, while individuals jump to $200,000. These changes should result in a similar tax balance from 2017 to 2018 for most families.


Education Tax Breaks

If you’ve been investing in a 529 college savings plan, there’s good news. You’ll now be able to use those funds to help pay for private schooling and tutoring for K-12 grade levels instead of just college. If you decide to exercise this option, it would be wise to speak with a financial planner and make sure you’re still saving enough for your child’s college.


Medical Expense Deductions

The current deduction for medical expenses has dropped from 10% of your adjusted gross income to just 7.5%. The primary thing to note here is that this is one of the few provisions that is retroactive to the 2017 tax year, which means it will affect you this April.


Charitable Contributions

Taxpayers can now deduct donations of up to 60% of their income, which is up from the previous 50% cap. Ensure you keep diligent records of your charitable giving.


Still Confused by Taxes?

It’s okay. Taxes will always be complicated, and the more you grow your income, investments, business and family, the more involved it will get. Thankfully, you have allies at Robert L. Coval, CPA. Our mission is twofold: help you understand the tax code and how it affects you, and make sure you get the most out of each year’s tax return. Stop worrying about your taxes and contact us today!

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good cpa

How a Good CPA Supports Your Business

A good CPA can clear up confusion on business financials and taxes, which is an invaluable resource for business owners. However, a trusted accountant does more than answer tax questions and file paperwork on time. They offer foundational support that lays the groundwork for healthy business growth and longevity.

Here are four ways an expert CPA is an asset to your business:


They Act as Your Advisor

It’s important to keep a business’ books in order and file taxes promptly and accurately, but an experienced CPA has skills that extend beyond these tasks. When your CPA takes the time to fully understand how your business operates and sees your short and long-term goals, they can help you manage cash flow and execute smart growth strategies to help you get where you want to be. Underestimating costs and mismanaging expenditures can be harmful to a business’ present and future success, but making accurate forecasts and projections sets businesses up for success.


They Help You Balance Personal and Business Finances

In many cases, the small business owner juggles their business and personal finances. A good CPA can help sole proprietors, startups and small businesses find a balance and make the right financial decisions in both personal and professional areas. While this is true for businesses of all sizes, new business owners will especially have plenty of questions on how to structure their company and protect their interests. You should be able to depend on your accountant as a resource during this learning curve.


They Enable Faster Growth

Does your business structure support expansion? Can you afford to hire another employee? How can you compile financial statements that will appeal to investors? Trust an experienced CPA with these questions and you’ll be in a position to grow faster and bigger. Whether you’re contemplating a merger or an acquisition, depend on an expert in the field for real-time financial analysis.


Their Network Offers Further Support

You can trust your CPA’s recommendation on payroll providers, attorneys, investment managers and more. A good CPA always establishes a solid network of supporting providers to help their clients reach their goals. Whether you need business insurance or a litigation attorney, bring your request to your CPA and get high-quality referrals to the additional professionals you need.


How We’re Different

Is there a CPA firm that offers all of the above? Yes: the team at Robert L. Coval, CPA.

If a hands-on, hardworking accounting team is what you and your business needs, call the team at Robert L. Coval, CPA. We take care of the numbers and let you focus on your business, offering data-backed advice and suggestions along the way. When you’re ready to take the next step towards growth and long-term stability, get in touch with our team for a free consultation.

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new tax bill small business

What the New Tax Bill Means for Your Small Business in 2018

Whenever new tax laws are passed, news outlets struggle to accurately report how the changes will affect small businesses. Don’t get lost in the misinformation – come to us.

At Robert L. Coval, CPA, we will help you understand how the sweeping tax reform will directly affect your small business, both for this immediate tax filing in 2018 and beyond. While we can offer a more complete picture during a free consultation, here is a quick list of the changes you’re going to see in the coming months and years:


Boons for Pass-Through Businesses

Sole proprietorships, limited liability companies, partnerships, S corporations, and other pass-through businesses are going to see a boost in their deductions in 2018. The standard deduction for these businesses is now 20 percent, as long as their income stays below $157,500 for single filers and $315,000 for joint filers.


Go for the Big Purchase

If you’ve been holding off on making an expensive purchase for your business, now is the time. Any assets purchased after September 27, 2017 through December 31, 2022 are eligible for a 100 percent deduction. This write-off now extends to used equipment as well as new.


Fewer Client Entertainment Deductions

You can still claim a 50 percent deduction for taking your client out to lunch, but a round of golf will no longer deliver the same tax benefit. The sweeping tax bill has eliminated the 50 percent deduction on client entertainment expenses, restaurants not included.


Slashed C Corporation Tax Rates

C corporations’ tax rates won’t be amended at all in time for your 2017 filling, but you’re getting a major tax cut effective January 1, 2018. C corp tax rates plummeted from 35% to 21%, applicable to both small and large businesses. This could have a positive effect on your cash flow this year. Game plan with our team about how changes to next year’s filing can free up funds to put towards immediate business initiatives.


Don’t Go It Alone

The new tax bill has left many business owners confused as they struggle to clearly understand how the new changes directly affect their finances. Our advice? Get some professional help from an accounting team that knows business taxes: the team at Robert L. Coval, CPA. It’s our job to understand these developments and we’re good at explaining it in a way that makes sense. Let’s analyze how to maximize the new tax bill changes to your small business’ benefit. Get in touch today.

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Coval Feb Blog Graphic

Six Small Business Tax Deductions and 2018 Tax Deadlines

One of the most effective ways to increase business revenue is by taking advantage of all available small business tax deductions. You will make informed decisions on managing the current year’s expenses and smartly allocate funds for next year.

The following is a helpful list of small business tax deductions that can significantly lower your company’s taxable income for 2017 filings:

1. Insurance

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