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Monday, July 17, 2017

Montanans Given Chance to Secure Their Water Rights

By Amorette Allison, Miles City Star

Many property owners in Custer County and throughout Montana received a letter in the mail recently from the Montana Department of Natural Resources that had something to do with water rights.  The letter has confused more than a few people.

The letter was sent to property owners throughout the state who might have either an in-stream or groundwater right on their property.  The letter is giving holders of water rights an opportunity to formally file for that right if they have not done so previously. 

According to the state officials, if property owners know that they have a water right and it was filed for at some time in the past, they can ignore the letter.  And if the property has neither a stream nor a water well, the letter can also be ignored. 

State Rep. Brad Hamlett (D-Cascade), formerly a four-term state senator, introduced a bill in the 2017 legislature with the short title of “Revise laws for the filing of exempt water right claims.” That bill’s passage is what led to the letter being sent. 

Officials said that many property owners, especially if they live in town and have city water, have no idea if they even have a water right.  Fortunately, DNRC has both an online listing of water rights and a phone number – 406-444-0560- to call to inquire.  The agency has been receiving a very high volume of calls.

That is one reason, said John Grassy, communications officer of DNRC, that the deadline for the latest round of water filings is not until June 30, 2019.  “The two-year deadline gives people a chance to do research,” he explained. 

DNRC has posted a video and a “Frequency Asked Questions” section on their website to explain what an exempt water right is, whether you have one, and why you should fill out the form and mail them a fee.

Hamlett, the state lawmaker who sponsored the bill, explained that water laws in Montana have a long and complicated history.  “Our water rights are the history of Montana and we want our history to be as accurate as possible.” For one thing, Hamlett wants to make certain that every water right in Montana is filed and recorded because the total amount of those water rights is important when determining the downstream flow of the Missouri and Yellowstone rivers after they leave Montana.  If Montana has a certain amount of claimed and dated water rights, those rights have priority over claims downstream. 

Another reason Hamlett wants the water rights updated is the computer systems and programs have “greatly increased the efficiency of filing.” With water rights dating back to the mid-1800s and major updates having occurred in the 1970s and 1980s, there are a lot of paper files that need to be updated to a modern format. 

The DNRC handbook states that a water right belongs to the land on which it is used.  “When that land is sold, the seller shall disclose on the realty transfer certificate (RTC) at or before the closing, if any water rights associated with the property will be transferred with the land (section 85-2-424, MCA).  A fee must be paid at closing or upon completion of the transfer.”

Determining if the property came with water rights may mean finding the paperwork from when the property was purchased.  Those papers may tell you if the water rights for your property has already been filed. 

In Montana, water right distribution follows the traditional “first-in-time, first-in-right” philosophy.  So a user with an older, senior water right always takes preference over the junior water right, even if that means the junior water-right holder receives no water. 

Since the form takes time to research and fill out and a filing fee is required, many property owners may decide that it is not worth filing rights on an abandoned well, particularly in communities with public water systems, where many old wells have been capped and abandoned.  However, some people in Miles City still use wells, usually for lawns and gardens.  In older homes, those rights were probably filed for.  If a water right is not filed and dated, that right can be considered abandoned. 

Most agricultural producers have an idea of their rights but many in-town residents need to check into the issue as well and then Montana will be ready for any 21st century water battles. 

Wednesday, July 12, 2017

Starting a New Business Part 3

In Part 3 of our New Business Series, we're looking at the concept of a formal business plan.  A business plan describes the business: how it operates, how it is managed, how it interacts in the marketplace, how it functions financially and what its strengths and weaknesses are.  The following excerpt from the SBDC Small Business Start Up Guide explains the importance of a well thought-out business plan.  The process may seem intimidating, but the benefits of a formal business plan aren't just limited to new businesses; it can also help owners of existing businesses re-evaluate and solidify their goals. So, here are five reasons why you should write a business plan:

1) To test the feasibility of your business idea.
Writing a business plan is the best way to test whether or not an idea for starting a business is feasible, other than going out and doing it. In this sense, the business plan is your safety net; writing a business plan can save you a great deal of time and money if working through the business plan reveals that your business idea is unsustainable. An idea for starting a business may be discarded at the marketing analysis or competitive analysis stage, freeing you to move on to a new (and better) idea.

