Sunday, February 22, 2009

Sixth Day of Work

My sixth day of work was Saturday, the 21st of February. I have not updated in a few days for two reasons:

1) I worked 13 hours on Saturday.

2) I woke up Sunday at 2:00 PM to study for my upcoming accounting exam. My lunch consisted of cocoa puffs and a hot dog. I didn't know that the hot dog had expired some time ago, and as a result I experienced a "pleasant" onset of food poisoning symptoms that has yet to abate. I went to the Emergency Room today (Monday)...

Saturday was a long day at work. I worked on 6 tax returns and performed some clerical work. The clerical work consisted of going through a few check book registers and recording all the transactions in a spreadsheet. As for the tax returns, 3 of them were for college students.

Some clients insist on sending in the documents required to complete their return one at a time, so occasionally a statement or tax document will come in and need to be added to a client's return. I did this for one client, who received a huge stack of statements from his/her broker.

The other two returns were about the most "normal" returns that I've seen yet. No crazy numbers of mortgages or sources of income. Just typical families with typical incomes (job and interest). I sorted through the documents and wrote them into some blank "Pro Forma" forms that my supervisor could check. Eventually, I put these numbers into the tax program on the computer.

In my opinion, preparing a tax return requires two jobs: deciding where to put all the figures, and calculating the return. The computer is able to complete the second half, so we (tax accountants in general) are able to focus more of our energy on placing the figures in the most qualified places. The computer also allows us to create tax-planning scenarios which are a huge help when it comes to ensuring compliance for clients with businesses, for the next year.

Even as an intern at the tax firm, I still get Mobius-strip days. I get a pile of work sometimes that appears to have no beginning and no end. Every accountant has been there before. Nobody asked me to stay 13 hours on Saturday, but I take my job very seriously and sometimes things just need to get done.

Sunday, February 15, 2009

Fifth Day of Work

My post titles could use some zazz...

I've begun to realize that I work on some really strange clients. I worked yesterday, Valentine's Day, for 8 hours. I did what I usually do, which was work on tax returns. I learn so much each day, though, because every person's situation is different.

Last week I worked on a return for someone who had 5 mortgages. To college students, getting a single mortgage in several years from now is enough to think about. But five mortgages--is that not a bit excessive?

Strangely enough, the next day of work brought a case which was just the opposite. The excessive-income client submitted documentation showing 8 (eight) sources of income. I wrote the word after the number to show you that "8" is no typo. I once had 2 sources of income... and I thought I had it good. When your two sources of income pay you $9 and $10 per hour, though, some of the magic gets lost. This client, assuredly, was no wage worker. In that "8" figure I haven't included income sources for interest, dividend, or other investment income, either.

I wonder if it's because clients like these have very strange financial situations that they employ the help of some seriously qualified accountants. I'm not referring to myself, yet. Some day, though...

I took Managerial Accounting (ACCT-241) at American University in Spring 2008 with Professor Sue Marcum. On the first day of class, she gave each student a mechanical pencil because a lot of students normally use pens for all their writing. She required the use of pencil on all tests and quizzes. As she was handing me a green pencil (I told her that pink was not my color), she noticed that the eraser had fallen out of said pencil. She quickly retreated her arm and said, "Oh, that one doesn't have an eraser. You're a future CPA- you need an eraser." It's true that I do a lot of erasing working in the accounting field.

That comment, though, made an impression on me. I'd thought about accounting as a profession at that point already, but this comment got me thinking, "yeah- maybe I can actually do this for a living."

I declared my Accounting specialization shortly thereafter. Thanks Prof. : )

The Accountant's Perspective

As I prepare tax returns, I need to look at all kinds of information about a client. I need to know everything from how much they spent on prescriptions during the year, to whether or not they purchased a hybrid car or solar panels. I must also have info about charitable contributions, income(s), and expenses.

