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Tax News Now Ep. 4 - Tax Topics with Daniel Moore
260 Plays11 days ago
Mark Gallegos, Tax Partner at Porte Brown, and his guest delve into the leading tax topics each month. Gain insights from their expertise on the current tax landscape, with 2025 looking like a pivotal year for expiring tax provisions and potentially a new tax policy landscape. Recognizing the many uncertainties tax professionals face this year, Mark and his guests emphasize the opportunities to strengthen client relationships and drive future revenue for tax practitioners.
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Transcript
Introduction and Guest Overview
00:00:09
Speaker
Hi, everyone. Welcome to another episode of Tax News Now. I'm your host, Mark Galagos. And today we're diving into a topic that's right on time. Last minute tax filing strategies and common mistakes. Whether you're deep in the tax season or just feeling the pressure of April 15th looming, this episode is for you.
00:00:25
Speaker
My guest today is someone who knows this season inside and out, Dan Moore, CPA and founder of the DT Moore & Company in Salem, Ohio. Dan brings over two decades of experience working with individuals and small businesses on tax planning, accounting, and compliance. He's also an educator and a thoughtful leader in our field.
00:00:43
Speaker
And he's a great guy. Having served on the IRS Advisory Council, multiple AICPA tax committees, and currently serves as the co-chair of the AICPA Tax Strategies Conference Planning Committee alongside me.
00:00:55
Speaker
He's taught on income tax as an adjunct professor at Youngstown State, spoken across the country on tax topics from social security planning to annual updates, and continues to support the growth in community organizations
Dan's Conference and Career Journey
00:01:07
Speaker
alike.
00:01:07
Speaker
ah This year, Dan is also speaking at the AICPA Engage Conference on a session titled, Don't Treat Burnout as a Badge of Honor, which I think, based on the timeframe of the year, will come in very handy.
00:01:19
Speaker
It's a timely and important conversation about our mental health in our profession and how burnout affects us and what we can do about it. So we'll touch on that today with Dan. So Dan, welcome to the show. Hey, Mark. It's great to see you.
00:01:31
Speaker
Looking forward to our conference in June. And great timing. you know youre It's testing my my um you know my coping skills of not feeling burnout when I'm doing a podcast at the end of March, right right at the heat of tax season. But you I always step away for a moment for you to talk about something that we are both very, very passionate about.
00:01:57
Speaker
Yeah, no, I think it's great. um But before we kind of even jump into stuff, Dan, why don't you tell everyone, how did you get into accounting in the first place? And tell us a little bit about your story from you getting to where you are today.
00:02:09
Speaker
Yeah, I mean, my original you know college aspirations were to go to law school and um kind of thought, well, I'm going to start out with a focus probably just the, you know, just do like a general business focus. And it was my second semester in college. I had an accounting course and I'm like, wow, I kind of like this. This makes sense to me. um Had a very engaging very dedicated ah ah accounting professor and you know, just really clicked. So, you know, I still always had the aspiration of going as you know, kind of a pre-law direction, always had the aspiration of going to law school.
00:02:56
Speaker
um But, you know that was slowly like, I'm kind of liking accounting. this this seems like a good fit for me. and to be quite honest, I've always been,
00:03:07
Speaker
financially minded um with my own personal finances. I mean, I still use the original Quicken file that i set up. I was probably in high school college. I don't know whenever Quicken first came out. I've had it ever since.
00:03:23
Speaker
um You know, I could tell you where I've had dinner in in Rome in 1997 because I have my credit card charges, you know, still have all that information. um So, you know, I'm going to college. My sister-in-law had actually opened up a small little boutique accounting firm, um focusing on really just small businesses.
00:03:44
Speaker
um So I had dabbled in corporate accounting. I worked for bank as an intern, which was a great experience. So I'm still in college working in a bank.
00:03:58
Speaker
um That was a great experience because I think everyone should have a little working knowledge of the banking industry. um so not only did I get to work within um the corporate accounting side of the the bank, but they let me work in the branches during ah the semester. So I'd work, you know, maybe 10 or 15 hours in a branch as a bank teller.
00:04:24
Speaker
And like learned a lot of things, very good things about banking and, and um you know, how transactions work, how loans work, um which was a great start. But um yeah, my sister was sister-in-law's firm was starting to grow. And so she said, hey, will you join me um after you graduate? So yeah,
00:04:48
Speaker
So yeah, I was like, okay, so i actually quit my job at the the bank and and started working tax season with my sister-in-law. um So my first tax season would have been 1998.
00:05:01
Speaker
um And it was it was fun. It was exciting. and And so she asked me to join her as ah as a partner after I graduated from college. And so I said, yes.
00:05:16
Speaker
That's great. Now, the funny part, I don't know if it's funny, but about six weeks after i started working, my my brother accepted a job in Connecticut and we live in Ohio.
