Question:

never thought about this but whatz the difference?..Does the W have port injection? Went out and looked in the Haynes manual and it mentions a CPI system which seems to be a cross between a TBI system and individual injectors…..more HP?

The Z is a TBI, it has 2 injectors and the setup looks like an electronic carb.  Has a round air filter on top of the engine with a horizontal throttle plate.  The W motor, also called the CPI or Vortec, has a filter box in front of the oil filter in the engine bay, behind the driver’s headlight.  There are 6 injectors on the V-6, but they all fire at once.  I believe there’s a different cam in each motor, plus the injection setup, accounting for the extra HP.  Oh yeah, the W engine has a vertical throttle plate, it sits in front of an intake plenum that looks like a black spider.

Response:

never thought about this but whatz the difference?..Does the W have port injection? Went out and looked in the Haynes manual and it mentions a CPI system which seems to be a cross between a TBI system and individual injectors…..more HP?

Response:

Question:

Hi all — One of my clients has a food-service business (coffee, tea, resaurant equipment, and the like).  I’ve been working for the last couple of months slowly getting this business in a decent footing so far as the accounting is going.  (They started a year ago last summer and had never reconciled any checking accounts, and the rest is in worse shape.) So far, I’ve got their payables straight and up to date, did their bank rec’s from last July through to the end of this past June, and was about to start on receivables.  The plan was to start tracking everything properly as of July 1 this year and just do one large inventory adjustment for Jan 1 – June 30. Without touching the receivables for this year at all, I’m seeing in the general ledger all these "System Cost Adjustment" entries in the cost of goods sold accounts.  I didn’t put them there, and neither (he swears) did my client.  Does anyone have a clue where these are coming from and why?  I can see them in the general ledger, but I can’t find them anywhere else, and it’s a report where you can’t drill down to the original transaction.  They’re ending up with a negative cost of goods sold, and I know they are paying for the stuff, and not being paid to take it! A second problem I found in the reconciliation — there’s one check, entered twice (on different days), and I can’t find the duplicate to void it.  It’s not in the write checks or make payments transactions list or in the check register; it just shows up in the bank reconciliation screen.  Again, I’m confused; I haven’t seen these oddities before. Thanks for any/all help! Catherine

Response:

I had a client with that problem.  Somehow they were taking a "cost" from inventory every time they made a sale, but were recording inventory purchases in some account other than inventory, so they had a negative inventory and a negative cost of sales. It took me a lot of effort to figure it all out and I don’t remember the details now.  They used Peachtree accounting.

– Hide quoted text — Show quoted text – Hi all — One of my clients has a food-service business (coffee, tea, resaurant equipment, and the like).  I’ve been working for the last couple of months slowly getting this business in a decent footing so far as the accounting is going.  (They started a year ago last summer and had never reconciled any checking accounts, and the rest is in worse shape.) So far, I’ve got their payables straight and up to date, did their bank rec’s from last July through to the end of this past June, and was about to start on receivables.  The plan was to start tracking everything properly as of July 1 this year and just do one large inventory adjustment for Jan 1 – June 30. Without touching the receivables for this year at all, I’m seeing in the general ledger all these "System Cost Adjustment" entries in the cost of goods sold accounts.  I didn’t put them there, and neither (he swears) did my client.  Does anyone have a clue where these are coming from and why?  I can see them in the general ledger, but I can’t find them anywhere else, and it’s a report where you can’t drill down to the original transaction.  They’re ending up with a negative cost of goods sold, and I know they are paying for the stuff, and not being paid to take it! A second problem I found in the reconciliation — there’s one check, entered twice (on different days), and I can’t find the duplicate to void it.  It’s not in the write checks or make payments transactions list or in the check register; it just shows up in the bank reconciliation screen.  Again, I’m confused; I haven’t seen these oddities before. Thanks for any/all help! Catherine

Response:

Thanks, everyone. Yes, their inventory stuff is still all messed up.  They receive by the case, but sell by the pound or the case, so all the quantities are a total joke. That’s the next thing in line to do after I finish getting the payables in order (mostly done, phew) and then the receivables (more of a pain, because they’ve done some of it so I have to check _everything_ before it can be entered).  Oh, man, the problems people get into when they think they can handle the bookkeeping by themselves! They had some of their inventory purchases getting posted to AP, and some to COGS accounts, and some getting posted to inventory accounts.  I’m still going through every purchase this year (finished Jan-Jun) to check for odd ones. I’ll try the integrity check thing next time I’m over there. I _really_ appreciate the help. Catherine – Hide quoted text — Show quoted text – Catherine, Peachtree posts the System Cost adjustment itself.  This occurs when the quantity of an inventory item goes to a negative amount when invoicing.  (ie 5 on hand and you sell 6).  Peachtree posts the cost of sales for the 6th item at 0.  When this item gets re-stocked to a positive quantity, Peachtree makes the entry to correct the cost of goods sold entry from the prior sale. On the check issue, this seems to happen too often in Peachtree.  Some checks won’t appear in the list, etc.  Sometimes running an integrity check on the files will correct this situation.  If you are not familiar with the integrity checks, I would suggest calling Peachtree and having them walk you thru it. Good Luck, — Sincerely, Steven C. Butler, CPA 6011 Morriss Road, Ste 300 Flower Mound, TX 75028 Phone (972) 724-9339 Fax (972) 355-8962 Note: The information contained in this message may be privileged and confidential and protected from disclosure.  If the reader of this message is not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly prohibited.  If you have received this communication in error, please notify us immediately by replying to the message and deleting it from your computer.  Thank you. Steven C. Butler, CPA

Response:

Re case issue.  That is normal in low ends.  I use it as a major selling feature in ACCPAC Pro. Glad you got some help.   Bill Couture

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Question:

You’re right, is isn’t actually part of the law, but it will be used in this way once it’s passed.  After the information is available to drs. and insurance companies (and insurance companies work along side with the government) lobbying will take it’s course and our information will be public to corporations, where we get many of our jobs.  Lobbying, personal interest side cash is how the whole system is built on as you know. – Hide quoted text — Show quoted text – You guys are too funny.  Don’t you use the potential thread with this.  We’re not talking about doctors only sharing our records at their free will, and not having to do their jobs cause of it, but employers will now be able to look at our records, I could be wrong but I don’t believe that was part of the law.  It involved sharing records between Drs. and insurance companies.  No employers. Tono

Response:

You guys are too funny.  Don’t you use the potential thread with this.  We’re not talking about doctors only sharing our records at their free will, and not having to do their jobs cause of it, but employers will now be able to look at our records,

I could be wrong but I don’t believe that was part of the law.  It involved sharing records between Drs. and insurance companies.  No employers. Tono

Response:

You guys are too funny.  Don’t you use the potential thread with this.  We’re not talking about doctors only sharing our records at their free will, and not having to do their jobs cause of it, but employers will now be able to look at our records, then see anxeity/depression disorder, then decide from that whether or not to higher us.  It’s beyond a slippery slope.  I opens the door to a complete identity crisis, and remember, once this is a law, it’s nearly impossible to reverse it. So if anyone on this board has been diagnosed with anxiety/mental disorder, non-physical condition, your job opportunities just dropped significately.

Response:

- Hide quoted text — Show quoted text – Bush weakens medical privacy Core of Clinton protections abandoned — but use of data for marketing is curbed I think it may have been a necessary evil.  One major problem still, will be people who don’t pay for health insurance all their life, then contract a expensive/deadly disease.  They get tested positive through an anonymous testing agency, or use false ID.  Then they go out and get a life insurance policy, a health insurance policy, without them knowing their real health records.  So get away with paying the average rate for health insurance, even though they are extreamly high risk.  Now if they were paying for insurance for all their life, then the deadly diagnosis came along, at least the health insurance company would have been compensated fairly.  Don’t get me wrong, I know health insurance is expensive, I’m self employed and pay my own!  But there are many who cheat the system, and that makes it cost more for the rest of us. Tono

Tono, No, it’s not a necessary evil in my opinion.  I am mostly concerned about the frequency with which people change jobs these days, and the fact that when seeking a new insurance carrier, pre-existing conditions are usually excluded for a lengthy period of time. I believe in absolute patient-doctor/patient-therapist confidentiallity, with the possible exception applying to legal matters of serious import. Bush is proving to be a weak man.  In the midst of greatness, he has lost his way.  Oh well. psf

Response:

Bush weakens medical privacy Core of Clinton protections abandoned — but use of data for marketing is curbed

I think it may have been a necessary evil.  One major problem still, will be people who don’t pay for health insurance all their life, then contract a expensive/deadly disease.  They get tested positive through an anonymous testing agency, or use false ID.  Then they go out and get a life insurance policy, a health insurance policy, without them knowing their real health records.  So get away with paying the average rate for health insurance, even though they are extreamly high risk.  Now if they were paying for insurance for all their life, then the deadly diagnosis came along, at least the health insurance company would have been compensated fairly.  Don’t get me wrong, I know health insurance is expensive, I’m self employed and pay my own!  But there are many who cheat the system, and that makes it cost more for the rest of us. Tono

Response:

