Fall has finally arrived. The change in season is the perfect time to evaluate your firm’s inner workings and maybe even switch up your routine. Are your staff and clients happy? Are you fostering a work environment where staff feel energized, supported and have growth opportunities available to them?

People need the right blend of opportunities, challenges and accomplishments to achieve optimal success. And when the environment is right, growth can flourish. We asked three successful firm leaders how they’ve nurtured their firm’s cultural climate. This is what they said:

1. Define your desired culture and core beliefs.

Andy Armanino, CPA, managing partner of California-based Armanino LLP, leads his firm on the concept of providing a unique level of client service that makes a difference in clients’ lives. By promoting internal behaviors to staff that support his firm values including: positive energy, empowerment and being “wickedly smart,” Armanino has developed a strong firm culture for more than 1,000 employees.

Gabrielle Luoma, CPA, of GMLCPA in Tucson, Ariz., says she started her firm with the vision of continuously creating more value for both clients and staff. Luoma says it’s important for clients to know the firm is focused on giving them the value and attention they deserve rather than just billing a certain number of hours. This builds a whole new level of trust with clients – something very important to Luoma.

2. Foster a climate that allows innovation to take root and grow.

Armanino challenges his staff to really listen to clients to gain a new perspective of their needs. “When you combine a desire for a deep understanding with smart people, innovative solutions just come naturally,” he says.

Luoma’s staff of 15 all work remotely. She gives staff the freedom of flexible hours and unlimited paid time off. Luoma says her staff have proven they’re dedicated to providing value to both the firm and their clients. And in turn, staff see the value in their work and want to produce innovative and quality results.

3. Grow people rather than products.

Supporting your staff through continuing professional education (CPE) is one part of fostering an environment where growth can flourish. Erin Roche, CPA, of Elliot CPA Group in Santa Rosa, Calif., says they require technical staff to complete double the CPE required by their state board. But they make sure staff aren’t “punished” for taking time to complete CPE by coming back to large piles of work in the office.

4. Develop leaders and successors.

Team leaders at Elliot CPA Group are expected to participate in community leadership. “We ‘brag’ to staff about these community leadership roles and look for ways to get them involved,” says Roche. As staff become more visible in the community, not only does the firm benefit from increased exposure, individuals experience new leadership opportunities and have a chance to grow professionally, too.

Armanino says he doesn’t worry about handing over the reins of the firm to the next generation because of the leaders they’ve developed. “I know that I need to follow my own advice and the firm will be in great hands.”

Culture is important in firms of all sizes. No matter your current climate, a change – even just a small spark – could be exactly what your firm needs to recharge its batteries and spark engagement with staff.

The AICPA recently launched a new podcast on small firm culture. In the series, you can listen to small firm leaders across the country talk about how they run a successful practice in today’s rapidly changing environment.  

It’s also beneficial to your firm to support staff on their journey towards achieving CPA Exam success. The CPA Culture of Support Toolkit has more information and unique ideas on ways you can best support your CPA candidates.

Lisa Simpson, CPA, CGMA, Associate Director – Firm Services, Association of International Certified Professional Accountants

     

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Your clients may feel like October 15 is still far away, but you know better. Completing a return that is on extension takes time, and you’re getting worried because you don’t have all the information you need. Calls and emails to the clients aren’t producing results. 

You may feel like you’ve seen this movie before, and perhaps it’s time to write a new script. Here are a few actions you can take to address the issue.

1. Issue an alert

Ideally, you sent clients an engagement letter at the beginning of the year that spelled out deadlines and responsibilities of both parties, as well as the consequences if the client does not produce information required to complete a timely return. These letters are important, as they protect the practitioner and make the client aware of the consequences of procrastinating. If your engagement letter didn’t include a deadline, set this now and notify your client by certified mail. 

2. Warn them that those penalties (and related interest) will hurt

People typically hate paying fines or penalties, so this option should be effective for some — if not most — clients. Of course, if you have military clients serving in a combat zone, they have more time to file and pay any taxes due, generally 180 days after they leave the zone.  

• Failure to File: The failure to file penalty can cost your client a lot of money. The penalty is 5 percent of the tax owed for each month, or part of a month, that the return is late up to 25 percent. If the return is over 60 days late, your client will face an additional penalty: the lesser of $210 or 100 percent of the tax owed.

• Failure to Pay: The IRS charges one-half of 1 percent for each month, or part of a month, up to 25 percent of the amount of unpaid tax. In the worst-case scenario, the penalty increases to 1 percent if the tax remains unpaid 10 days after the IRS issues a notice of intent to levy property.