As I work on each individual tax return, I begin to see into a client's life. I can't quite whisk through returns yet, so I have time to actually learn about the clients. I will likely never meet any of the clients whose tax returns I've worked on. Even so, I feel like I can piece together a client's entire life just from the papers in front of me. Sometimes I also develop an image in my mind of what a client looks like, based on their financial activities. If someone does a lot of stock trading-and losing-then this makes an impression on me. Likewise, if a client tries to trick me into double-deducting something, or performs some other, sly move, then this also leaves an impression. My impressions of these clients eventually mold into a shape in my mind which resembles them.

Eventually, I almost feel like I can assess whether or not a client is happy with life. Of course I'm not being paid for psychiatry work, but it's the long metro rides home that give me time to slowly piece things together.

What would you think about a client like this: Limited income, a hefty mortgage, very little interest income and no dividend income, and filing a single return when s/he filed a married-filing-joint return last year. All kinds of things go through my mind. A person's job even gives some indicators about their life in general.

Tax is interesting work, in this respect.

Wednesday, February 11, 2009

Fourth Day of Work

I left the building for lunch. Talk... about... HUGE. I ate lunch for the first time without looking at a tax return. I deserved it, though- keep reading.

Today was the day of double deductions! I was working on the return for a husband and wife couple, with each partner owning their own business. The pair submitted paperwork to the firm about all of their business's activities for the last year. Well, I had to sort through page after page of useless schedules in an attempt to find the few schedules of actual substance. I began to enter figures into the tax software, coding each with a "T" for taxpayer or an "S" for spouse (see note at end), when I noticed that many of the figures were the same for both partners' businesses. Not only that, there were some expenses that were claimed as one partner's business expense, and the other partner's personal expense. Talk about confusing!

Throw in a half-dozen mortgages, interest and dividends from dozens of accounts, a living trust, foreign investment taxes paid, charitable contributions, a half-dozen W-2s, and various 1099 forms that I didn't even know existed, and the result is quite obviously a GARGANTUAN MESS. So, the fact that there were duplications of many expenses that the clients wanted deducted just added to the already insane nature of this return. I think the client was expecting a single expense to be deducted in several places, but I wasn't fooled. There's no doubling up- you get it once and that's it!

A few more things truly made this the tax return from hell: the clients want all the original documents back once the return is filed, and the clients' business activities took place across multiple states. As icing on the cake, there were so many 1098 forms that I was unable to determine exactly which paired with each of the numerous properties...yet, at least.

Getting out of the office for lunch, in the middle of this natural disaster, was my daily slice of heaven. It was about 65 degrees F when I went for a sandwich. Later in the afternoon, I was almost lucky enough to spend time responding to correspondence from the IRS... but the task above consumed most of my day. Darn. : (

I will add that this particular husband/wife couple is UNBELIEVABLY LUCKY that I'm not being billed to clients yet. I'm still reporting my hours as "training," per my supervisor's instructions. I assure you, though, that the sheer amount of crap that had to be sorted through would've taken any CPA just as long as it took me.

Note: I code each partner of a joint return as the "Taxpayer" or the "Spouse" so that, even though the pair may be filing jointly, informational/phony "married filing separately" returns can be produced for the couple to see the tax implications of filing separately.

Friday, February 6, 2009

Kogod Case Competition, No Work

It's presently 12:35 AM and I working diligently with my Kogod Case Competition team on our presentation for this morning. I say this morning because we are schedule to present our solution to a panel of judges in roughly 9 hours. So far we've put about 20 hours work each into preparing for the competition. We'll likely have contributed another 10 by the time the entire competition is over.