Bush weakens medical privacy Core of Clinton protections abandoned — but use of data for marketing is curbed Saturday, August 10, 2002 By ROBERT PEAR THE NEW YORK TIMES WASHINGTON — The Bush administration yesterday formally rolled back some major protections for the privacy of medical records adopted by President Clinton. But at the same time, it set new standards curbing the use of personal data to market prescription drugs and other health care products. The rules, the first comprehensive federal standards for medical privacy, will affect virtually every doctor, patient, hospital, drugstore and health-insurance company in the United States. The rules issued yesterday are the final version of changes proposed in March. They embody more than five years of work and have the force of law. Most health care providers and insurers must comply by April 14, 2003, or face civil and criminal penalties, including a $250,000 fine and 10 years in prison for the most serious violations. The Bush administration decided to abandon the core of the Clinton rules, a requirement that doctors, hospitals and other health care providers obtain written consent from patients before using or disclosing personal medical information for treatment or the payment of claims. Instead, health care providers will have to provide patients with notice of their remaining rights, and they must make "a good-faith effort to obtain a written acknowledgment of receipt of the notice." Administration officials proposed the change despite opposition from consumer advocates, patients’ rights groups and psychiatrists. Tommy Thompson, the secretary of health and human services, said the rules struck a common-sense balance. "The prior regulation, while well-intentioned, would have forced sick or injured patients to run all around town signing consent forms before they could get care or medicine," he said. The rules guarantee patients access to their medical records and limit the amount of information that can be disclosed for various purposes. The issue of medical privacy now goes to the political arena. Some Democrats are already making an issue of the new rules. Sen. Edward Kennedy, D-Mass., said the administration was "favoring the interests of powerful corporations over those of ordinary Americans." In a recent speech, Terry McAuliffe, chairman of the Democratic National Committee, said the White House seemed to worry less about the privacy of medical records than about the secrecy of Vice President Dick Cheney’s energy task force. Under this administration, McAuliffe said, "it’s OK to reveal personal medical information about the American people, but when the oil companies meet with policy-makers to ask for special favors, that’s guarded like a state secret." At the same time, the new rules won praise from the American Hospital Association and the American Association of Health Plans, which represents health maintenance organizations. Susan Pisano, a spokeswoman for the HMO group, said, "The final rules represent a balanced, workable approach that protects privacy without undermining patients’ health care." The new rules appear to set strict standards on the use of personal medical data from patients for the purpose of marketing. The rules prohibit drugstores from selling such information to a drug company or other business that wants to market products or services. In the past few years, some drug companies have paid pharmacies for customer health information and used it to try to sell products to people with conditions such as osteoporosis, diabetes or depression. Mary Grealy, president of the Health Care Leadership Council, which represents large health care corporations, said the Bush rules were "stronger and tougher" than the Clinton rules on marketing. Lobbyists for hospitals, drugstores and insurance companies saw the Clinton rules as unworkable. Pharmacists said it would be difficult to obtain written consent from a patient whose doctor phoned in a prescription that was picked up by a neighbor or a relative. The Mayo Foundation of Rochester, Minn., said the consent requirement was an "affront to patients" and "bad medical practice," because it would force doctors to secure written consent from patients before even inquiring about their problems. But Democrats and consumer groups said stricter standards were necessary because of an explosion in information technology that permits people to disseminate medical data with the click of a computer mouse. The new rules include these provisions: In general, information from a person’s medical records cannot be disclosed to an employer unless the patient specifically authorizes the disclosure. Patients can review their medical records and request changes to correct any errors. Researchers can use medical records to track an outbreak of disease if they strip the records of the patients’ names, addresses, Social Security numbers and other "direct identifiers." The federal rules establish minimum protections for medical privacy. State laws providing more protection will still apply. Under the rules, the "incidental use or disclosure" of personal medical information is allowed. As examples, doctors can still use sign-in sheets in office waiting rooms, and can talk with patients in semiprivate hospital rooms without fear of violating the rules. ACLU Dismayed At Implementation of Flawed Medical Privacy Regulations Friday, August 9, 2002 WASHINGTON – Saying the Bush Administration’s final federal medical privacy regulation fails to fulfill its promise of safeguarding arguably the most sensitive personal information, the American Civil Liberties Union expressed dismay at the final regulation and called for a legislative fix. "This regulation takes one step forward and two steps back," said Katie Corrigan, an ACLU Legislative Counsel. "By eliminating consent requirements for certain health care functions, the Bush Administration is taking power away from the patient and putting it in the hands of federal bureaucrats." The ACLU is especially concerned with a provision in the regulation that allows law enforcement unchecked access to individual medical records, without a warrant or even notice to the individual whose medical records are at issue. When it comes to medical records — arguably the most sensitive of all private information — law enforcement should be held at least to the same Fourth Amendment-like requirements used for video records and cable programming subscriptions, the ACLU’s Corrigan said. Also troubling to the ACLU is the absence in several instances of patient consent requirements. The regulation does not require patient consent before highly sensitive personal medical records are used or disclosed for the purposes of treatment, payment and various health care operations. Doctors simply need notify patients that their records will be disclosed. "The touchstone of medical records privacy is patient consent," Corrigan said. "By coupling this erosion of consent requirements with the unchecked ability of law enforcement to say ‘Hey, this guy looks suspicious, let’s go fish around in his records,’ the Administration fails to provide Americans with meaningful privacy protections for medical information." Privacy protections for teenagers’ medical records are also affected by the new regulation. Many teens avoid sensitive health care services — such as mental health care, substance abuse counseling and treatment for sexually transmitted diseases — because they fear their records will be revealed to their parents. While the ACLU had argued that the regulation should protect teens’ records from disclosure in the limited circumstances where they can lawfully consent, the new regulation defers to state law and health care providers’ discretion. The ACLU called upon providers to follow sound ethical and medical protocols to maintain, where appropriate, the confidences of their minor patients. Individuals Lose But Government and Corporations Gain Control over Personal Health & Genetic Information Bush Administration Grants Data-Processing Companies and Other Health Care Industries New Federal Regulatory Authority to Collect and Share Individuals’ Personal Health Information

Question:

- Hide quoted text — Show quoted text – A group of CPAs that meets in Vegas annually in July or August is interested in new members. I am a member of a group of CPAs that has been meeting annually for more than 20 years since it initially met in 1981 as a part of the AICPA Management for Results Seminar (MFR). Our group continues to have a core membership of 15 CPAs.  Due to pending retirements & other factors, we are interested in adding new members. If you think you might be interested, please read on. NOTE – This is NOT a sales pitch to sell you some product or service. John

John,     We have 1 1/2 to 2 days of business meetings each year.  This year, for instance, we had the CEO’s of both the UTAH and MARYLAND State CPA Societies come to make a presentation to us on the AICPA Vision Project and on the current state of the profession in view of the Enron and related scandals.  We also develop an agenda of topics that the participants want to talk about.  We discuss almost anything related to managing an accounting practice.  I can send you some sample agendas from prior years if you would like me to do that.  We also review the financial survey of operating results for the firms who participated in the annual survey.  I hope this helps. Jim

Response:

A group of CPAs that meets in Vegas annually in July or August is interested in new members. I am a member of a group of CPAs that has been meeting annually for more than 20 years since it initially met in 1981 as a part of the AICPA Management for Results Seminar (MFR). Our group continues to have a core membership of 15 CPAs.  Due to pending retirements & other factors, we are interested in adding new members. If you think you might be interested, please read on. NOTE – This is NOT a sales pitch to sell you some product or service. We are looking for CPAs who are managing partners of small to medium sized CPA firms and sole practitioners who would like to meet annually with like-minded CPAs to discuss the challenges and concerns of managing a public accounting firm.  A number of the group members have left public accounting and are now in private industry.  I am one of those members who left public after 27 years.  I have found value in attending these sessions.  Thus, we are not averse to adding new members from private industry. We meet each July or August in Las Vegas, NV.  We have met in Reno, Tahoe & Laughlin, Nevada several times as well.  Many in the group enjoy gambling and/or golf, thus we choose the Nevada locations.  It is likely we will continue to meet in Las Vegas in the future.  We have a truly enjoyable fun time each year as well as benefiting from professional interaction within the group and from speakers whom we bring in to lead discussions. We are from all over the country (CA, OH, VA, UT, NM, MD, WA and CO). Our firms range in size from $125,000 to $3,000,000 in gross fees. The members in public practice complete a financial survey each year and we review the results at our meeting.  Costs for this meeting are very low.  Flights to Vegas and hotel accommodations in the summer are VERY reasonable. If you have any interest and would like to find out more about the group, please contact me – Jim Warrick, c/o Roberts Oxygen Company, Inc., 7564 Standish Place, Rockville, MD 20855 – Phone # 301-315-9090, send you copies of our prior agendas, financial survey forms and some prior year results. The normal annual cost for a new member will be waived the first year (these are costs that the members of the group incur to cover the meeting room, speakers, a continental breakfast, lunch, sodas, etc.). The only costs you would incur would be your travel, meals and lodging costs to visit Las Vegas. Thanks. Jim Warrick

Response:

A group of CPAs that meets in Vegas annually in July or August is interested in new members. I am a member of a group of CPAs that has been meeting annually for more than 20 years since it initially met in 1981 as a part of the AICPA Management for Results Seminar (MFR). Our group continues to have a core membership of 15 CPAs.  Due to pending retirements & other factors, we are interested in adding new members. If you think you might be interested, please read on. NOTE – This is NOT a sales pitch to sell you some product or service.

John

Response:

Question:

In addition to epinions, where is a good place to get word out on on truly dishonest and unresponsive conduct by a resort and some of its accounting staff? – in this case the Wyndham Rose Hall resort in Montego Bay, Jamaica. (my account below).  Thanks —- Six months ago I was there for a week of business conference, and haven’t been there before or since.  This month a phone charge (about 40USD) appeared on my AMEX account for a call I obviously didn’t make (to somewhere in New Jersey).  This doesn’t happen by accident. Now I have to either change my AMEX account or vigilantly scan my bill every month to ensure more charges do not appear.  This is not my only experience to report. While there a business associate left a package for me at the desk (two bottles of liquor).  Of course it was nowhere to be found when I went to pick it up. Then upon checkout I found many extra and redundant charges.  I barely had enough time to argue, have them removed, and make it to the airport on time. Staying at the Wyndham Rose Hall in Montego Bay, Jamaica was by far the worst hospitality experience of my life, and the effects are still coming to my AMEX account. By the way, I called them to ask how the phone charge happened.  They said to send a fax, and someone would get back to me and explain.  I did so just out of curiosity, but of course no response at all. After the bogus phone charge, stolen liquor, extra/redundant charges, and lack of response on this inquiry, I wonder if there is an honest person working at the place. If anyone doubts my claim of dishonest phone charge, I can email a scanned copy of the bill.

Response:

It depends how hell bent you are on getting the word out. Why not register a domain name (wyndhamsucks, wyndhamlies.com etc) and put your report up there? You could put your bill, your transcripts etc. Emailing them the site address might push things along a little bit.

Response:

It’s not a crusade and I certainly don’t have that much time. Re emailing them the site, I couldn’t even get them to respond to my inquiry on bogus phone charge.  I don’t expect them to respond as a better managed property would. But a few posts on sites could alert other visitors.

It depends how hell bent you are on getting the word out. Why not register a domain name (wyndhamsucks, wyndhamlies.com etc) and put your report up there? You could put your bill, your transcripts etc. Emailing them the site address might push things along a little bit.

Response:

The Southern Region Chapter of the American Sociaty of Travel Agents (ASTA) just completed their conference there, haven’t heard of complaints…

Response:

I do not suggest every person or group has experiences like mine, nor do I think my experiences were isolated incidents. Also I would suspect they would be on their best behavior with such a group, no?

The Southern Region Chapter of the American Sociaty of Travel Agents (ASTA) just completed their conference there, haven’t heard of complaints…

Response:

Welcome to Jamaica Mon ! We fix problem soon mon!  No problem mon!

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Question:

Hello, I’ve been reading this forum for awhile and I have some questions.

Second thoughts. (1) Nothing stops one from looking for another job while they are still employed.  Go fishing, see what you catch. (2) You can always write up a business plan and try to attempt fulfillment as a second job. — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

Thank You easy 2000 for your responses. One question though. Are you saying that entry level positions in public accounting pay 35000-45000 ?  Where the heck is this ?  I’ve interviewed for entry level positions in accounting and was offerred two of them. Both payed low 20’s. – Hide quoted text — Show quoted text – Hello, I’ve been reading this forum for awhile and I have some questions. You will get general answers, lots of opinions and maybe one or two gems among the rubble. Is it possible for someone to make a decent living in accounting without having to work in public accounting first ?  Is it still Yes. possible for someone to take their accounting knowledge and start their own business ? I just met someone recently who never worked in Yes. public accounting yet started working for himself 15 years ago. He does tax work, payroll work but also does notary work and helps people with their drivers licenses. He does not do bookeeping for companies and he is not a C.P.A. Yet he does fairly well, and has hundreds of clients. He provides a service which his clients find valuable. I currently do accounting work for a non-profit organization and am looking to get out of this area. What I don’t want is to go into public accounting. I have heard too many stories of how terrible of a place this is to work anymore. I’ve heard that new hires are treated poorly, and that it takes years to make a decent living in public accounting. And that’s if you can even stand it. If $35,000 to $45,000 for an entry level position is not "a decent living" then you are correct. I have deciced to look for an accounting job in two areas. Either for You should either learn to spell or to use a spell checker. It will help with the job search. a private company, or perhaps to try and work for myself. I know it won’t be easy to work for myself at first and that in the first few years the money may be tight. What I am having a hard time doing is deciding on what things I can do in accounting for myself that will enable me to make a living. The first thing you need to do is answer the question, "What are my strengths and weaknesses?" If you cannot do that effectively, you will not succeed. One thing I have going for me is that my brother is a very successful stockbroker with several years in the field and tons of clients. I see this as a possible advantage in finding eventual tax work to do if he refers them to me. Do you see this as an advantage also ? If your brother refers tax clients to you, it had better be because you are an excellent tax accountant. Otherwise, he will lose his clients. If you are good at what you do, having a ready source of referrals would be a good thing. I guess I also view C.P.A. firms as being overrated and overpriced for some clients who may not necesarily need to use their services when they can go to someone who won’t charge as much. Am I making sense ? That is probably true – for some clients. However, if you start a tax practice by trying to compete on price, H&R Block will beat you into the dirt. Face down. Go back and look at the guy who has worked for himself for 15 years and is successful. He almost certainly became successful by providing good, valuable service at a fair price, not the lowest price. I guess what I am basically saying is whether my idea of working in accounting for myself is realistic. Also, if I do pursue this, what are the services that I will have to provide to make a decent living doing this ? What advice do you have ? I have no idea how realistic an idea it is for you. That you don’t have a pretty good idea of the services you would be providing makes me somewhat skeptical. In any event, you will not get the answers to that question here. Maybe your brother or that successful guy you know can provide some insights. When I say decent living, I don’t mean a ton of money. I consider workplace flexibility and ability to control my job as huge benefits. If I could make 30 or 40 grand and work for myself I would be happy. I guess $35,000 to $45,000 is a decent living after all. I wouldn’t call an entry level job in public accounting as one with that provided the new hire a lot of flexibility or ability to control the job. However, most entry level positions lack those characteristics. Please give me your thoughts. If you think working for yourself and being successful will be easier than working for someone else, you are mistaken. Most start up businesses fail. The small business people I know who were successful worked their asses off – long hours with lots of stress. easy2000