• Interest: If your client doesn’t file or pay on time, they’ll also owe interest. What turns into an unpleasant surprise in future years is a reduction of any refund if they are unable to pay off their debts, which is often due to mounting interest.

Also, if your client receives the advanced premium tax credit for health coverage, hopefully they already filed, because filing late puts them at risk of losing eligibility for future advanced payments.

3. Remind them taxes can be paid in installments

A few clients may be putting off getting you information because they know or suspect they will owe more than what they paid in April. Remind them that the IRS typically allows taxpayers to set up installment agreements. Make sure the clients know that:

• the IRS imposes setup fees for long-term payment plans
• using automatic debits makes a big dent in the setup fee ($31 versus $149)
• interest and penalties will continue to accrue until the balance is paid in full

 

4.Caution them about potential credit implications

While tax liens are no longer a factor in a person’s credit score, the reality is that only consumers with the lowest scores will see much of a benefit, according to a Consumer Protection Bureau study. Regardless of your client’s score, that lien is still a public record, subject to being discovered during a loan or other credit application process. 

Your client could take a hit to their credit if they use a credit card or loan to pay their taxes. If your client’s debt load increases too much in proportion to their income, their score will fall. Similarly, any late payment on that loan will drag down the score. While this issue does not directly connect to late filing or payments, the earlier you can finish the return, the earlier they can plan for the payment and perhaps avoid using a credit card for the whole amount.      

5.  Move on. “It’s not you. It’s the stress”

If a client persists in pushing too close to deadlines year after year, consider whether it’s worth keeping them. Is the revenue and relationship worth the disruption to your office? In some cases, it might be, particularly if the client brings in referrals.

If, however, you are leaning toward firing them, don’t feel guilty. You have important obligations, like minimizing stress to the extent possible to yourself, your staff, and your loved ones. If you decide to let a client go, alert them now so they have time to find someone else. The AICPA’s sample client termination letter is a good place to start for notifications.

Bonus: It might not be your client’s fault.

Sometimes, a client will miss the extension deadline for reasons outside of their control. For instance, if the problem is a late K-1, there’s little that can be done.

Keep in mind, some of your clients may be affected by recent natural disasters, such as Hurricane Florence that just hit the Southeast. These clients, particularly those in the most highly impacted areas, may struggle to get everything in. The IRS extended deadlines and is providing tax relief to those affected by the storm. You can find more information on who qualifies and the new deadlines here. The AICPA has additional information on assisting clients affected by natural disaster on the Casualty Loss and Disaster Relief page.

As a CPA, you have high standards and would rather not do something if it can’t be done well. Accept what you can’t control some procrastinators can be cured, others can’t. Take the steps you can to alleviate the issue now and in the future. If it looks like a client will need to go on extension next year, offer them these FAQs from the AICPA’s Tax Practitioner’s Marketing Toolkit to start the education process early.    

Allison Carter, Communications Manager — Tax, Association of International Certified Professional Accountants    

     

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In an era of near-daily cyberattacks, organizations increasingly need to show they are protecting sensitive data—and they are turning to CPAs to help them do so.

SOC reporting isn’t something auditors should learn on the job or figure out as they go, though. If you’ve been thinking about expanding your firm’s offerings to include Service and Organization Control (SOC) engagements, there are a few things you need first.

1. You need to be knowledgeable in the service area

Specialized knowledge of an industry or organization is vital for understanding where risks are, assessing those risks and adjusting procedures to the appropriate risk level. As such, focus your SOC practice on areas with which you are already familiar.

This is actually how many firms get into SOC reporting. When financial statement audit clients grow to need assurance on internal controls around information security and privacy, they often turn to their CPA as a trusted advisor. But before you can expand your role, you need to make sure you have the skills and staff necessary to perform SOC services for them.

2. You need to find people with both auditing and IT skills

Make sure your staff has people with the right knowledge to execute these engagements. Where do you find them?

• Recruit from traditional paths: Your firm can recruit accounting students who minored in IT or a similar tech field. Of course, you’ll still need to train these individuals in the cyber components of SOC reporting. Keep in mind, though, that these students are considered “unicorns,” and the largest firms often invest heavily in recruiting them (more on that in just a bit).
• Recruit from non-traditional paths: Consider recruiting out of Management Information Systems (MIS) or other technical programs. Of course, just as an accounting student would need to learn and sharpen their IT skills, an MIS student will need to learn auditing, risk, control and client-delivery skills.
• Hire people who already have experience: Given that the largest firms recruit those who studied accounting and IT, these firms can be great places for you to look for new staff. These CPAs will not only have the education for SOC reporting, but will also have on-the-ground experience that can help your firm grow its SOC service offerings more quickly.
• Grow through acquisition: As with other firm practice areas, you can always grow your SOC practice by acquiring a firm that already specializes in this area.