What are we putting ourselves through this for, I wonder? Well, I really don't wonder. While there may be other things that I'd rather do on a Wednesday, Thursday, and Friday night, and finally, Saturday morning, I'm putting myself through this for the experience and its rewards. This is my third time competing in the Gartenhaus Financial Case Competition, and the cost-benefit ratio changes each time I compete. No matter what, 30+ hours will be put into preparation for the case. Starving my frontal lobe of rest by depriving myself of sleep for the entire night before the competition is a given. I do it, though, for the networking opportunities and the free lunch at the end. It's hard to feel a real sense of competition when I don't see any of my competitors during the actual competition moments.

We need coffee, our brains are beginning to mush, and.. I think we're over the hump. Once you get past the 1-2 o'clock "hump," it's much easier stay awake for the rest of the night. Hard working high school and college students know what I'm talking about.

It's time to practice presenting. This year's case is about an Upholstery company based in South Africa. The company is having some cash flow and management problems it seems, and we're attempting to creatively work through these issues. Unfortunately I'm going to have to miss work today (Saturday) because of the competition! This actually does upset me. After a day of hard work at the Tax firm I feel like I've really earned my money and gotten a great education in the process. It's such an intense job that requires the use of my brain at almost all moments to correctly perform. I'll miss not going, but I'll be glad to sleep when this competition is over.

Missing 8 hours this week isn't too big a deal, though, since I'll surely be working more than 20 when the heaviest parts of the tax season arrive. I'll likely head in 3 days per week during late March and early April, assuming there's enough for me to do. We'll see, and I'll surely keep you informed.

Back to work this Wednesday.

Wednesday, February 4, 2009

Third Day of Work

Today seemed to move so slow. I have to use a lot of brain power at my job, so it feels really tiring in a hurry. I'm not used to having to think so much because my previous jobs didn't require too much learning. Now, however, I am attempting to absorb an ocean of knowledge about Tax, and it's really quite a challenge.

I began the day by getting set up in the office's payroll and time keeping system. Though I'm not being billed to clients yet, I still must keep good track of my time so as to acclimate myself to normal practice. I keep detailed notes about what I do, who I do, and for how long I do it. When I say "who I do," of course, I'm referring to the client whose return I am working on.

I spent some time learning how to print out blank tax forms. With the blank forms, it's easy to take a person's file and go through each document, one-by-one, and input all the important figures into the appropriate boxes. As I was doing just that this morning, I would recheck my work, and pass along what I'd done to my supervisor who would correct my few errors. After the corrections were made, I could enter all the client's return information and figures into the computer program, which then computes everything and assembles the return. This process is easy enough for simple tax returns, but unfortunately, most of the returns we do where I work are incredibly complex. I think mainly we work for people who are really good at what they do, so they make a lot of money.. but what they do isn't accounting. Ergo, they don't have either the time or know-how to accurately complete their own return.

I ate some crackers with cream cheese, and some sliced red peppers and cucumbers for lunch. Lunch flew by quickly, the only part of the day that did so. After lunch was more learning from my supervisor. We reviewed deductions and their limitations. I learned where business deductions versus personal deductions belong.

Certain figures that clients provide, like amounts of charitable contributions, we just plug into their return and both parties (the accountant and the client) share the understanding that should the IRS come knocking, the client is responsible for proving what they've claimed. I've begun to learn what types of claims by clients cannot just be filled in at a client's whim, and which we actually require documentation for. For example, we cannot fill in a client's income information without having their W-2. Seriously, we can't just take your word for it... you've got to show us.

So all this learning was taking place, and my brain was starting to ooze from my ears! I was able to finish the day with a little clerical work, which took some of the edge off... even though it was only then when I began to drink the coffee. I really feel like I'm earning my money at this job. I can see why the accounting profession is potentially very lucrative. With all the thinking that goes on, the salaries just make sense. This isn't simple math thinking, this is complex reasoning and analysis that requires a pretty intelligent brain to begin with.

Sunday, February 1, 2009

Second Day of Work

I arrived at my work building yesterday at 8:30 AM. Nobody from the firm mentioned that the building would be locked on Saturdays, however, and that a special key is required to gain entry. Luckily for me, someone from a different business located in the same building came to work a few minutes later, and let me into the building.