Response:

Hello, I’ve been reading this forum for awhile and I have some questions. Is it possible for someone to make a decent living in accounting without having to work in public accounting first ?  Is it still possible for someone to take their accounting knowledge and start their own business ? I just met someone recently who never worked in public accounting yet started working for himself 15 years ago. He does tax work, payroll work but also does notary work and helps people with their drivers licenses. He does not do bookeeping for companies and he is not a C.P.A. Yet he does fairly well, and has hundreds of clients. I currently do accounting work for a non-profit organization and am looking to get out of this area. What I don’t want is to go into public accounting. I have heard too many stories of how terrible of a place this is to work anymore. I’ve heard that new hires are treated poorly, and that it takes years to make a decent living in public accounting. And that’s if you can even stand it. I have deciced to look for an accounting job in two areas. Either for a private company, or perhaps to try and work for myself. I know it won’t be easy to work for myself at first and that in the first few years the money may be tight. What I am having a hard time doing is deciding on what things I can do in accounting for myself that will enable me to make a living. One thing I have going for me is that my brother is a very successful stockbroker with several years in the field and tons of clients. I see this as a possible advantage in finding eventual tax work to do if he refers them to me. Do you see this as an advantage also ? I guess I also view C.P.A. firms as being overrated and overpriced for some clients who may not necesarily need to use their services when they can go to someone who won’t charge as much. Am I making sense ? I guess what I am basically saying is whether my idea of working in accounting for myself is realistic. Also, if I do pursue this, what are the services that I will have to provide to make a decent living doing this ? What advice do you have ? When I say decent living, I don’t mean a ton of money. I consider workplace flexibility and ability to control my job as huge benefits. If I could make 30 or 40 grand and work for myself I would be happy. Please give me your thoughts. Thank You

Response:

Hello, I’ve been reading this forum for awhile and I have some questions.

You will get general answers, lots of opinions and maybe one or two gems among the rubble. Is it possible for someone to make a decent living in accounting without having to work in public accounting first ?  Is it still

Yes. possible for someone to take their accounting knowledge and start their own business ? I just met someone recently who never worked in

Yes. public accounting yet started working for himself 15 years ago. He does tax work, payroll work but also does notary work and helps people with their drivers licenses. He does not do bookeeping for companies and he is not a C.P.A. Yet he does fairly well, and has hundreds of clients.

He provides a service which his clients find valuable. I currently do accounting work for a non-profit organization and am looking to get out of this area. What I don’t want is to go into public accounting. I have heard too many stories of how terrible of a place this is to work anymore. I’ve heard that new hires are treated poorly, and that it takes years to make a decent living in public accounting. And that’s if you can even stand it.

If $35,000 to $45,000 for an entry level position is not "a decent living" then you are correct. I have deciced to look for an accounting job in two areas. Either for

You should either learn to spell or to use a spell checker. It will help with the job search. a private company, or perhaps to try and work for myself. I know it won’t be easy to work for myself at first and that in the first few years the money may be tight. What I am having a hard time doing is deciding on what things I can do in accounting for myself that will enable me to make a living.

The first thing you need to do is answer the question, "What are my strengths and weaknesses?" If you cannot do that effectively, you will not succeed. One thing I have going for me is that my brother is a very successful stockbroker with several years in the field and tons of clients. I see this as a possible advantage in finding eventual tax work to do if he refers them to me. Do you see this as an advantage also ?

If your brother refers tax clients to you, it had better be because you are an excellent tax accountant. Otherwise, he will lose his clients. If you are good at what you do, having a ready source of referrals would be a good thing. I guess I also view C.P.A. firms as being overrated and overpriced for some clients who may not necesarily need to use their services when they can go to someone who won’t charge as much. Am I making sense ?

That is probably true – for some clients. However, if you start a tax practice by trying to compete on price, H&R Block will beat you into the dirt. Face down. Go back and look at the guy who has worked for himself for 15 years and is successful. He almost certainly became successful by providing good, valuable service at a fair price, not the lowest price. I guess what I am basically saying is whether my idea of working in accounting for myself is realistic. Also, if I do pursue this, what are the services that I will have to provide to make a decent living doing this ? What advice do you have ?

I have no idea how realistic an idea it is for you. That you don’t have a pretty good idea of the services you would be providing makes me somewhat skeptical. In any event, you will not get the answers to that question here. Maybe your brother or that successful guy you know can provide some insights. When I say decent living, I don’t mean a ton of money. I consider workplace flexibility and ability to control my job as huge benefits. If I could make 30 or 40 grand and work for myself I would be happy.

I guess $35,000 to $45,000 is a decent living after all. I wouldn’t call an entry level job in public accounting as one with that provided the new hire a lot of flexibility or ability to control the job. However, most entry level positions lack those characteristics. Please give me your thoughts.

If you think working for yourself and being successful will be easier than working for someone else, you are mistaken. Most start up businesses fail. The small business people I know who were successful worked their asses off – long hours with lots of stress. easy2000

Response:

Thanks again for your help Ron. I saw that one of the other posters in this thread has been critical of you. I don’t share that view. Your advice has been very helpful to me and I appreciate it.

Good luck, Mike. You’re going to need it. easy2000

Response:

Thanks again for your help Ron. I saw that one of the other posters in this thread has been critical of you. I don’t share that view. Your advice has been very helpful to me and I appreciate it. – Hide quoted text — Show quoted text – Another thought,  I fellow named Fox wrote a book on how to start an accounting practice, it should be useful and applicable to what you propose. AIR, Oasis Publishing used to publish books on how to start a business in various states.  I imagine that there are such guides available from other sources. When the Chase Ravel organization ran Entrepreneur Magazine they published business plans on how to set up accounting, bookkeeping, and I think, tax preparation businesses.  If they don’t, their might be something like that still around, I would check Amazon. The SBA has things on starting various types of businesses.  Some of it may be useful. It is far easier to set up these businesses than it is to get and hold clients.  I attended a conference put on by a fellow who had started and sold four practices.  That is all he does now, start a practice, build it to $100k and then sell it for cash.  The whole plan is based on other tax accountants doing a demonstrably bad job on their clients taxes. This is the old "see how much money I can save you" sales pitch.  AIR, he said he could close one to two percent of his sales calls with this. The point was that people are loath to change tax preparers, even if they are getting a rum deal.  So, even if you have a very good idea to get clients, you have to test it.  Just because you have a better service doesn’t mean people will buy it. Hello, I’ve been reading this forum for awhile and I have some questions. Second thoughts. (1) Nothing stops one from looking for another job while they are still employed.  Go fishing, see what you catch. (2) You can always write up a business plan and try to attempt fulfillment as a second job. *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

OK, with that explanation, I interpret as you are using a CPA as a clerk for an attorney. – Hide quoted text — Show quoted text – I find it interesting that you use an attorney instead of a CPA to do your taxes.  I find your reasoning as to why you do this rational.  As I have mentioned before, in California, according to the state MAP report of a couple of years ago, over half of CPA practice fees come from tax work. I think you misunderstood my confusing blathering.  The CPA compiles all the numbers and fills out the forms (taxes).  The Atty reviews both my data and the completed forms to insure a tax exempt entry did not end up on a taxable line. They work together hand in hand so to speak, my CPA and Tax Atty. TTUL Gary

– *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

Another thought,  I fellow named Fox wrote a book on how to start an accounting practice, it should be useful and applicable to what you propose. AIR, Oasis Publishing used to publish books on how to start a business in various states.  I imagine that there are such guides available from other sources. When the Chase Ravel organization ran Entrepreneur Magazine they published business plans on how to set up accounting, bookkeeping, and I think, tax preparation businesses.  If they don’t, their might be something like that still around, I would check Amazon. The SBA has things on starting various types of businesses.  Some of it may be useful. It is far easier to set up these businesses than it is to get and hold clients.  I attended a conference put on by a fellow who had started and sold four practices.  That is all he does now, start a practice, build it to $100k and then sell it for cash.  The whole plan is based on other tax accountants doing a demonstrably bad job on their clients taxes. This is the old "see how much money I can save you" sales pitch.  AIR, he said he could close one to two percent of his sales calls with this. The point was that people are loath to change tax preparers, even if they are getting a rum deal.  So, even if you have a very good idea to get clients, you have to test it.  Just because you have a better service doesn’t mean people will buy it. Hello, I’ve been reading this forum for awhile and I have some questions. Second thoughts. (1) Nothing stops one from looking for another job while they are still employed.  Go fishing, see what you catch. (2) You can always write up a business plan and try to attempt fulfillment as a second job.

*             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

I find it interesting that you use an attorney instead of a CPA to do your taxes.  I find your reasoning as to why you do this rational.  As I have mentioned before, in California, according to the state MAP report of a couple of years ago, over half of CPA practice fees come from tax work.

I think you misunderstood my confusing blathering.  The CPA compiles all the numbers and fills out the forms (taxes).  The Atty reviews both my data and the completed forms to insure a tax exempt entry did not end up on a taxable line. They work together hand in hand so to speak, my CPA and Tax Atty. TTUL Gary

Response:

You seem to have a behavioral problem, or possibly a chemical imbalance, have you sought counseling yet?  I am sure you could benefit from it. – Hide quoted text — Show quoted text – Ron, thank you very much for all the advice and insight you gave me. I am confused about which way to go right now, and I’m trying to find my way and put myself in the right direction. Your posts are great because they’re to the point and after some of the BS I’ve been given about accounting, it’s great to get some real world advice even though it may not be totally pleasant. Thanks, Ron. You need to understand, Mike, that if RT had gotten a degree in library science, he would now be bad mouthing jobs and the job market for librarians. Ditto for being a newspaper reporter if his degree was in journalism. Same-same for designing buildings if he had trained as an architect. easy2000

– *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

If you have the resources (nice weasel word), set a goal and take the plunge.  Find a market YOU THINK has potential, and write up and execute a business plan.  Just remember to include a safety net on your business plan so you have an out if it fails.  If you try a tax practice, remember you can USUALLY sell the accounts you have if it fails.  ( I think the figure is something like 9 our of 10 startups fail in their first three years. ) Read the "What color is your parachute" book. Talk to other people, in your geographical area, who are doing things similar to what you think you want to do. Good luck. Ron, thank you very much for all the advice and insight you gave me. I am confused about which way to go right now, and I’m trying to find my way and put myself in the right direction.

… — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

I find it interesting that you use an attorney instead of a CPA to do your taxes.  I find your reasoning as to why you do this rational.  As I have mentioned before, in California, according to the state MAP report of a couple of years ago, over half of CPA practice fees come from tax work. … quarterly report, but only after he coordinates with my tax attorney and they go over all my records together.

… — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

Ron, thank you very much for all the advice and insight you gave me. I am confused about which way to go right now, and I’m trying to find my way and put myself in the right direction. Your posts are great because they’re to the point and after some of the BS I’ve been given about accounting, it’s great to get some real world advice even though it may not be totally pleasant. Thanks, Ron. – Hide quoted text — Show quoted text – Ron, thanks for your advice and insight. Do you mind if I ask you to detail all of the experience you have had in accounting ?  How long ago did you graduate from college ? OK, but just take anything I say with a grain of salt.  Everyone has to run their own life.  What works for some, works none others. I graduated from C.S.U., Fresno in 1977. They also push public accounting above all else. The majority of people I’ve known who worked in pubic accounting got out after a few years and got another accounting job or worked in finance. The very cynical view is that they have tenured employees that they have to keep employed.  No students, no jobs.  The thing I’ve noted is that the schools of business have been very careful NOT to do a study of the long term follow up of their students careers. When I graduated, the state was in recession.  I think very few of the students got offers with public accounting or anything else.  I recall one person got an offer with Hasken & Sells in L.A., BUT, I think that was on a personal recommendation from the auditing professor who used to work for H&S. As you can see, I have a negative attitude towards public accounting and would like to avoid it as much as I can. My plan is that I would I worked one tax season for a public accountant.  In retrospect, I am amazed I got the job as I was 31 when I graduated and public accountants are more famous for age discrimination than lawyers.  After about a week, I figured he was running a collapsing bag for a practice.  My diagnosis was later confirmed.  Since then, I’ve found most public accountants to be rather poor businessmen, and not something I would particularly want to be associated with.  I have found one fellow, who is sitting on a gold mine.  I believe he has the keys to a niche that would turn into a million dollar practice.  Unfortunately, he cannot see the riches under his feet. I then got into federal government accounting and auditing.  I like federal government auditing, it seems to be about the only area left where you can take the time necessary to develop and audit finding.  It also seems to be the last area where the managers will let you have a finding. still like to work in the accounting field in some form while avoiding public accounting. That is why I asked the questions I did about working for myself. You see, I’ve always liked taxes more than anything else as far as accounting is concerned. For all practical purposes, if your doing taxes, your doing what public accounting now is.  If this is what you want, you might as well get the EA. I don’t really like bookeeping work as a general rule. That is why I’m exploring the idea of starting a business mostly based in tax work and possibly some other services. The fact that my brother is a very successful stockbroker with loads of clients made me think about whether I could take advantage to this or not. I know that he would only refer anyone to me if I was good and I would not expect him to refer anyone if I was sub-par. People do it. You might want to pick up one of the MS Tax degrees that are floating around from the various schools. The thing I not is that H&R Block is pushing up from the bottom, getting its people to pass the EA exam.  Big firms are looking down to smaller clients to get volume.  Entry into tax preparation is not restricted as are audit and law.  I see a lot of competition out there for clients. Around here it is already fierce. So I guess what I’m thinking about is the best way for me to get the experience to become a good enough tax consultant that my brother would have no problem referring people to me. A good number of these clients he has are loaded. Each journey begins with a single step.  In California, you take twenty hours of instructions, usually the H&R Block course, and then start soliciting people to do their tax returns.  Once you get the first tax client, you ask them for a referral. I can also tell you that my brother is someone who does not have loads of respect for CPA’s and thinks they are overrated. So if I was good then I know he would refer clients to me if he thought I could do good work for them. It is dangerous to over generalize.  Some CPAs are very good at what they do.    I have been offerred two jobs in the past in public accounting. In one of these instances, it became very obvious to me that they were mostly interested in me because they knew who my brother was and they probably thought I could bring them some real business sometime down the road. Well, you could take the job for the tax season, which may be all they are actually offering anyway.  Study very hard, keep you eyes open and see how a tax practice is run.  Then go out on your own.  Or something else.  You have to come up with your own business plan.  I considered tax around here and it didn’t look like a very good market.   I’ve interiewed with several …. Interviews really don’t mean much, people will say anything these days. If you can get a job great.  The best source of jobs is a personal referral from someone else.  Read Bowels "What color is your parachute" sometime.  He is the only person I know of who has actually looked into how the job hiring process works. Good luck on what ever you decided to do. … — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

Thanks for sharing your experience and insight with me, Gary. I’m confused about which way to go right now, so posts like yours and others really help me as I’m figuring out what to do. Thanks again. – Hide quoted text — Show quoted text – Hi Mike From a customers point of view. Although I read this newsgroup every single day to keep abreast of whats going on in the accounting world, I’m not an accountant, just a businessperson who spends a good part of my day keeping the companies records.  I consider it a necessary evil, an unprofitable dent in my daily work schedule.  But at the same time, how I keep a handle on what’s going on in my business. I use QuickBooks Pro and have it set up a little unorthodox, perhaps even confusing to some accountants and CPA’s who first look at it. But once they familarize themselves with my personal method, they really like the wealth of information that can be obtained through it. Now on to your questions. My businesses are primarily real estate investing and various manufactured products, including chemical packaging. Both of these lines of work entail many special reports and enough bookwork up the wazoo to choke an elephant. My neck is the one on the line, so I don’t trust any outside person to make the data entries in my accounting program.  However, I have a CPA that double checks all of my entries for the week and compiles my quarterly report, but only after he coordinates with my tax attorney and they go over all my records together. I don’t expect my CPA to keep abreast of the rapidly changing tax laws that govern my businesses, by the same token, I don’t expect my tax attorney to be adept at keeping all the numbers in the right columns, if you catch my drift. Now I can’t afford to have a permanent CPA by any stretch of the imagination, and I also don’t want to overpay for someone to ‘fill in the forms’ the government requires, nor do I want to take the time to keep abreast of what the government wants ‘this quarter’. I can trust QuickBooks to crunch the numbers correctly, provided I made the entries in the right columns.  So what do I have a CPA for? To make sure those numbers are in the right columns, and transfer the totals to some government form, basically, that’s all.  So, what is that worth in dollars and cents?  Not much!  If I felt I was paying too much, I would rather spend the time to fill in the forms myself. I pay much more to my tax attorney for basically checking the papers, than I do to the CPA for filling them out.  Why?  Because the tax attorney is the one who structures my program to take advantage of the loopholes and will appear in court if he makes a mistake.  He will also pay any penalty incurred if the mistake was his.  He also notifies me instantly when there is a change in the law that affects the way my data is entered, or the manner in which I conduct business. In other words, without him, certain taxes could be as high as twenty, forty or even sixty-thousand dollars in some years, instead, the particular tax of which I’m speaking is zero. Most CPA’s only crunch the numbers provided to them, they don’t keep abreast of the tax loopholes for each of their customers, nor in many cases understand a persons business well enough to know that by doing things a certain way and under certain conditions, specific taxes are avoided.  Although there may be some specialized CPA’s that do go to this extra trouble.  But not being an attorney, what if they are wrong?  Their client will be the one who suffers the consequences. If you prefer working within the field of taxes, why not teem up with a tax attorney and let him provide you with the clients.  This will allow you to charge a slightly higher rate and be able to pick-up a higher clientelle than perhaps would otherwise not be as likely.  Plus you won’t be as swamped at tax time, while enjoying a higher pay for your work. My old non-tax coordinating CPA’s current rate is only about one-hundred bucks to fill out the yearly reports.  The new one that coordinates with my tax attorney charges almost three times that amount and it’s well worth the extra cost.  Needless to say, I’m also invoiced by the tax attorney for the time he spends with my CPA. The only difference between the two CPA’s actual workload, is the extra time spent by the latter in walking down the hall for 15 minutes and perhaps moving some expensed items into the COGS columns or taking some misplaced income and applying it to the non-taxed area where it belongs.  But these little things add up to big dollars, usually more than the extra fees the new CPA charges me.  I would rather pay him more and Uncle Sam less, at least I know it will be better used! TTUL Gary

Response:

Ron, thanks for your advice and insight. Do you mind if I ask you to detail all of the experience you have had in accounting ?  How long ago did you graduate from college ?

OK, but just take anything I say with a grain of salt.  Everyone has to run their own life.  What works for some, works none others. I graduated from C.S.U., Fresno in 1977. They also push public accounting above all else. The majority of people I’ve known who worked in pubic accounting got out after a few years and got another accounting job or worked in finance.

The very cynical view is that they have tenured employees that they have to keep employed.  No students, no jobs.  The thing I’ve noted is that the schools of business have been very careful NOT to do a study of the long term follow up of their students careers. When I graduated, the state was in recession.  I think very few of the students got offers with public accounting or anything else.  I recall one person got an offer with Hasken & Sells in L.A., BUT, I think that was on a personal recommendation from the auditing professor who used to work for H&S. As you can see, I have a negative attitude towards public accounting and would like to avoid it as much as I can. My plan is that I would

I worked one tax season for a public accountant.  In retrospect, I am amazed I got the job as I was 31 when I graduated and public accountants are more famous for age discrimination than lawyers.  After about a week, I figured he was running a collapsing bag for a practice.  My diagnosis was later confirmed.  Since then, I’ve found most public accountants to be rather poor businessmen, and not something I would particularly want to be associated with.  I have found one fellow, who is sitting on a gold mine.  I believe he has the keys to a niche that would turn into a million dollar practice.  Unfortunately, he cannot see the riches under his feet. I then got into federal government accounting and auditing.  I like federal government auditing, it seems to be about the only area left where you can take the time necessary to develop and audit finding.  It also seems to be the last area where the managers will let you have a finding. still like to work in the accounting field in some form while avoiding public accounting. That is why I asked the questions I did about working for myself. You see, I’ve always liked taxes more than anything else as far as accounting is concerned.

For all practical purposes, if your doing taxes, your doing what public accounting now is.  If this is what you want, you might as well get the EA. I don’t really like bookeeping work as a general rule. That is why I’m exploring the idea of starting a business mostly based in tax work and possibly some other services. The fact that my brother is a very successful stockbroker with loads of clients made me think about whether I could take advantage to this or not. I know that he would only refer anyone to me if I was good and I would not expect him to refer anyone if I was sub-par.

People do it. You might want to pick up one of the MS Tax degrees that are floating around from the various schools. The thing I not is that H&R Block is pushing up from the bottom, getting its people to pass the EA exam.  Big firms are looking down to smaller clients to get volume.  Entry into tax preparation is not restricted as are audit and law.  I see a lot of competition out there for clients. Around here it is already fierce. So I guess what I’m thinking about is the best way for me to get the experience to become a good enough tax consultant that my brother would have no problem referring people to me. A good number of these clients he has are loaded.

Each journey begins with a single step.  In California, you take twenty hours of instructions, usually the H&R Block course, and then start soliciting people to do their tax returns.  Once you get the first tax client, you ask them for a referral. I can also tell you that my brother is someone who does not have loads of respect for CPA’s and thinks they are overrated. So if I was good then I know he would refer clients to me if he thought I could do good work for them.

It is dangerous to over generalize.  Some CPAs are very good at what they do.    I have been offerred two jobs in the past in public accounting. In one of these instances, it became very obvious to me that they were mostly interested in me because they knew who my brother was and they probably thought I could bring them some real business sometime down the road.

Well, you could take the job for the tax season, which may be all they are actually offering anyway.  Study very hard, keep you eyes open and see how a tax practice is run.  Then go out on your own.  Or something else.  You have to come up with your own business plan.  I considered tax around here and it didn’t look like a very good market.   I’ve interiewed with several ….