3. You need to be learning constantly

Your SOC team needs to understand and be able to apply AICPA standards and be able to look at situations on a deep technological level. And because both areas are subject to constant updates and changes, SOC reporting is a skillset that requires a lot of training. Remember: SOC reports have such a high level of public interest that the Peer Review Program has made them must-select engagements. Getting them right is always the priority. Here are a few ways to help your staff get the training they need:

• Consider obtaining advanced certification by becoming a Certified Information Technology Professional (CITP).
• Check out the AICPA’s extensive learning resources for SOC reporting. If you’re interested in SOC for Cybersecurity specifically, make sure to visit the AICPA’s Cybersecurity Resource Center for free downloadable tools.
• Supplement your assurance education with specific IT training relevant to your firm’s service offerings.

Providing SOC services can be a profitable business line for many firms, but you must make sure your firm has the knowledge, skills and training necessary to perform these services according to the standards. For more learning resources, check out the AICPA’s SOC Suite of Services resources page.

Lindsay N. Patterson, CAE, Senior Manager, Communications and Public Relations, Association of International Certified Professional Accountants

     

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According to the most recent data from the U.S. Department of Labor, 70 percent of women with children under the age of 18 are part of the work force. Just like many working parents, I struggled trying to balance the demands of work and home life. That’s why working on a reduced schedule for part of my career was so beneficial.

When I had my first child in 1986, I was a manager in the tax department at Deloitte Tax LLP in Detroit. Through the flexibility options available, I returned from maternity leave and began working a 60 percent schedule. I even rose to a leadership position doing so. The experience was so valuable. It allowed me to be the kind of mother I wanted to be, while also giving me the opportunity to build my career. Here are some tips for talking to your employer about a flexible schedule and maintaining professional success:

1. Accentuate the positive.

Come up with a game plan and a schedule that will work for you. Then, talk to your employer about why the plan will be beneficial to them. Point out that people who are passionate about what they do often perform better—and are worth keeping. When firms provide benefits to employees that help them feel they can balance both their work and life priorities, they typically produce better results.

2. Work with your employer and focus on the long term.

Initially, I considered leaving my job until the children were in school. But I thought it would be too hard to jump back into my career after a long absence. My supervisor was committed to keeping me with Deloitte Tax LLP for the long term, so we worked with human resources to create a plan that allowed me to work a reduced schedule. My supervisor recognized that even though reduced schedules were rare in business at that time, the seasonality of a tax department schedule did allow for some flexibility. So, when I returned from maternity leave, I began working Tuesday through Thursday.

3. Revisit the arrangement as circumstances change.

Be ready to make adjustments as needed. After a few years working 60 percent of a typical schedule, I was asked to take on recruiting for the tax department. Since my children had started school, I was able to increase my schedule to about 75 percent. My responsibilities—and my kids—have grown over the years, and I eventually returned to a full-time schedule.  

4. Aim high.

Don’t let a reduced schedule hold you back from advancement. In 2003, after more than 16 years on a reduced schedule, I was promoted to managing director. Since then, I have been named to several leadership positions. I, and many others like me, have proven you can still rise to the next level even on a flexible schedule. 

If you’re a leader of an organization, consider exploring different models of flexibility. Flexibility can be a firm’s advantage in recruiting and retaining the best people and can help establish a culture that embraces diversity and inclusion throughout your organization.

When it comes to maintaining momentum in your career, the AICPA’s Online Mentoring Program can be a valuable networking resource for you and can demonstrate your firm’s commitment to advancing the next generation of leaders. The mentoring program is especially beneficial for small firms and sole practitioners as you can virtually connect with colleagues across the country. Another helpful tool is the PCPS Flexibility Toolkit, which has insights into ways you can promote flexible work arrangements in your firm.

Nancy Vella, CPA, Managing Director at Deloitte Tax, LLP. Nancy leads the Private Wealth group for the Detroit practice. Among her many leadership roles, she has served as Deloitte’s Tax National Well-being Leader and its North Central Tax Talent Leader.

     

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Your clients are ecstatic. Their daughter just got accepted to an Ivy League college. But they’re also worried because that top tier school is expensive. Concern doubles when they think about their 15-year-old son who just started at a private high school. He’ll be looking at colleges soon, too.

