The Accountant: Protecting the masses from financial misstatement, and ourselves

Quite frequently, “us accountants” get a bad rap.  My father has referred tome as a “bean counter”, which was kind of offensive, but I got over it. In the large organizations I have been a part of, those outside of the accounting and finance departments like to blame accounting for a lot of things.  For instance, when I don’t approve a purchase requisition, the operational side tends to say we’re being stingy, when in fact I am just trying to follow policy and procedure to ensure correct coding and supporting documentation is attached.  I honestly am not inclined to check anyone’s budget nor tell others they don’t have a valid business purpose for their requisition.  My position is quite the contrary; I would rather all employees have the things they need to serve our customers and make the company perform at the highest level possible.

Image from: straighttalkcpas.com

So, what do accountants really do?  An accountant’s true job is to record business transactions per the guidance found in specific regulations such as U.S. GAAP (Generally Accepted Accounting Principles) or the Internal Revenue Code, A.K.A the tax code.  Our role is to help those who employ our services better understand what is happening on a dollars and cents level.  Everything, even those beans, must be converted into some type of dollar amount.  Measuring the value of items represented on the financial statements is one our key responsibilities. 

What value can accountants provide to me?  First, when you have a situation come up that is so complex, you have no idea on how to handle it to avoid potentially misstating your tax return, a Tax Accountant is likely who you need to see.  Most Tax Accountants are either Certified Public Accountants (CPAs) or Enrolled Agents (EAs). 

EAs must pass a three-part exam developed by the IRS, which focuses on the taxation of business and personal entities.  EAs are typically tax specialists and help individual and business alike.  Many EAs are ex-IRS employees and know the ins and outs of taxation, which can help you make the call on taking potentially risky tax deductions.  Taxation is not a black and white topic.  Complicated matters should be executed by a professional, who is likely to save you a lot of money if you happen to be audited.  They will ensure the proper documentation is in place prior to filing the tax forms, or advise you against taking tax positions that cannot be supported under and audit or in court.  A reputable CPA can also fill this role.

CPAs in the U.S. are vetted by each State Board of Accountancy.  All CPAs must pass the four-part uniform CPA exam, obtain a the equivalent of a bachelor’s in accounting, have at least 150 college credits, and have a certain amount of professional experience, which is slightly different by state.  The exam is developed by the American Institute of Certified Public Accountants (AICPA).  CPAs rarely work synchronously in multiple areas such as tax, financial accounting, and auditing, but those who are seasoned or work for small firms may be well-versed enough to take on multiple specialties.  Some CPAs work as auditors, who protect us from misstatements of financial information that is reported to investors.  CPAs protect everyone who invests in public companies because an independent audit is conducted each year to ensure compliance to the rules.  Those CPA’s that work in “industry” work for public and private firms, acting as managers and senior accounting staff, ensuring those companies correctly report information and have an easier time with the annual audit.

Sometimes you just need to file your return and have a few questions.  This is where going to a tax preparation provider, such as Jackson Hewitt or H&R Block can be of value.  If you operate a small business and are having trouble classifying expenses or creating profit & loss statements, a bookkeeper may be all that you need.  At the end of the year, the bookkeeper can typically refer you to a reputable CPA or EA that can convert your books into a tax return.  The hourly rate can be vastly different between a CPA and bookkeeper, so I recommend checking out both when you are shopping for tax and financial services.

Being an accountant is interesting when you see the world through numbers and financial statements.  For me, personally, I have always seen things through dollar and cents, but know there are many out there who prefer to live life on the other side of the numbers and just do things.  To be successful with your own finances, you don’t have to be a CPA or financial advisor, but you do need to know the basics.  Employing a team of professionals to advise you as your net worth grows is essential to protecting what you have worked so hard to build.  When you get up toward a million dollars or more, you probably want to also find an estate attorney who can help you make sure you are protected with a trust and that when you do leave this world, your estate easily passes to your heirs. 

I view accountants as protectors of the economy.  Accountants should not influence the decisions of the users of the financial statements, but should instead fairly present the data that comprises the financial results of a company or individual.  As an accountant, I do not set out to make a company look good or bad, but instead vow to use my best professional judgement to ensure users of those financials get the most accurate results possible.  This may sound hokey, but it’s what a good accountant does.

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The IRS Launches its COVID-19 Stimulus Portal

It’s April 15th! Today used to be tax day, in a pre-COVID-19 world, but hopefully you know filers have until July 15th, 2020 to file their 2019 returns. I wanted to get the word out that the IRS has launched a new portal that you can use to check on your stimulus payment and see if the agency has your direct deposit information. Be aware that the system may be slow or bogged down at times, so trying multiple times is advisable. Try not to get frustrated.

Screen shot from irs.gov – Get your stimulus payment

First, you will want to navigate to THIS PAGE and look for the blue, “Get My Payment” button, a picture shown to the right.

You will need your 2019 tax return info, such as your adjusted gross income and refund or tax due amount. If you didn’t file a return in 2019, then you will need your 2018 information. If you didn’t file at all, you can also find a link to sign up for an economic impact payment at this same page. Look for the button to the right of the first one, shown below.

From irs.gov – Information for those that do not have to file tax returns

Once you get through these pages you will be prompted with a warning page telling you that this site is for official use only and that you shouldn’t be using other people’s information. Understand this information and click on the button. This will bring you to the “Get My Payment” page, which is where you will enter your social security number, date of birth, street address (no city, state) and ZIP code. NOTE: Use dashes in your social security number (e.g 123-45-6789) or else it will fail. I tried without the first time and with the second and it worked the second time. It may prompt you for more information on the next screen. This is where I had to enter my 2019 AGI and refund amount. Once I got this far, the page said they didn’t have my direct deposit information and prompted for bank routing and account information. I’m not sure why this information wasn’t in the system, as I received my recent tax refund via direct deposit, but whatever helps my payment reach me sooner, the better!

If your information is all set, the website will show the message below, which means your payment is in process.

Confirmation page from irs.gov

Some other COVID-19 facts on IRS operations:

-The IRS is not processing paper returns due to the service centers being shut down.

-No paper forms requests are being filled. Try to print them off online.

-Mail correspondence is not being opened either.

-If you need to do something, try to do it electronically, or wait. This is why the deadline is not July 15th, 2020.

I hope this was informational for those waiting for for thier COVID-19 windfall.

What do you plan to do with your payment? Leave a comment and let me know. I’m interested!