Interviews really don’t mean much, people will say anything these days. If you can get a job great.  The best source of jobs is a personal referral from someone else.  Read Bowels "What color is your parachute" sometime.  He is the only person I know of who has actually looked into how the job hiring process works. Good luck on what ever you decided to do. … — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

Hi Mike From a customers point of view. Although I read this newsgroup every single day to keep abreast of whats going on in the accounting world, I’m not an accountant, just a businessperson who spends a good part of my day keeping the companies records.  I consider it a necessary evil, an unprofitable dent in my daily work schedule.  But at the same time, how I keep a handle on what’s going on in my business. I use QuickBooks Pro and have it set up a little unorthodox, perhaps even confusing to some accountants and CPA’s who first look at it. But once they familarize themselves with my personal method, they really like the wealth of information that can be obtained through it. Now on to your questions. My businesses are primarily real estate investing and various manufactured products, including chemical packaging. Both of these lines of work entail many special reports and enough bookwork up the wazoo to choke an elephant. My neck is the one on the line, so I don’t trust any outside person to make the data entries in my accounting program.  However, I have a CPA that double checks all of my entries for the week and compiles my quarterly report, but only after he coordinates with my tax attorney and they go over all my records together. I don’t expect my CPA to keep abreast of the rapidly changing tax laws that govern my businesses, by the same token, I don’t expect my tax attorney to be adept at keeping all the numbers in the right columns, if you catch my drift. Now I can’t afford to have a permanent CPA by any stretch of the imagination, and I also don’t want to overpay for someone to ‘fill in the forms’ the government requires, nor do I want to take the time to keep abreast of what the government wants ‘this quarter’. I can trust QuickBooks to crunch the numbers correctly, provided I made the entries in the right columns.  So what do I have a CPA for? To make sure those numbers are in the right columns, and transfer the totals to some government form, basically, that’s all.  So, what is that worth in dollars and cents?  Not much!  If I felt I was paying too much, I would rather spend the time to fill in the forms myself. I pay much more to my tax attorney for basically checking the papers, than I do to the CPA for filling them out.  Why?  Because the tax attorney is the one who structures my program to take advantage of the loopholes and will appear in court if he makes a mistake.  He will also pay any penalty incurred if the mistake was his.  He also notifies me instantly when there is a change in the law that affects the way my data is entered, or the manner in which I conduct business. In other words, without him, certain taxes could be as high as twenty, forty or even sixty-thousand dollars in some years, instead, the particular tax of which I’m speaking is zero. Most CPA’s only crunch the numbers provided to them, they don’t keep abreast of the tax loopholes for each of their customers, nor in many cases understand a persons business well enough to know that by doing things a certain way and under certain conditions, specific taxes are avoided.  Although there may be some specialized CPA’s that do go to this extra trouble.  But not being an attorney, what if they are wrong?  Their client will be the one who suffers the consequences. If you prefer working within the field of taxes, why not teem up with a tax attorney and let him provide you with the clients.  This will allow you to charge a slightly higher rate and be able to pick-up a higher clientelle than perhaps would otherwise not be as likely.  Plus you won’t be as swamped at tax time, while enjoying a higher pay for your work. My old non-tax coordinating CPA’s current rate is only about one-hundred bucks to fill out the yearly reports.  The new one that coordinates with my tax attorney charges almost three times that amount and it’s well worth the extra cost.  Needless to say, I’m also invoiced by the tax attorney for the time he spends with my CPA. The only difference between the two CPA’s actual workload, is the extra time spent by the latter in walking down the hall for 15 minutes and perhaps moving some expensed items into the COGS columns or taking some misplaced income and applying it to the non-taxed area where it belongs.  But these little things add up to big dollars, usually more than the extra fees the new CPA charges me.  I would rather pay him more and Uncle Sam less, at least I know it will be better used! TTUL Gary

Response:

Thank You easy 2000 for your responses. One question though. Are you saying that entry level positions in public accounting pay 35000-45000 ?  Where the heck is this ?  I’ve interviewed for entry level positions in accounting and was offerred two of them. Both payed low 20’s.

Entry level jobs in public accounting and a state auditor’s staff for graduates of a small,  relatively unknown accounting program. You have to pay something to make up for that lack of flexibility and job control. I forgot to mention that a couple of years with a regional to international CPA firm is still a good way to get the experience other employers want in their new hires. easy2000

Response:

Ron, thanks for your advice and insight. Do you mind if I ask you to detail all of the experience you have had in accounting ?  How long ago did you graduate from college ? I do know that colleges still tout accounting as a hot field to get into. They also push public accounting above all else. The majority of people I’ve known who worked in pubic accounting got out after a few years and got another accounting job or worked in finance. Do you think it is a true statement that public accounting firms basically shovel as much work as possible to new hires in order to make the partners even richer ? As you can see, I have a negative attitude towards public accounting and would like to avoid it as much as I can. My plan is that I would still like to work in the accounting field in some form while avoiding public accounting. That is why I asked the questions I did about working for myself. You see, I’ve always liked taxes more than anything else as far as accounting is concerned. I don’t really like bookeeping work as a general rule. That is why I’m exploring the idea of starting a business mostly based in tax work and possibly some other services. The fact that my brother is a very successful stockbroker with loads of clients made me think about whether I could take advantage to this or not. I know that he would only refer anyone to me if I was good and I would not expect him to refer anyone if I was sub-par. So I guess what I’m thinking about is the best way for me to get the experience to become a good enough tax consultant that my brother would have no problem referring people to me. A good number of these clients he has are loaded. I can also tell you that my brother is someone who does not have loads of respect for CPA’s and thinks they are overrated. So if I was good then I know he would refer clients to me if he thought I could do good work for them. I spoke above in my post to Easy2000 about the fact that I have been offerred two jobs in the past in public accounting. In one of these instances, it became very obvious to me that they were mostly interested in me because they knew who my brother was and they probably thought I could bring them some real business sometime down the road. I’ve interiewed with several other accounting jobs in industry and haven’t had any offers. In two instances, the person in charge of hiring let me know straight out that I came in second, it that was my lack of a CPA and the corresponding CPA firm experience that made me come up short. I also interviewed with a local government office for a job in the tax collection department. I was told in this instance too that I did not have the right kind of experience for the job that they were looking for. Ron, I really appreciate your thoughts on all this. I’m sorry you have had such problems in accounting. – Hide quoted text — Show quoted text – Hello, I’ve been reading this forum for awhile and I have some questions. Is it possible for someone to make a decent living in accounting without having to work in public accounting first ?  Is it still possible for someone to take their accounting knowledge and start their own business ? I just met someone recently who never worked in public accounting yet started working for himself 15 years ago. He does tax work, payroll work but also does notary work and helps people with their drivers licenses. He does not do bookeeping for companies and he is not a C.P.A. Yet he does fairly well, and has hundreds of clients. Anything is possible.  I imagine someone has struck a match on a wet bar of soap.  Making a decent living as a professional, $70k usd, in accounting from a cold start is very difficult if not impossible in these days. I currently do accounting work for a non-profit organization and am looking to get out of this area. What I don’t want is to go into public accounting. I have heard too many stories of how terrible of a place this is to work anymore. I’ve heard that new hires are treated poorly, and that it takes years to make a decent living in public accounting. And that’s if you can even stand it. That is exactly what I have observed.  Unless you inherit a practice you have to take existing clients from established firms.  This is a very difficult procedure. I have deciced to look for an accounting job in two areas. Either for a private company, or perhaps to try and work for myself. I know it won’t be easy to work for myself at first and that in the first few years the money may be tight. What I am having a hard time doing is deciding on what things I can do in accounting for myself that will enable me to make a living. Both areas are filled and there are loads of experienced accountants competing for  very few openings.  Unless you have contacts, or some other attribute that is in high demand, it is impossible to get a job. One thing I have going for me is that my brother is a very successful stockbroker with several years in the field and tons of clients. I see this as a possible advantage in finding eventual tax work to do if he refers them to me. Do you see this as an advantage also ? I see that as an exploitable advantage.  Whether or not it can be exploited would have to be tested.  Generally, those type of clients who need external tax advice, would have tax prepares.  Again, it would be the task of breaking the client loose from an existing tax accountant. You would have to show the client that you could do a better job. I guess I also view C.P.A. firms as being overrated and overpriced for some clients who may not necesarily need to use their services when they can go to someone who won’t charge as much. Am I making sense ? The best client is the one who doesn’t know the alternatives and will pay any fee.  There seem to be quite a few out there, although I think there are less now than there were before the Financial News Network came on cable. I guess what I am basically saying is whether my idea of working in accounting for myself is realistic. Also, if I do pursue this, what are the services that I will have to provide to make a decent living doing this ? What advice do you have ? I have had few interviews and no offers in almost six years.  As far as trying to get those interviews, I told two local firms that I would work for minimum wage and asked them if they would like me to come in for an interview, one said no, the other ignored the resume. All the people who say accounting is great have an alternative reason for trying to preserve the present glut of accountants.  College professors lie because they need students to keep their jobs, CPAs lie because they want a glut of smart graduates so they can pay cheap salaries.   Here is the test.  Anytime someone tells you that there is a shortage and a good future in accounting, demand they show you the job.  They can’t, they don’t exist. When I say decent living, I don’t mean a ton of money. I consider workplace flexibility and ability to control my job as huge benefits. If I could make 30 or 40 grand and work for myself I would be happy. As I have said, I have been denied interviews at $12k usd per anum and would be very happy to work for $20k.  The jobs are out there.  The only thing I’ve found is a bunch of self serving liars. — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

Hello, I’ve been reading this forum for awhile and I have some questions. Is it possible for someone to make a decent living in accounting without having to work in public accounting first ?  Is it still possible for someone to take their accounting knowledge and start their own business ? I just met someone recently who never worked in public accounting yet started working for himself 15 years ago. He does tax work, payroll work but also does notary work and helps people with their drivers licenses. He does not do bookeeping for companies and he is not a C.P.A. Yet he does fairly well, and has hundreds of clients.

Anything is possible.  I imagine someone has struck a match on a wet bar of soap.  Making a decent living as a professional, $70k usd, in accounting from a cold start is very difficult if not impossible in these days. I currently do accounting work for a non-profit organization and am looking to get out of this area. What I don’t want is to go into public accounting. I have heard too many stories of how terrible of a place this is to work anymore. I’ve heard that new hires are treated poorly, and that it takes years to make a decent living in public accounting. And that’s if you can even stand it.

That is exactly what I have observed.  Unless you inherit a practice you have to take existing clients from established firms.  This is a very difficult procedure. I have deciced to look for an accounting job in two areas. Either for a private company, or perhaps to try and work for myself. I know it won’t be easy to work for myself at first and that in the first few years the money may be tight. What I am having a hard time doing is deciding on what things I can do in accounting for myself that will enable me to make a living.

Both areas are filled and there are loads of experienced accountants competing for  very few openings.  Unless you have contacts, or some other attribute that is in high demand, it is impossible to get a job. One thing I have going for me is that my brother is a very successful stockbroker with several years in the field and tons of clients. I see this as a possible advantage in finding eventual tax work to do if he refers them to me. Do you see this as an advantage also ?

I see that as an exploitable advantage.  Whether or not it can be exploited would have to be tested.  Generally, those type of clients who need external tax advice, would have tax prepares.  Again, it would be the task of breaking the client loose from an existing tax accountant. You would have to show the client that you could do a better job. I guess I also view C.P.A. firms as being overrated and overpriced for some clients who may not necesarily need to use their services when they can go to someone who won’t charge as much. Am I making sense ?

The best client is the one who doesn’t know the alternatives and will pay any fee.  There seem to be quite a few out there, although I think there are less now than there were before the Financial News Network came on cable. I guess what I am basically saying is whether my idea of working in accounting for myself is realistic. Also, if I do pursue this, what are the services that I will have to provide to make a decent living doing this ? What advice do you have ?