Many parents feel financial pressure when it comes to their children’s education. That’s not surprising considering that in 2016, the yearly estimated average cost of undergraduate tuition, fees, room and board was $16,757 at public institutions, $43,065 at private nonprofit institutions and $23,776 at private, for-profit institutions. 

What can you as a tax practitioner do to prepare your clients for this financial milestone? Below, you’ll find four suggested talking points to put your clients’ minds at ease.

Discuss Coverdell Education Savings Accounts and changes to qualified tuition programs (QTPs)

Clients who have QTPs (529 plans) or Coverdell Education Savings Accounts (ESAs) may find that tax reform has changed how they’ll use these funds. So, you’ll need to discuss the pros and cons of each type of plan to ensure they’re still getting the most bang for their buck.

One benefit resulting from the new tax bill is that 529 plans can now be used to cover tuition at private K-12 schools up to $10,000 each year per beneficiary. That’s great news for parents with kids in private elementary and high schools, but your clients need to be aware of the downside of using these funds early. The longer the funds stay within the plan, the more growth opportunities the money will have.

While both ESAs and 529 plans are good ways to save money for education costs, ESAs can allow for more adaptability, such as very flexible investment choices. The downside of ESAs is that they are subject to higher income restrictions. Benefits phase out completely for joint filers for modified adjusted gross incomes (MAGI) of $220,000 — $110,000 for single filers — or above. Corporations and other such entities can make contributions to ESAs without income restrictions. Also note, the total amount of contributions to these ESAs cannot exceed $2,000 per year, while 529 plans are only limited to the amount necessary to provide qualified education expenses. Make sure your clients understand that there may be gift tax consequence if these contributions exceed $15,000 during the year.

Regardless of which option best fits your clients’ needs, encourage them to shop around to minimize fees.

Update your clients on the status of popular benefits

Good news for your clients! Many popular education incentives remain unchanged after tax reform.

• The American opportunity tax credit (AOTC) can still be used to obtain up to $2,500 of federal tax credits for expenses related to a four-year degree, and $1,000 of this is refundable.
• Scholarships may be excluded from income for tax purposes if they are used for approved expenses.
• Interest from income on savings bonds within an education savings bond program is also excluded from income.
• There is still an exception to the early distribution penalty for retirement account withdrawals if they’re made for education purposes.

Unfortunately, the tuition and fees deduction isn’t around anymore. That can be a blow to those clients who are used to claiming this deduction.

Remember the grownups who want to go back to school

According to the U.S. Department of Education, about eight million adults over the age of 25 are enrolled in college, which means it’s likely that you have clients who need to know about their options.

Recent tax reform did not alter the Lifetime Learning Credit, which offers up to a $2,000 federal tax credit for qualified education expenses paid for all eligible students included on the taxpayer’s return. There’s no limit on the number of years your clients can claim this credit, and there’s no minimum number of enrollment hours or degree requirements to qualify. However, if your clients qualify for the AOTC as well, it may be best for them to take that credit instead.

Adult students with children have even more benefits to choose from. For instance, a tax credit for child care expenses is available for those attending school full time, so long as the child is under the age of 13.

Many adults are still paying off student loans, which can make it difficult to afford more school. If their MAGI is less than $80,000 ($165,000 joint), they can write off up to $2,500 of interest on a loan without itemizing.

Help your clients see the big picture

Of course, paying for school extends beyond smart tax planning. Providing a holistic perspective on a person’s tax and financial situation is where CPAs shine. Just because something is good for tax planning doesn’t mean it’s the most beneficial overall.

Tax reform has likely influenced your clients’ taxes and possibly their overall financial health. Lower tax rates and expanded eligibility for the child care credit mean benefits for your clients, but tax reform also reduced or eliminated other long-standing favorites like the mortgage interest deduction and the alimony write-off.

The AICPA offers a free podcast on tax reform’s effect on many tax and planning issues, including 529 plans, retirement plans, estate, gifts and trust considerations and other concerns. Find more useful tax and planning resources and tips on growing your business on the AICPA’s Planning & Tax Advisory page.

Whether it’s finally getting that Ph.D. or sending a child to Harvard, the more clients understand about how their tax decisions affect their overall financial health, the more likely they are to take the steps necessary to meet their goals. And you’re the person to help guide them.

Michael Ohanesian, CPA, MST, Tax manager – Parr & Associates. Michael lives in San Antonio, Texas, and is a member of the AICPA Tax Practice Management committee.