2) To give your business the best possible chance of success.
Writing a business plan will ensure that you pay attention to both the broad operational and financial objectives of your business and the details, such as budgeting and market planning. Taking the time to work through the process of writing a formal business plan will make for a smoother start-up period and fewer unforeseen problems as your business becomes established.

3) To secure funding.
You’re going to need both operating and start-up capital to start a new business, and you have slim chance of obtaining funding from established financial institutions (banks) without a well-developed business plan.

4) To make business planning manageable and effective.
Viable businesses are dynamic; they change and grow. The company’s original business plan needs to be revised as new goals are set. Reviewing the business plan can help you see what goals have been accomplished, what changes need to be made, or what new directions your company’s growth should take.

5) To attract investors.
Whether you want to shop your business to venture capitalists or attract angel investors, you need to have a solid business plan. A presentation might pique their interest, but they’ll need a well-written document they can take away and study before they’ll be prepared to make any investment commitment. Be prepared for your business plan to be scrutinized.

In our next article we'll address the topic of business structure. 

Wednesday, July 5, 2017

Starting a New Business Part 2

In Part 2 of our series, we're exploring the SBDC Business Start-Up Guide.  Did you know that only 20% of new businesses survive past their first year? And only 50% of those will make it to 5 years!?  (Source USA Today).  If you want to be one of the success stories, then you need to be prepared.  Let's look at the SBDC new business checklist:
If you're starting a new business, you probably have enthusiasm and what you think is a good idea to make you some money, but part of making a successful business is evaluating both your idea and yourself before going off with nothing but blind ambition.

The SBDC guide recommends conducting market research as part of your business development process so that you understand your proposed market and the potential demand for your product or service.  This might mean using your own experience and the connections within your industry or conducting interviews or surveys of potential customers.  Regardless of how you go about it, here are the questions SBDC recommends you ask:
  1. What will you offer? Describe in detail the products/services you will sell.
  2. Why will customers want to buy your products/services and what is your competitive edge?
  3. Who are your customers? Describe the characteristics of your potential customers.
  4. How did you determine these customer characteristics and what sources did you use?
  5. How will you reach customers and motivate them to buy your products/services?
  6. Who is your competition and how do you compare? List and describe your direct competition.
For most small business owners, starting a business means being actively involved in it.  This means that in addition to evaluating your idea, you also need to evaluate yourself.  So here's a few of the questions the SBDC suggests asking yourself before you embark on your business venture:
  1. Do I like being in charge and do I accept responsibility for my actions?
  2. Am I confident in my ability to overcome obstacles and can I function in an environment of uncertainty?
  3. Am I able to motivate and inspire people?
  4. Am I willing to devote my time, energy and money to making this a success?
  5. Is the risk of my financial assets worth the expected rewards?
  6. Do I understand my own limitations and know when I need to ask for help?
  7. Do I have a history of success at things to which I am committed?
  8. Do I have a strong support-group of friends, family and/or community?
With the evaluation step complete, next we can look at the business plan.  

Wednesday, June 28, 2017


The office of Gardner & Billing CPAs will be closed for the 4th of July holiday.  We will be closed from noon on Monday, July 3rd and will reopen with regular hours on Wednesday, July 5th.  Enjoy the great events happening in our community and don't forget to check out our Uncle Sam photo board in front of our office on the 4th! Have a safe and happy Independence Day!