I have had few interviews and no offers in almost six years.  As far as trying to get those interviews, I told two local firms that I would work for minimum wage and asked them if they would like me to come in for an interview, one said no, the other ignored the resume. All the people who say accounting is great have an alternative reason for trying to preserve the present glut of accountants.  College professors lie because they need students to keep their jobs, CPAs lie because they want a glut of smart graduates so they can pay cheap salaries.   Here is the test.  Anytime someone tells you that there is a shortage and a good future in accounting, demand they show you the job.  They can’t, they don’t exist. When I say decent living, I don’t mean a ton of money. I consider workplace flexibility and ability to control my job as huge benefits. If I could make 30 or 40 grand and work for myself I would be happy.

As I have said, I have been denied interviews at $12k usd per anum and would be very happy to work for $20k.  The jobs are out there.  The only thing I’ve found is a bunch of self serving liars. — *             Ronald Lee Todd M.B.A., C.P.A.                  * *  Unemployed for five years, mistake of being an accountant. * *    From the Socialist People’s Republic of Kalifornia,      * *           the Seventh worst state for business,             * *                   Ayn Rand was right                        *

Response:

Question:

 And I still don’t know if I should incorporate to save on taxes.

Probably not. The savings are not large, there is some hassle, and distributions in lieu of wages are definitely not "IRS approved". — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners

Response:

- Hide quoted text — Show quoted text –  And I still don’t know if I should incorporate to save on taxes. Probably not. The savings are not large, there is some hassle, and distributions in lieu of wages are definitely not "IRS approved". — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners

In addition you have the additional cost of maintaining the corporation and filing annual tax returns etc. You can do the return yourself but is isn’t easy and if you pay someone to prepare the return, the 1120S will cost a good bit more than a schedule C. Also in Texas if don’t take the profit out as wages, the profit left in the corporation is subject to the 4.5% (of income) franchise tax. Also some states have a high minimum franchise tax/annual registration fee for corporations. I don’t recommend incorporation in the situation described above. Also the basic purpose of incorporation is not to save taxes. Primary reasons are obtaining capital from more than one investor, liability limitations and continuity of life.

Response:

As provided for by the TX legislature last year, if a corp’s combined equity and gross receipts are less than $150,000 (beginning for cal. yr. 2000), there is no franchise (read income tax) due. I don’t know whether it’s been mentioned here or in the tax group, but the audit rate for a corp is considerably less than for a sole prop. This is a major consideration with my clients in their decision making process on whether to incorporate or stay solo. George – Hide quoted text — Show quoted text –  And I still don’t know if I should incorporate to save on taxes. Probably not. The savings are not large, there is some hassle, and distributions in lieu of wages are definitely not "IRS approved". — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners In addition you have the additional cost of maintaining the corporation and filing annual tax returns etc. You can do the return yourself but is isn’t easy and if you pay someone to prepare the return, the 1120S will cost a good bit more than a schedule C. Also in Texas if don’t take the profit out as wages, the profit left in the corporation is subject to the 4.5% (of income) franchise tax. Also some states have a high minimum franchise tax/annual registration fee for corporations. I don’t recommend incorporation in the situation described above. Also the basic purpose of incorporation is not to save taxes. Primary reasons are obtaining capital from more than one investor, liability limitations and continuity of life.

Response:

snip I don’t know whether it’s been mentioned here or in the tax group, but the audit rate for a corp is considerably less than for a sole prop. This is a major consideration with my clients in their decision making process on whether to incorporate or stay solo.

No, it has’t been mentioned, and it is a good point. On the other hand, the audit rate on individuals is now so low that the difference may no longer be significant. — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners

Response:

I don’t know whether it’s been mentioned here or in the tax group, but the audit rate for a corp is considerably less than for a sole prop. This is a major consideration with my clients in their decision making process on whether to incorporate or stay solo. George

There is a systematically lower frequency of audit for complex entities or transaction bases, compared to simple ones having all of the other factors equal.  There is a systematically higher cost in terms of time and resources and anyways IRS’ technical depth is not unlimited.  There is a rational process of resource allocation that takes place in revenue collection (i.e. maximizing revenue over time, for a given compliance resource expenditure) This does not in any way imply that having a complex structure for a transaction will ‘evade tax’.  It just states the fact that if there is a large population (which the US taxpaying public certainly is), and that population has two reservoirs of businesses has the same frequency and magnitude of audit adjustments, viewed historically, but one takes 5 times more resource to audit, then, the complex guys are just not going to get audited as often. * Todd F. Boyle CPA    http://www.GLDialtone.com/ * 9745-128th Av NE, Kirkland WA 98033       (425) 827-3107 * XML accounting, WebLedgers, ASPs, GL dialtone, whatever it takes

Response:

Jim I agree with your method. I would however modify it a bit and ask them how much they would expect to receive if they were to work for someone else Would your approach be the same for an S-Corp with only one employee, and all income generated was from personal services performed by the single employee shareholder, and little or no capital contributions into the Corp? Allan Martin

– Hide quoted text — Show quoted text – David I can’t see how you can justify a 50:50 split between distributions and salary. Using an arbitrary allocation makes no sense. Each situation should be looked at on a case by case basis. How one defines a reasonable salary I must admit can be quite difficult if not impossible. I would argue that if 100 different accountants had to come up with an amount there would be 100 different answers. I ask my clients, "What would you pay someone else to do your job", and press them to put enough time and energy into the answer to where we feel comfortable that THEY could sit across a table from an IRS agent and defend their number. Usually that means going to some outside source – employment agency – trade association – etc. for comparative numbers.  So far I haven’t had a problem with this approach, and I know the IRS has looked at it, though never with any real enthusiasm. From first hand observation I am shocked at how many sole-proprietors incorporate and take the S-Corporation election under the misguided belief that doing so exempts them from paying Social Security Taxes. In many cases these same taxpayers add insult to injury by not reporting the distributions on their personal state tax returns. I practice in Washington, which does not have an income tax.  Most of the state reports (other states) I have had experience with require that S-Corporation profits be reported in the same manner as on the federal return, and do not ask for a reporting of the distributions. — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners

Response:

I can’t see how you can justify a 50:50 split between distributions and salary.

I think he’s arguing that, as a practical matter, if there is virtually any salary the IRS doesn’t tend to raise the issue or carry the case.  Obviously, there would be some cases where it might be clear that the 50/50 split would not be seen as reasonable (the only source of income was the owner’s services and the entity has absolutely no assets of any other sort), but even then the likelihood of challenge drops. As a practical matter, the reason why the IRS will not be as likely to challenge in that case comes more from concern about getting whipsawed in an unrelated C corporation case–if the IRS wins a case that says all earnings of corporation X represented compensation by definition (and that a smaller amount wasn’t reasonable), it could be used in a C corporation case of a similar entity when the IRS was arguing there was unreasonably *HIGH* compensation.

Response:

Jim

snip Would your approach be the same for an S-Corp with only one employee, and all income generated was from personal services performed by the single employee shareholder, and little or no capital contributions into the Corp?

Sort of.  I would still want the discussion. Assuming you have one owner, one employee (same person) and no capital requirement (not exactly the same thing as no capital contribution), the reality is that all income is earned income and therefore should be salary.  As Ed points out in a prior post, however, the IRS would probably not press the issue to it’s logical extreme out of concern that their argument could be used against them in a C-Corp excessive salary case. I look at this type of situation as some combination of crap shoot / horse trade.  The objective is to end up with a livable / defendable position that is financially profitable. I love these situations (when my client has the sense, cents and stomach and for it). — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners

Response:

Once again a case for accounting being an art and not a science.

– Hide quoted text — Show quoted text – Jim snip Would your approach be the same for an S-Corp with only one employee, and all income generated was from personal services performed by the single employee shareholder, and little or no capital contributions into the Corp? Sort of.  I would still want the discussion.

I have to believe the discussion would have a slightly different outcome if the client were a C-Corp. – Hide quoted text — Show quoted text – Assuming you have one owner, one employee (same person) and no capital requirement (not exactly the same thing as no capital contribution), the reality is that all income is earned income and therefore should be salary.  As Ed points out in a prior post, however, the IRS would probably not press the issue to it’s logical extreme out of concern that their argument could be used against them in a C-Corp excessive salary case. I look at this type of situation as some combination of crap shoot / horse trade.  The objective is to end up with a livable / defendable position that is financially profitable. I love these situations (when my client has the sense, cents and stomach and for it). — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners

Response:

So it doesn’t make any sense in terms of taxes to incorporate if your income is less than $76,200? Jerry

– Hide quoted text — Show quoted text – Your FICA/SE tax savings in this specific example for 2000 would be: $26,200 x 12.4% + $50,000 x 2.9% = $4,698.80 You only pay OASDI on the first $76,200 of earnings. Dick K. If your profits are 100k, take 50k salary & 50k distributions.  See what that does to your taxes. So what are my saving going to be like this? Jerry

Response:

Would your approach be the same for an S-Corp with only one employee, and all income generated was from personal services performed by the single employee shareholder, and little or no capital contributions into the

Corp? That is exactly my situation–one employee. And I still don’t know if I should incorporate to save on taxes. Jerry

Response:

I would agree that the cases that I’ve seen the IRS be successful in have involved taking zero salary.  While it doesn’t follow that $1.00 in salary would have changed Spicer Accounting or Radtke’s results, it is possible the courts wouldn’t have been as harsh had some arguably reasonable amount been paid.  Additionally, it also works a lot better the less that is taken out as distributions during the year–that is, if the funds are left in the business, the IRS has a tough time arguing that they were "disguised" salary.  Of course, the problem is that most clients don’t want to do that…

The main thing is the issue would probably never have appeared in the first place in the losing cases had the taxpayers been reasonable.  But they went for broke, and wound up broke!

Response:

Your FICA/SE tax savings in this specific example for 2000 would be: $26,200 x 12.4% + $50,000 x 2.9% = $4,698.80 You only pay OASDI on the first $76,200 of earnings. Dick K.

– Hide quoted text — Show quoted text – If your profits are 100k, take 50k salary & 50k distributions.  See what that does to your taxes. So what are my saving going to be like this? Jerry

Response:

David I can’t see how you can justify a 50:50 split between distributions and salary. Using an arbitrary allocation makes no sense. Each situation should be looked at on a case by case basis. How one defines a reasonable salary I must admit can be quite difficult if not impossible. I would argue that if 100 different accountants had to come up with an amount there would be 100 different answers. From first hand observation I am shocked at how many sole-proprietors incorporate and take the S-Corporation election under the misguided belief that doing so exempts them from paying Social Security Taxes. In many cases these same taxpayers add insult to injury by not reporting the distributions on their personal state tax returns. Allan Martin, CPA

– Hide quoted text — Show quoted text – It can be an appropriate tax saving measure to use the S Corporation as you describe.  Many CPAs and attorneys will disagree, but this is a tactic I have used with many, many corporations over the years and NEVER have I had a problem with it. What I do, though, is to be absolutely certain that the shareholder takes some salary.  As a guideline, I recommend half the earnings be distributed as salary and half as distributions.  It would be VERY DIFFICULT for IRS to defeat this treatment.  OTOH, if you pay NO salary, you’re an easy mark; also, since the 1120S discloses that no salaries were paid but distributions were, you may well be "asking for it". For the most part, I believe cases that have been litigated on this matter have involved shareholders who took NO salary. The other side of the coin is that, by taking a small salary, you will be filing the necessary P/R tax reports, etc.  Thus, if you later lose your argument, you will not be subject to the nasty nonfiling penalties. If your profits are 100k, take 50k salary & 50k distributions.  See what that does to your taxes.  If you can justify a 40k salary as "reasonable", all the better.  I would think that, if capital is a material income-producing factor, you would be in an even stronger position.  While I’m not aware of anyone using this argument before the Courts, I suspect it would be a good one. David

Response:

David I can’t see how you can justify a 50:50 split between distributions and salary. Using an arbitrary allocation makes no sense. Each situation should be looked at on a case by case basis. How one defines a reasonable salary I must admit can be quite difficult if not impossible. I would argue that if 100 different accountants had to come up with an amount there would be 100 different answers.