     

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It’s a familiar cycle. A disaster like Hurricane Florence strikes, and the airwaves are inundated with news of people displaced and homes destroyed. And shortly afterwards, you’ll see friends and colleagues ‘sharing’ on social media that they’ve contributed money towards relief efforts on crowdfunding platforms such as GoFundMe and encouraging others to give what they can.

For many people, their sense of compassion kicks in and they are compelled to do what they can to help – which often means making a financial donation. In fact, charitable giving in the United States soared to a record $410.02 billion in 2017 according to Charity Navigator.

But CPAs who specialize in financial fraud detection and prevention warn that you should think twice before clicking that DONATE NOW button. Fraudsters often take advantage of people’s good will and look to rip them off as they try to help those in need.

In fact, post-disaster scams are often successful because they create a sense of urgency to act quickly. In the wake of Hurricanes Harvey and Irene, robocall and impersonator scams popped up tricking people into giving up their personal information and their money. And the numbers can be staggering. When Hurricane Katrine hit, it was reported that fraudsters walked away with nearly $500 million in a variety of schemes.

In the aftermath of Hurricane Florence, it’s critically important that people do their due diligence before they donate. To protect yourself from post-disaster scams, CPAs on AICPA’s Forensic & Litigation Services (FLS) Fraud Task Force recommend that you: 

• Stick with charities you trust. If you want to donate your hard-earned money to a cause, consider going directly to a well-known and established charity that you’ve donated to in the past. Giving to a trusted source gives you peace of mind, as you’ll know exactly where your money is going when it leaves your bank account.
• Check it out thoroughly before donating. Confirm charitable organizations are actually 501(c)(3) nonprofits. Research the organization using Charity Navigator, GuideStar, CharityWatch or the BBB Wise Giving Alliance. If pledging on GoFundMe, review the company’s guidance on determining if a campaign is legit. You can also verify charitable organizations’ status with the IRS Tax Exempt Organization Search tool.
• Be suspicious of phone calls, texts or emails. If you receive a call, ask the solicitor if the organization is on GuideStar. If the answer is “What’s that?” hang up. The FTC’s website on avoiding charity scams gives additional tips, such as being aware that scammers typically want donations in cash, by gift card or by wiring money, so you’re better off paying by credit card or check.
• Make sure it’s not a knock-off of a real charity. Some fraudulent sources use names that sound very much like a real charity but are not, so be wary of solicitations. Check the name on the website and make sure it matches the web address. Be extra careful when clicking links from email or social media. And don’t trust your caller ID – modern-day scammers can tamper with caller ID to make it look like they’re calling from a different location or organization.
• Find out how Uncle Sam feels about it. Understand how the IRS views charitable contributions. To take a charitable tax deduction, your contribution must be made to a qualified organization. GoFundMe campaigns and related crowdfunding activities may not fall into that category. If the organization is qualified, consult your CPA to find out if there are limits on deducibility and what documentation is needed. As a rule of thumb, always get a receipt for your charitable donations.

 

The bottom line: Don’t stop giving to worthy causes that you feel called to support. Just be careful and do everything you can to make sure the charity is legitimate. If you suspect a charitable campaign of committing fraudulent activity, the best course of action is to contact your state charity regulator and file an online FTC complaint. Your donations can make a real difference in people’s lives … but only if the money makes it to them.

As mentioned in an AICPA Insights post on hurricane preparedness earlier this month, if you’re an AICPA member facing financial hardship because of a natural disaster, you can apply for assistance through the AICPA Benevolent Fund. And if you want to help others in need, you can make a charitable contribution to the Fund.

 

Brian Simpson, Manager, Public Relations, Association of International Certified Professional Accountants

     

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Aretha Franklin, the “Queen of Soul,” passed away last month in her birthplace of Detroit after six decades reigning the music industry. The first woman inducted into the Rock and Roll Hall of Fame, Ms. Franklin leaves behind legendary hits and performances and a legacy many entertainers only dream of achieving. What she didn’t leave behind, however, is a will.

Without a will in place, it’s now up to the state of Michigan to determine how her reported, yet unconfirmed, $80 million net worth is divided among her four children. And that amount could rise as her estate is valued. In hindsight, with some tax and financial planning, and a quality valuation—even just a few months ago—Ms. Franklin’s beneficiaries could have saved more than $27M in estate taxes.