Wednesday, June 21, 2017

Starting a Small Business

Thinking of starting a new business? You may have the ambition and desire, but have you utilized the proper tools and resources to become informed and ensure that you succeed in your goals? At Gardner & Billing, CPAs we offer a number of services to supplement and assist you in your small business, but we also understand that getting off the ground can make for a very fee conscious consumer. One of the biggest mistakes you can make as a new business owner is thinking you can do it ALL and not asking for help, especially in areas that are new and unfamiliar to you. Ideally, you can consult the experts: talk to your banker, hire an accountant and engage an attorney; but seeking council on these topics doesn’t always have to cost you money either. Did you know that there is an organization dedicated to helping small Montana businesses succeed?

The Montana Small Business Development Center (SBDC) Network is a partnership between the Montana Department of Commerce, the U.S. Small Business Administration, regional economic development organizations and the Montana higher education system. The SBDC Directors and Business Advisors assist clients every day with the preparation or fine-tuning of business plans, financial management, operations assistance, loan packaging and marketing initiatives. SBDC training seminars and workshops cover timeless small business issues such as cash flow management, as well as new and emerging trends.

The SBDCs are dedicated to helping small businesses throughout Montana achieve their goals of growth, expansion, innovation and success. The SBDC Network combines the resources of federal, state and local organizations with that of the private sector and education system to meet the specialized and complex needs of the small business community.

In our upcoming blog series, we’ll be exploring the SBDC’s guide to starting a business so that you know what to expect, what’s expected of you, and where to find the help you need to make your dream a reality! 

Wednesday, June 14, 2017

Happy Father's Day from Gardner & Billing!

Gardner & Billing CPAs would like to wish 
all the dads out there a Happy Father's Day!  
Thank you for all you do!

Wednesday, June 7, 2017

Mid-year tax moves to make now

It's summer, the best time of the year to think about your taxes. Really.

A lot of people wait until December to start thinking about their tax bills. True, you can and should make some year-end moves by Dec. 31. But now, halfway through the tax year, is even better for tax planning because you have a good idea of what your earnings will be and there's still plenty of time to take steps that could cut the taxes you'll owe.

So take a quick break to check out these mid-year tax moves. Then you can get back to your leisure pursuits and really enjoy them, knowing you're in better tax shape.

1) Finish Your 2016 Return
First thing’s first; if you received an extension to file back in April, finish up your 2016 tax return now. Sure, you have until Oct. 16 (the usual 15th deadline is on Sunday), but you don't have to wait until the last minute. Finishing up your taxes in a rush, whether in April or October, is a recipe for disaster. At best, you could overlook a deduction or credit that could cut your tax bill. At worst, you could make a filing mistake that could cause problems down the road.

2) Adjust Your Withholding
Did you get a big refund? Are your work and tax circumstances about the same this year as last? Then you might want to adjust your withholdings so that you won't get a big tax refund next filing season. Americans apparently like getting a tax refund, but the ideal payroll withholding situation is to have just enough tax -- not too much, not too little -- withheld from your paychecks to meet your eventual annual tax bill. In this way, you'll avoid writing the U.S. Treasury a check for tax due if you under-withheld, and if you over-withheld, you won't be waiting for a refund check. Changing your withholding is easy - just stop by your payroll office and submit a new W-4.

3) Evaluate Your Estimated Taxes
Estimated tax payments are required if you have income that isn't subject to withholding. It's the IRS' way of ensuring that you're paying as you earn on all your income. By making the four quarterly estimated tax payments a year, you'll help ensure you don't underpay your taxes. That's important because if you owe too much at filing time, you could face a tax penalty. However, you also don't want to overpay your estimated taxes. Summer's a great time to reassess your estimated tax situation. Look at what you've paid via your April and June 1040-ES filings and see whether your schedule is still on track. If not, you can adjust your upcoming September and January estimated tax payments

4) Hire a Tax Professional
Whether you need a tax expert's assistance to finally file your extended 2016 return or you're looking for help in getting your 2017 tax act together, now is the time to hire someone. The filing season crunch is over, meaning that all types of tax professionals have a bit more time. It also gives you time to determine exactly which type of tax preparer fits your tax needs.