I ask my clients, "What would you pay someone else to do your job", and press them to put enough time and energy into the answer to where we feel comfortable that THEY could sit across a table from an IRS agent and defend their number. Usually that means going to some outside source – employment agency – trade association – etc. for comparative numbers.  So far I haven’t had a problem with this approach, and I know the IRS has looked at it, though never with any real enthusiasm. From first hand observation I am shocked at how many sole-proprietors incorporate and take the S-Corporation election under the misguided belief that doing so exempts them from paying Social Security Taxes. In many cases these same taxpayers add insult to injury by not reporting the distributions on their personal state tax returns.

I practice in Washington, which does not have an income tax.  Most of the state reports (other states) I have had experience with require that S-Corporation profits be reported in the same manner as on the federal return, and do not ask for a reporting of the distributions. — Jim Hudspeth, CPA – http://home.att.net/~jdhcpa/mainpage.html – Washington, USA Associate Member, Association of Certified Fraud Examiners

Response:

It can be an appropriate tax saving measure to use the S Corporation as you describe.  Many CPAs and attorneys will disagree, but this is a tactic I have used with many, many corporations over the years and NEVER have I had a problem with it. What I do, though, is to be absolutely certain that the shareholder takes some salary.  As a guideline, I recommend half the earnings be distributed as salary and half as distributions.  It would be VERY DIFFICULT for IRS to defeat this treatment.  OTOH, if you pay NO salary, you’re an easy mark; also, since the 1120S discloses that no salaries were paid but distributions were, you may well be "asking for it". For the most part, I believe cases that have been litigated on this matter have involved shareholders who took NO salary. The other side of the coin is that, by taking a small salary, you will be filing the necessary P/R tax reports, etc.  Thus, if you later lose your argument, you will not be subject to the nasty nonfiling penalties. If your profits are 100k, take 50k salary & 50k distributions.  See what that does to your taxes.  If you can justify a 40k salary as "reasonable", all the better.  I would think that, if capital is a material income-producing factor, you would be in an even stronger position.  While I’m not aware of anyone using this argument before the Courts, I suspect it would be a good one. David

– Hide quoted text — Show quoted text – Hello, Is it true that it doesn’t make much sense to incorporate if you are just trying to save to taxes? Right now I am doing business as a self-propriator, and my profits are around $100,000 a year. As I understand, in addition to the income tax I have to pay the self-employment tax which I can avoid if I become an S corporation. So my question if the saings really are 15%, why not incorporate just to save on taxes? Or am I wrong? Also, does it make any sense in terms of taxes to incorporate in places like Nevada if I am a California resident. I assume I would have to pay taxes as a CA resident anyway, but I just want to make sure.  I woud really appreciate any advise. Thanks, Jerry P.S. I am in the Bay Area, and I was wondering if somebody can recommend an accountant who would be familiar with this situation.

Response:

Incorporating in a state other than CA doesn’t make sense; in any event you still would need to pay the CA franchise tax (minimum $800 per year) plus the hassles of filing a second tax return and dealing with a corporate entity.

But what if I do my business traveling all the time, and selling "soft" products over the Internet. Although I am a CA resident, I don’t actually spend too much in California. Actually most of the time I am overseas or in some other state. Does it make any difference? Jerry

Response:

If your profits are 100k, take 50k salary & 50k distributions.  See what that does to your taxes.

So what are my saving going to be like this? Jerry

Response:

- Hide quoted text — Show quoted text -Is it true that it doesn’t make much sense to incorporate if you are just trying to save to taxes? Right now I am doing business as a self-propriator, and my profits are around $100,000 a year. As I understand, in addition to the income tax I have to pay the self-employment tax which I can avoid if I become an S corporation. So my question if the saings really are 15%, why not incorporate just to save on taxes? Or am I wrong? Also, does it make any sense in terms of taxes to incorporate in places like Nevada if I am a California resident. I assume I would have to pay taxes as a CA resident anyway, but I just want to make sure.  I woud really appreciate any advise. Thanks, Jerry P.S. I am in the Bay Area, and I was wondering if somebody can recommend an accountant who would be familiar with this situation.

Incorporating in a state other than CA doesn’t make sense; in any event you still would need to pay the CA franchise tax (minimum $800 per year) plus the hassles of filing a second tax return and dealing with a corporate entity. Remember that above $75,000 (give or take; it changes every year), the SE tax rate is only 2.9%.  You also have SDI to worry about as well as federal and state unemployment taxes which you don’t pay as a sole proprietor. While incorporation MIGHT save you a liability headache, remember that it won’t really protect you from your own actions, if the other side has a smart attorney. You can probably better cover your liability through insurance. So my advice is: consult a local tax pro to be sure of the right choice for YOUR business. My guess is that a corporation would not be optimal in CA. Tom –Solving your tax and business problems with Professional Service…Personal Attention Web: http://members.aol.com/thealycpa/Tom_Healy_CPA.html

Response:

If your profits are 100k, take 50k salary & 50k distributions.  See what that does to your taxes.  

One hitch, though, is that the nastiest part of the SE tax applies to the lower half of the distributions–that is, by taking $50K in salary and $50K in distributions, you do *NOT* reduce your SE tax by 50%. That’s because the FICA portion of the SE tax is capped–so the tax is regressive in nature (opposite of the income tax) and the first dollars earned are the most expensive ones from a tax standpoint. I would agree that the cases that I’ve seen the IRS be successful in have involved taking zero salary.  While it doesn’t follow that $1.00 in salary would have changed Spicer Accounting or Radtke’s results, it is possible the courts wouldn’t have been as harsh had some arguably reasonable amount been paid.  Additionally, it also works a lot better the less that is taken out as distributions during the year–that is, if the funds are left in the business, the IRS has a tough time arguing that they were "disguised" salary.  Of course, the problem is that most clients don’t want to do that…

Response:

But what if I do my business traveling all the time, and selling "soft" products over the Internet. Although I am a CA resident, I don’t actually spend too much in California. Actually most of the time I am overseas or in some other state. Does it make any difference?

How many states do you want to file in?  Because your argument is based on the theory that you shouldn’t be charged with having California sales if you aren’t in California.  OK, fine–but then you are arguing you earned the income in Kansas, Ohio, Arizona, Oregon, etc. and those states would like to hear from you now.   And since you’ve never likely filed with those states, they’d like back income tax returns for every year since you first started (no returns filed means no statute of limitations in most states).  And, oh yeah, you likely need to qualify the corporation in each of those states in order to do business there–which means filing with each state, paying fees, etc. In essence, I think you just opened Pandora’s box… Back to reality–you are likely going to want to argue you are really only a California corporation and you don’t have sufficient nexus to trigger filing in all those other states.  But that argument is going to throw the income back into California.

Response:

As I understand, in addition to the income tax I have to pay the self-employment tax which I can avoid if I become an S corporation. So my question if the saings really are 15%, why not incorporate just to save on taxes? Or am I wrong?

Let’s be careful here.  While S corporation income is not subject to the self-employment tax, you would have to take a reasonable salary to compensate you for your services if you are taking distributions from the S corporation.  And, on that reasonable salary you’d have to withhold FICA and Medicare taxes from the payment *AND* pay the employer portion of said taxes.  Which works out to, effectively, the same rate as the self-employment tax (amazing how that works, huh?). If you don’t pay it…well, let me introduce you to the Spicer Accounting case and Mr. Spicer: —begin quoted text Spicer Accounting, Inc., Plaintiff-Appellant v. United States of America, Defendant-Appellee (CA-9), U.S. Court of Appeals, 9th Circuit, 89-35071, 11/1/90, 918 F2d 90, Affirming an unreported District Court decision         Robert E. Kovacevich, 818 Riverside Ave., Spokane, Wash., for plaintiff-appellant. Shirley D. Peterson, Assistant Attorney General, Department of Justice, Washington, D.C. 20350, for defendant-appellee.         Before HUG, JR., NELSON and BRUNETTI, Circuit Judges. OPINION         NELSON, Circuit Judge:         Taxpayer accounting corporation seeks a refund for FICA and FUTA taxes paid to the IRS on behalf of Mr. Spicer. Taxpayer contends that payments paid to Mr. Spicer were dividends, since payments made to stockholders in a subchapter S corporation are not wages. We find that because payments received by Mr. Spicer were for substantial services rendered, these payments are "wages" subject to FICA and FUTA. Taxpayer asserts, in the alternative, that it was not liable for FICA and FUTA because Mr. Spicer was an independent contractor, not an employee. We deny Taxpayer’s claim finding that there is no evidence that Mr. Spicer was an independent contractor. Finally, we hold that section 530 of the Revenue Act of 1978 does not relieve Taxpayer from FlCA and FUTA liability for the years 1981 and 1982, because Taxpayer’s treatment of Mr. Spicer as a stockholder, not as an employee, was unreasonable. We, therefore, affirm the district court’s decision.         FACTUAL AND PROCEDURAL BACKGROUND         Mr. Spicer is the president, treasurer, and director of taxpayer corporation, Spicer Accounting, Inc. (Taxpayer). In 1985, the Internal Revenue Service (IRS) made assessments against Taxpayer for Federal Insurance Contribution Tax (FICA) and Federal Unemployment Tax (FUTA). The assessments were made for the years 1981 and 1982 in light of allegations by the IRS that Mr. Spicer was an employee of Taxpayer. The assessed amounts, including interest and penalties, were paid to the IRS. Taxpayer now seeks a refund of the amounts paid.         Mr. Spicer has been a licensed public accountant since 1957 and the president of Taxpayer since 1973. He and his wife are the only stockholders in Taxpayer, each owning fifty percent of the corporation. Mr. Spicer has never entered into an employment agreement with Taxpayer. At no time during his relationship with Taxpayer has he been paid wages or salary denominated as such. The arrangement throughout the relationship has been that Mr. Spicer would donate his services to the corporation, and that as a stockholder, he would withdraw earnings in the form of dividends. Mr. Spicer has consistently reported his income as dividend income.         Mr. Spicer performs substantial services for Taxpayer. During the period in question, Mr. Spicer worked for Taxpayer approximately thirty-six hours per week. During tax season, he would typically work six-day weeks. Mr. Spicer would not, however, go into the office when demand for accounting services was lower. Also, during the period in question, Mr. Spicer owned certain rental property, and he would often perform work relating to that property during business hours. Mr. Spicer testified at trial that work on the rental property occupied approximately ten to fifteen percent of his time during the period in question.         Mr. Spicer also testified that his accounting work for Taxpayer was crucial to the corporation’s business, and that Taxpayer could not function without him. He further testified that to hire a replacement for him would cost Taxpayer $16,000 to $17,000 per year.         Spicer was the only accountant working for the firm, although Spicer’s wife and one other employee prepared tax returns and performed monthly bookkeeping for clients of Taxpayer. However, all tax forms prepared by the firm had to be signed by Mr. Spicer, and he was the only person during the period in question who could perform financial planning and audits, sign opinion letters, and represent clients before the IRS.         Finally, Mr. Spicer testified that he believed that Taxpayer’s practice of reporting his income as dividends was proper, and that he also believed that such an arrangement would allow Taxpayer to avoid paying FICA and FUTA. He also testified that by denominating all of his income from Taxpayer as dividends, he would forego Social Security and other benefits.         The district court held that Mr. Spicer was an employee and that the payments were "wages" subject to FICA and FUTA. Taxpayer timely appealed to this court.         STANDARD OF REVIEW         The determination of whether an employer-employee relationship exists involves a mixed question of law and fact. Professional & Executive Leasing, Inc. v. C.I.R. [88-2 USTC

Question:

hi, i am new to this sort of stuff, and just wanted to know the answer to my question, with public sector accouting, in what ways or similar is it to private sector company accounting, is it something to do with shares, and the owner of the companies? please explain John

Response:

It is not similar. Government accounting is focused on allocation of resources and furnishing services, and most importantly, accountability of spending. Private sector’s accounting is focused on generating income. Thus, the reporting standards for both is different based on the information needs of the financial statement reader. In the private sector, readers are interested in income generation and growth. The public sector’s accounting, financial statement readers are interested in making sure that the allocation of resources are following budgets and are expended properly.