Tax and financial planning:

First of all, avoiding this type of situation is exactly why CPAs should mention the importance of an estate plan if they sense a client’s resistance to writing a will. When faced with an estate challenge, the family of the individual (or, in this particular case, the entertainer’s agent) should become involved to protect the client’s interest. One of the first steps to take is the review of titles to property, employing any state laws that allow the passing of real property through transfer-on-death elections on deeds. This is one of the simplest, yet most effective, means of transferring real property to heirs without the need for probate.

Also, it is imperative to account for the net worth of the client annually. By maintaining accurate records that reflect cost basis, it is far easier to initiate a valuation after the owner is deceased. That’s where the need for experienced professionals in valuation, a growing advisory service, comes into play.

Valuation

Assigning an estimated value to intangibles like publicity, brand, image rights and music royalties can be very complicated. More and more, firms of all sizes rely on valuation experts like Accredited in Business Valuation (ABV) credential holders to play a key role in determining the value of these assets, but it’s important they do so in a justifiable manner that will prevent the IRS from challenging its value.

Intangible assets are typically the most significant assets owned by an entertainer’s estate. From a financial planner’s perspective, the values of such assets are necessary to assist in creating cash flow that may be required to liquidate estate taxes. This cash flow could also help continue the function of the artist’s business ventures as well as the payment of any business debts triggered for repayment upon the death of the entertainer.

At the time of death, the estates of celebrities like Ms. Franklin go through a complex valuation process. Today, continuous payments to an artist from digital streaming royalties can be more valuable than any physical asset. And what if a musician leaves behind a secret vault of unreleased or unpublished recordings, like the legendary artist Prince did after his untimely death in 2016? How is the ownership of these tracks determined? In Ms. Franklin’s case, these considerations will be evaluated and can inflate the value of her estate.

Another trick to valuing a celebrity estate is public interest, which typically skyrockets after death. That could mean an uptick in fans streaming Ms. Franklin’s music, publicity and, ultimately, a higher visibility for her brand. In addition, the state of Michigan has a postmortem right of publicity, meaning heirs can legally protect Ms. Franklin’s image from unauthorized use.

Saving Loved Ones More Than Grief

You don’t have to be a celebrity with an $80 million estate to understand the importance of estate planning. In fact, many Americans do not have a will in place and could, unintentionally, cost their loved ones more than heartache and delayed distribution of assets. The lessons learned by failing to properly plan an estate are multiplied for an estate the size of Ms. Franklin’s. To mitigate this dysfunction for any estate, we recommend the planning process start during a client’s career, and appropriate individuals be appointed in case of his or her incapability or incapacity. In many states, a revocable trust, pour-over will, physician’s directive and durable power of attorney would be adequate to accomplish most transactions of an estate. You can accomplish a tremendous amount of pre-mortem planning for a lot less than $27M!

More than ever before, the need for both trusted advisers and valuation professionals is clear. These experts can help plan ahead and make sure clients’ wishes are carried out. The AICPA can help, if you’re looking for information on expanding your practice into the planning or valuation arena.

Jimmy J. Williams, CPA/PFS. Jimmy is the CEO/President of Compass Capital Management, LLC, a registered investment adviser and wealth management firm with offices in Tulsa and McAlester, Oklahoma.

     

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Your tax practice sees a lot of traffic, no doubt. Clients of every stripe pass through your doors seeking your guidance on all kinds of things. While every CPA tax practitioner is at the ready with good advice and service on all things tax, many go above and beyond with additional planning services. There’s even the occasional left-field question about the best restaurant in town or which university seems best suited to their kids. Over time, you’ve come to identify the personalities of your clients, and you might have noticed that many fit into some broad client types. Do you recognize any of these?

The Procrastinator

You might have sent them an organizer, followed up with a call or email or even seen them around town. But despite your efforts to remind them (or perhaps because of their own busy lives), you don’t seem to be able to get their information until late in the season. Sometimes a little too late.

There could be many reasons clients run behind getting their information to you. That includes receiving their own paperwork late from employers, partnerships, etc. But that doesn’t help you when it comes to crunch time. Stacks of returns remain to be completed and make it hard to work with a client who just walked in the door with proverbial seconds left on the clock.

Maybe it’s time to talk to this client about an extension. With tax reform making its prime-time debut, the 2019 filing season is expected to be one of the most extended in recent memory. Using this handy FAQ, you can quickly walk them through the process of why they might need to extend.

The Family-Oriented Client

You probably have a whole group of clients who have become fixtures for your practice. Maybe even friends. You know their kids’ names, where they’re thinking about vacationing or perhaps even what kind of new car they bought.