Nobody from the firm mentioned that the same special key would then also be required to operate the elevator or unlock doors in the fire escape. AKA I was stuck in the lobby of this building for a short while. Eventually a desk attendant of some kind was able to assist me, and I met my new supervisor in the elevator on my way up to the office.

My new supervisor, not the same person who runs the firm and who hired me, was born in the 1920s to the best of my knowledge. He has an office assistant who performs all of his letter-writing needs. Thus, it's the three of us who sit in one medium-sized office to do our work.

My supervisor says to me, "Don't trust anyone!" Sure... then he says "If you have a question, ask ME and don't talk to anyone else!" Well then... "You're allowed to make two kinds of mistakes when you work for me.. do you know what they are?" I replied "no," that I have no idea. He says "None, and none whatsoever." Finally he says, "you have to be perfect when you work for me, or really close to it."

It would seem these are the terms of my employment, and yet I like them. My new supervisor keeps things orderly, maintains meticulous records, and gets every job done efficiently. What's more, he encourages me to ask questions. Because I'm learning the ropes of this brand new "tax world," I'm more than welcome to interrupt him any time I like to ask questions. From what I've heard from other CPAs, accountants in general don't like to be bothered. I'd heard that older accountants especially are very reluctant to take time out of their busy schedule to teach younger employees new things. My supervisor, on the other hand, is the exact opposite, and I love it!

I want to learn as much as I can about the business I'm working in, and I think that things are going to work out very well between my supervisor and I.

I began the day by having a snack. Yesterday was the first Saturday of Tax Season that all personnel are expected to work. From now until April 15th, I and every other accountant at the firm will be in on Saturdays. Accordingly, each member of the team has signed up for a Saturday that they will bring breakfast for everyone else to snack on in the morning. So I ate a croissant.

Then I was given the task of printing off some "Pro Forma" forms using a computer system. These were basically blank tax forms that my supervisor and I would use to write in information about clients. I began to sort through a client's tax documents, and as I found important numbers, I would input them onto these blank Pro Formas. Afterward, my supervisor went through my Pro Formas line-by-line to ensure that I'd put things in the correct place, and to correct me where I hadn't. Although I didn't get this far, the final step will be to type these hand-written numbers into the computer's tax program, so that the return can then be compiled.

One might think that this is a simple process, but there are over 250 schedules and other IRS forms that can potentially be worked through, and some clients have incredibly sticky tax situations. When people work a job, own a business, have a trust, IRA, inheritance, etc, and live in a foreign country... holy boboli things can get messy really quick. It's not as easy as just punching numbers into the computer, either. As accountants, we have to look into how certain figures are contrived, to ensure that neither we nor the client are breaking the law.

I've found that we tend to be conservative in the tax world, for example we may be slow to include certain deductions on a Schedule A because of one reason or another. At the same time, though, if a client provides us with information that they assure us is factual, even though they do not submit supporting documents to verify the situation, we simply go with what the client wants. Naturally, however, the client is informed in writing that they must be able to provide proof of every figure quoted on their entire return to the IRS, should they be audited.

As the day moved along, my supervisor had to leave the office, and his letter-writing assistant left too. I was left to do research and reading. I spent some time trying to memorize tax forms, so that in the future I don't have to look very long for the place where a number goes. I also read the firm's "Quality Control Assurance" manual. That was interesting and provided some guidance on how to do my job, and the professional expectations that the workplace carries. Lastly, I ran through some tutorials on the computer to familiarize myself with the tax software that the company uses.

All-in-all, I wasn't too thrilled to be working on a Saturday.. but I'll get used to it soon enough, for I know that getting used to working 6 days per week during financial statement seasons, or tax season, will be a must for when I begin working in the accounting business full time.

I also tried the coffee in the office's kitchen for the first time.. french vanilla. Yum.