– Hide quoted text — Show quoted text – hi, i am new to this sort of stuff, and just wanted to know the answer to my question, with public sector accouting, in what ways or similar is it to private sector company accounting, is it something to do with shares, and the owner of the companies? please explain John

Response:

Question:

Does anybody have any information about starting pay for a staff accountant in the midwest? does an MBA get you any more? Big 6  vs.   Small practice tax   vs.  audit. thanks

Response:

Does anybody have any information about starting pay for a staff accountant in the midwest? does an MBA get you any more? Big 6  vs.   Small practice tax   vs.  audit. thanks

Check out : http://www.espan.com/salary/fin/comp/fincont.html Big 6 (Big 8 when I was in school)  will pay you great dividends when you put that on your resume.  You will be much sought-after. In the case of Philip Morris, you can’t advance far in the company without your MBA.  I’m sure other companies of that size would have similar requirements. Starting salaries in the Madison, WI area for regional and small CPA firms start at about $25,000.  Be sure to ALWAYS negotiate your salary when you interview!  I didn’t once, and I will never make that mistake again. As the saying goes:  A tax accountant is worth his weight in gold. Take that for what it’s worth.  A junior accounant in the tax dept of a regional firm probably doesn’t make shit.  The tax partner will be rolling in dough. As you advance, the salary for an "Accounting Supervisor" (again in Madison) looks like this: Min:  26,000 Max:  59,100 Ave:  40,222 Controller: Min:  31,500 Max:  99,704 Ave:  62,612 Hope this helps.  E-mail for specific questions if I can help. –Daedalus–

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Question:

: | In the New Testament, Diana or Artemis of the Ephesians (Acts 19:35) was a : | many-breasted fertility goddess. Aphrodite was also associated with : | : | Diana was the virginal huntress goddess of the romans, and Aphrodite is : | the roman goddess of love, neither of these have anything to do with : | fertility. : Bill, David is correct here:  Diana OF THE EPHESIANS was indeed "a : many-breasted fertility goddess" — clustered like a bunch of grapes. It has been questioned is why she was referred to as Artemis (or Diana by the Romans), because she really doesn’t look like the tradtional portrayals of Artemis/Diana.  Baring and Cashford in _The Myth of the Goddess_ surmise that perhaps she was a manifestation of Cybele. : It’s very easy to think of "ancient European religion(s)" as being somehow : homogenous, constant across distance and time.  But local versions varied : in many details.  In this case, Ephesus and Rome differed in the imagery : and the attributes of Diana. In this regard, it is also significant that it was a council in Ephesus that in 431 AD, would proclaim Mary as "Christ-bearer" and "God-bearer." By the early 5th century, Mary would be portrayed wearing the crown of Cybele or Diana. Tribe

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[snip] | Egypt Isis and her son Osiris, in Asia Minor Cybele and Attis. In Syria | | Osiris is Isis’ husband who is slain by Set. Isis’ son who brings Osirus | back is Horus. No conflict here:  Horus is also Osiris reborn.  The son is the husband. [snip] | In the New Testament, Diana or Artemis of the Ephesians (Acts 19:35) was a | many-breasted fertility goddess. Aphrodite was also associated with | | Diana was the virginal huntress goddess of the romans, and Aphrodite is | the roman goddess of love, neither of these have anything to do with | fertility. Bill, David is correct here:  Diana OF THE EPHESIANS was indeed "a many-breasted fertility goddess" — clustered like a bunch of grapes. It’s very easy to think of "ancient European religion(s)" as being somehow homogenous, constant across distance and time.  But local versions varied in many details.  In this case, Ephesus and Rome differed in the imagery and the attributes of Diana. The two "Dianas", Ephesus’s and Rome’s, may not even have had the same name originally — Romans tended to use their own god-names when referring to the deities of other people; thus Julius Caesar claimed that the Celts worshipped Mercury, probably because a description of the Celtic Lugh included traits he "recognized" as Mercury’s.  (E.g., god of language.) But if I described other details about Lugh, as "Mercury of the Celts", you might equally find them odd, since these would NOT match "Mercury of the Romans".  Thus with "Diana of the Ephesians" vs. "Diana of Rome". — raven  | "I have seen the sun at midnight, slain the bull at his command,           |  Used the power of the crystal, felt the force direct my hand,  .sol.net |  Counted corpses in the forest, chanted runes upon the tree"

Response:

The roots of Wicca

Lets ignore this line for a minute and look at what else you’ve written. FERTILITY CULTS A general term for religions marked by rites which reenact a myth accounting for the orderly change of the seasons and the earth s fruitfulness. Such myths often involve a great mother-goddess as a symbol

A fertility cult is a cult that worships fertility. The fertiltity of people and the earth. It can have either a central male or female figure. there are lots of male fetility gods. Geb, Apollo. ect. Egypt Isis and her son Osiris, in Asia Minor Cybele and Attis. In Syria

Osiris is Isis’ husband who is slain by Set. Isis’ son who brings Osirus back is Horus. the Ugaritic myths of the second millennium B.C. pictured Baal-Hadad, the storm god, as the dying and rising god. (A local manifestation of this god is mourned in Zech. 12:11; Syrian kings derived their names from this deity, 1 Kings 15:18; 2 Kings 6:24; 13:24).

Why you’re using the old testament to discuss wicca is beyond me, but why do you assume it’s factual. Which it obviously isn’t according to the mistakes shown right at the begining of this article. Fertility cults attribute the fertility of the cropland and herds to the sexual relations of the divine couple. Sacral sexual intercourse by

No some cults are based on the idea of the god or Goddess just being fertile in and of itself. ie: the nile river priests and priestesses or by cult prostitutes was an act of worship

Yes some fertility cults use ritual sex, but so do almost alll religions regardless of the realm of the god. the roman gods were always having sex with each other and everything. But their priests and priestesses may have to be celibate such as the preists/esses of Vesta and Diana. fertility rite like that practiced by the Hittites. Sacrifices of produce, livestock, and even children (2 Kings 17:31; 23:10) represented giving the god what was most precious in life in an attempt to restore order to the cosmos and ensure fertility.

All religions without exception have offerings. Elijah s struggle with the priests of Baal and Asherah at Mount Carmel is

(large old testament bible tract removed to preseve bandwith) In the New Testament, Diana or Artemis of the Ephesians (Acts 19:35) was a many-breasted fertility goddess. Aphrodite was also associated with

Diana was the virginal huntress goddess of the romans, and Aphrodite is the roman goddess of love, neither of these have anything to do with fertility. fertility. Her temple at Corinth was the home of cult prostitutes

Yes you actually got one right. Aphrodite the goddess of love had temple prostitutes as did almost all of the roman temples. What does this have to do with fertilty cults and Wicca is still beyond me. responsible for the city s reputation for immorality. (Compare 1 Cor. 6:15-20.) Many of the mystery religions which competed with Christianity in the early centuries of the church developed the myths of the older fertility cults.

So I fail to see what the old testament(which is the book for jews) has to do with fertility or with Wicca. And apparantly you have no idea either as you come to no point at all in this incoherant rant. Read some of the better books on anceint religions and then maybe you’ll have soem idea of what it is you were trying to say. Any good library will have a few.

Response:

The roots of Wicca FERTILITY CULTS A general term for religions marked by rites which reenact a myth accounting for the orderly change of the seasons and the earth s fruitfulness. Such myths often involve a great mother-goddess as a symbol of fertility and a male deity, usually her consort but sometimes a son, who like vegetation dies and returns to life again. In Mesopotamia the divine couple was Ishtar and Tammuz (who is mourned in Ezek. 8:14), in Egypt Isis and her son Osiris, in Asia Minor Cybele and Attis. In Syria the Ugaritic myths of the second millennium B.C. pictured Baal-Hadad, the storm god, as the dying and rising god. (A local manifestation of this god is mourned in Zech. 12:11; Syrian kings derived their names from this deity, 1 Kings 15:18; 2 Kings 6:24; 13:24). His wife was the goddess Anath. In the earliest Ugaritic myth Asherah, the great mother-goddess, was the consort of El, the chief god in the pantheon. As Baal replaced El as the major deity, he became associated with Asherah (Judg. 6:25-30; 1 Kings 18:19). Ashtoroth, the daughter of Asherah, is used as the Hebrew word for womb or the fruit of the womb (Deut. 7:13; 28:4, 18, 51). Fertility cults attribute the fertility of the cropland and herds to the sexual relations of the divine couple. Sacral sexual intercourse by priests and priestesses or by cult prostitutes was an act of worship intended to emulate the gods and share in their powers of procreation or else an act of imitative magic by which the gods were compelled to preserve the earth s fertility (1 Kings 14:23; 15:12; Hos. 4:14). Transvestitism (prohibited in Deut. 22:5) may have been part of a fertility rite like that practiced by the Hittites. Sacrifices of produce, livestock, and even children (2 Kings 17:31; 23:10) represented giving the god what was most precious in life in an attempt to restore order to the cosmos and ensure fertility. Elijah s struggle with the priests of Baal and Asherah at Mount Carmel is the best known conflict between worship of Yahweh and a fertility cult (1 Kings 18:17-40). Under Ahab, Baalism had become the state religion (1 Kings 16:31). The account of the priests of Baal lacerating themselves (1 Kings 18:28) is illuminated by the Ugaritic myths where El gashes his arms, chest, and back at the news of Baal s death. The priests of Baal customarily reenacted this scene from the myth at plowing time. Both skin and earth were cut as a sign of mourning (prohibited by Deut. 14:1). Baal s resurrection came with the return of the rains. The biblical narrative is clear that Yahweh, not Baal, is the Lord who withholds and gives rain (1 Kings 17:1; 18:20-45). The Israelites  sacred calendar celebrated the same seasons as their neighbors (barley harvest = feast of unleavened bread; wheat harvest = Pentecost; fruit harvest = booths). The Israelites interpreted these seasons in light of God s redemptive acts in their history. Israel recognized the one God as the one responsible for rain (1 Kings 18), grain, wine, oil, wool, and flax (Hos. 2:8-9). Israel conceived of the earth s fruitfulness in a way quite unlike that of her neighbors. Yahweh had no consort; thus fertility was not tied to Yahweh s return to life and sexual functioning. Rather, the ability of plants and animals to reproduce their own kind was rooted in creation (Gen. 1:11-12, 22, 28). The orderly progression of the seasons was not traced to a primordial battle but was rooted in God s promise to Noah (Gen. 8:22). The fertility of the land was ensured not by ritual reenactment of the sacred marriage but by obedience to the demands of the covenant (Deut. 28:1, 3-4, 11-12). In the New Testament, Diana or Artemis of the Ephesians (Acts 19:35) was a many-breasted fertility goddess. Aphrodite was also associated with fertility. Her temple at Corinth was the home of cult prostitutes responsible for the city s reputation for immorality. (Compare 1 Cor. 6:15-20.) Many of the mystery religions which competed with Christianity in the early centuries of the church developed the myths of the older fertility cults.

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