The family-oriented client is a treasure for you. They’re fun to work with, friendly and rock-steady. They might also be trying to tell you something. You’ve seen their tax returns. You know what they’re facing financially. Maybe during those conversations talking about the son or daughter going off to college in a few years, you could offer more than a friendly ear?

You can better serve your clients and get even more from these client relationships — and others — by taking the time to ask a few well-placed questions and listening carefully. This guide on growing client relationships through expanded services will help you get things moving in the right direction.

The Sophisticate

You know these clients well. They’re curious, sharp and have a strong command of tax issues. They even keep an eye on the news and ask you questions about recent legislation. They might lay out scenarios for you to ask what the change might be to their tax exposure, cash flow or risk.

These clients appreciate your expertise in ways that can get you very excited about your work. When someone “gets it,” it’s easier to explain your assertions and guide them in the right direction. Because they’re able to see the big picture, they might enjoy the information you can offer them in the tax reform quick reference guide, an overview of some of the major changes in tax law for the 2019 filing season. The guide is available to Tax and PFP section members as well as those with the PFS credential.

It’s true there are far more than three types of clients, and some seem to fit their own categories, as well. Since you’re always speaking with different clients with different needs, there are additional resources available to all AICPA members in the Tax Practitioner’s Marketing Toolkit that can address a broad range of clients and their situations. Make your next client interaction one that everyone can benefit from.

Adam Eric Junkroski, Lead Manager­, Communications, Tax, PFP, S&C — Public Accounting, Association of International Certified Professional Accountants

     

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Chances are, you love your smartphone.

No. I mean: You really love your smartphone.

MRI studies show that when we hold our smartphones, we almost feel as though they’re holding us back. Our brains produce a veritable love potion of chemicals – namely dopamine and oxytocin, the same chemicals released during cuddling. I guess that makes sense. Our smartphones, after all, make great partners. They keep us updated on the weather, the news, the stock market. They advise us where to go for dinner, how to get there, and (thanks to social media apps) whom we should invite – even if we end up ignoring that person the entire time by catching up on emails or playing Fortnite Mobile. Smartphones and other devices typically don’t argue with us, and – provided they’re well charged – they’re there for us when we need them.

Is it a surprise, then, that we’re sacrificing our personal relationships for our relationships with devices? And in doing so, we’re also sacrificing something else: our humanness. As technologies get smarter, we become more reliant, which can actually chip away at our own intelligence.

Take what happened on September 6, 2012:

A happy couple meandered through the scenic subarctic hinterlands of Alaska on their way to the Fairbanks International Airport. Although a human was at the wheel, the role of navigator belonged solely to Siri, the iPhone’s virtual assistant. This couple put all confidence in Siri’s ability. When ‘she’ instructed them to turn right, they turned right. When ‘she’ told them to turn left, they complied. They had so much faith in Siri, in fact, that when her instructions guided them through the airport’s motion-activated security gate and down a mile’s worth of flashing warning lights and a series of signs reading no cars allowed, they drove on, ultimately parking on the airport’s landing field. A737 careened dangerously close to them but luckily avoided what could quite possibly have been the worst t-boning in the history of man.

And this isn’t an isolated incident. Two weeks later, another motorist ended up on the same runway for the same reason. Dozens of other similar instances have been noted as well, including one that took place a half a world away when a group of travelers attempting to drive through Victoria, Australia capitulated to Siri’s demands and ended up stranded overnight, gasless and starving, in the middle of a state park.

But the ‘dumbest’ thing isn’t our blind faith in our smartphones’ abilities; it’s our complete devotion – or addiction – to them. Some studies show that, on average, people spend about 90 minutes a day on their devices. Maybe for some of you, that doesn’t seem so bad, but that ends up being approximately 23 days per year and about 1797 days per lifetime. That’s almost five years of one’s life where you’re most likely doing nothing substantive, and – let me remind you – you already spend about 26 years of your life sleeping. That’s over 30 years of your life devoted to unproductivity.

If you feel you’re starting to surrender your actual intelligence to the artificial kind, here are a few things you can do break your smart device reliance – or at least make it worth your while.

• Read a book: In a recent blog post, I sang the praises of The First 15 program, which encourages participants to unplug for just 15 minutes a day to read a bona fide, complete-with-flippable-pages, three-dimensional book. Firms that have instituted this program have seen incredible returns in productivity, revenue and morale. When I gave the program a try, I became more focused, my memory improved, and I began communicating better.

 

• Ditch the device: We’ve created self-imposed expectations on how quickly we’ll answer texts and emails, and as a society, we’ve developed a legitimate fear of missing out. But often, texts, emails, tweets, news and other attention-hogs can wait. Whether you’re at the office or at dinner with friends, leave your smartphone in the glovebox. You’ll connect more with your surroundings and the people in your life, and you’ll get so much more accomplished in the process.

 

• Notifications off: Not ready to ditch the device? Even in small intervals? At the very least, turn off all your notifications. They’re just distractions. If you’re worried about emergency calls, most smartphones have an override option that kicks in when the same number calls you twice in a row.

 

• Track your usage: Smartphone addiction has become such a problem, certain applications have incorporated tracking features that chart your usage (in most cases, over usage) infographically. If you’re not convinced you have a problem, be sure to capitalize on these features. You may be surprised just how often you check your Twitter account.

 

• Use your smartphone to get smarter: Even if you’re not willing to put down your phone, you can at least find a better use of your time than posting pictures of your latest cappuccino to Instagram. Try learning a new language with Duolingo or start meditating daily with Headspace. You can even make the most of morning commutes by listening to informative podcasts like Radiolab, Stuff You Should Know, or the Association of International Certified Professional Accountants’ Beyond disruption series.

 

So if you’re spending all your time on your smartphone, consider some of the options above. Whether you try the ‘cold turkey’ approach or you merely repurpose your device’s power to power you up, don’t be a dummy. Consider making a substantive change. It’s the smart thing to do.

Brock Faucette, Manager – Member Communications, Association of International Certified Professional Accountants 

     

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With school back in session, hundreds of thousands of students are embarking on their college careers. It’s a date with destiny that will culminate in the answer to the question they’ve been asked a hundred times: “What do you want to be when you grow up?”

Where kids and young adults get their ideas for the occupation that will define their adult lives varies widely. Some follow the footsteps of parents or other family members. Some find themselves attracted to a profession through something they learned early in their education. Still others admire a public figure, CEO or fictional character who inspires their choices (if you’re having trouble believing that last one, check out this story).

But if you want to help set your student (or someone else’s) on a career path they’ll find rewarding, interesting and lucrative, accounting is a natural suggestion. And encouraging them to pursue the CPA will help keep them in demand well into the future.

Advantages to the accounting profession are numerous, and they only multiply for those who seek the CPA credential. If you’re a CPA and you’re having a conversation with a student about their possible career choices, here are a few things you might want to point out about the advantages of becoming a CPA.

You’ll do well for yourself.

One of the top reasons for students to choose a particular career path is salary, and being a CPA can offer an attractive compensation. New CPAs average $66,000 annually, but experience and career path can drive that number much higher. In the U.S., average CPA salaries are well into the six figures. A wide variety of corporate leadership positions covet the CPA, many of them offering exceptional salaries, benefits and bonuses that compare favorably with those of any profession.

Accounting is a growing profession, and CPAs are where the action is.

Demand and job stability are also attractive factors for students choosing an occupation, and accounting offers both. According to the Bureau of Labor Statistics, the job outlook for accountants and auditors is projected to grow 10% faster than the average of all occupations through 2026. For employers, the CPA represents additional mastery and adherence to an ethical code of conduct that makes for an excellent job candidate.

The job prospects are diverse and interesting.

CPAs work in a variety of fields, and young people might not be aware of all the options the profession affords. While auditing and tax are well-known to the general public, fewer are familiar with the roles CPAs can take in other areas. The Spencer Stuart Fortune 500 CFO Index for 2017 found more than a third of Fortune 500 CFOs held a CPA. Additionally, the analysis reported one of the most common routes to a CFO position is an accounting background. Emerging areas such as IT and cybersecurity are also seeking CPA expertise, meaning prospects can be on the cutting edge of new technologies.

As education and business change to meet the needs of a world that looks vastly different from just a few decades ago, a number of new occupations are capturing interest as others wane. But accounting and the CPA have remained reliable career choices all along, not just keeping pace with change, but also driving it.

Inspiring the next generation of CPAs is one of the most important things you can do to contribute to the future of the profession. Help them see the possibilities. Share your experiences. If the student is in high school, have them check out StartHereGoPlaces.com, a fun, interactive site built to teach them about careers in accounting. If the student is in college or a recent graduate, tell them about ThisWayToCPA.com, a site created to help them on their way to CPA licensure. You can also help them prepare for the CPA exam by hooking them up with the CPA Exam Blueprints, which detail the content and skills eligible for testing on each section of the exam.

Adam Junkroski, Lead Manager – Communications – Tax & PFP, Association of International Certified Professional Accountants

     

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