00:05:30
Speaker
ah And so they decided to move to Connecticut. And I ended up taking over her little practice within so nine months of me graduating college.
00:05:42
Speaker
and within a few months me passing the cpa exam so just kind of dove right in there mark and that that's it i mean then here you are
Growing the Firm and Facing Challenges
00:05:51
Speaker
you're still you run the firm and uh you got a great firm and great clientele and yeah can't get enough of it i guess that's right Now, your client base, you know you work with a lot of small businesses, but you know you have businesses and individuals that do a little bit of everything. like How is that client base shaped over the years and evolved? And in it and and and return, how has it really um adjusted your approach to to the busy season that you're dealing with now?
00:06:22
Speaker
Yeah, i mean, there's a couple of different things that I would think about when you ask me that question, because... You know, my career and my firm, I kind of like at the same time and parallel also did a lot of education for myself, which also led me to enjoy education and then started doing my own federal tax update presentations and kind of worked the continuing education circle for a while.
00:06:57
Speaker
And I think that was and part because my firm just slowly started growing. It wasn't overnight. um It happened very quickly. not it didn't, no, it didn't happen quickly, but it just, it happened. And then all of a sudden I woke up and I'm like, wow, where, what, what happened?
00:07:15
Speaker
Right. But it just seemed like every year you you make more connections, you um you get a ah more difficult client and you work with them and you learn their situation, you learn their tax complexities.
00:07:32
Speaker
um Then I'd go and study it if I didn't understand fully what, you know, their transactions meant. And then after that, I'd go teach it. So, um you know, my clients kind of have grown as my practice has grown, which has been um and very rewarding.
00:07:53
Speaker
And, you know, when I look at particularly small firm owners, I think that um one of the biggest challenges is just not knowing what you don't know.
00:08:05
Speaker
and um you know, that to me, that's scary. And I can't believe when I look back, I'm like, wow, you know, I really was, you know, had an issue with a client that I was like, oh, I spent a lot of time learning and understanding it. And today I'm like, oh, that's nothing.
00:08:23
Speaker
That's the least of my problems today. So yeah, I think that, you know, the, my client base, my, my firm really it's gone hand in hand and we've just kind of grown up together. Yeah, no, I think that's, that's great. And I think, you know, a lot of people out there, they're, you know, thinking about, Hey, if I'm going into accounting, I'm going to go into tax.
00:08:46
Speaker
Should i work for a large firm? Should I put in a lot of years and try to work my way up? Should I start my own thing? should you know And obviously, you know there's different avenues someone can go. But with that being said, you know e ben you and I have been through a number of tax seasons now, not that we're old or anything like that.
00:09:03
Speaker
But how do you see that the pace has changed over the years? Obviously, we've had you know we've had COVID. We've had different aspects of things that have evolved, nine eleven before. But I mean...
00:09:15
Speaker
talk Talk about you know the pressures and how things have changed that you've seen in this process. Yeah. and And to look at the past five years is is you almost have to carve that out to some degree because of the challenges ah between PPP and ERC and stimulus payments and um all the other issues going on.
00:09:37
Speaker
um i mean, the pace is...
00:09:42
Speaker
Definitely. i don't know. I think when you're in the middle of it, you probably think it's the worst that ever could be. and you know, it really, it isn't, you know, if I went think of what I, we used to do 15 years ago, I'd be like, oh, that'd be a walk in the park.
00:09:56
Speaker
um You know, easy to to do, but I think, you know, the tax season compression is, is a big issue. i felt like this year, a lot of brokers were getting they're um 1099s out late.
00:10:11
Speaker
So it felt like later in March than what we'd seen in the past few few years. That being said, I haven't seen quite as many corrected 1099. So maybe that was the the give and take there. We don't have, hopefully, who knows? We've got three weeks left. Who knows what's going to come in the door? Right. um i think the complexity of the the law is a challenge i also think you know we have a changing demographic and then um you know our our clients that are getting older in years are having different types of issues than our clients that um you know we're
00:10:56
Speaker
80 years old back in the 90s. you know Large amounts of wealth are starting to turn over. And so you know we have clients that but are inheriting a large sum of money at 70 years old um that 20 years ago we didn't necessarily see as as often. So you know that's creating a whole other planning aspect for our clients that we're spending a lot of time helping people guide through these issues especially with with wealth transfer um and just you know various transactions that really people aren't asking the right questions um they don't realize that um just sneaking at ten ninety nine s because they
00:11:42
Speaker
sold the family home that mom and dad transferred to their name before they passed, you know, 15 years ago, and they have no idea what the basis is. I mean, all those kinds of issues and just sneak it into your tax packet and, and you know, see see, I don't know what they're thinking when they do that, but there's definitely a conversation to be had. And so,
00:12:05
Speaker
um you know, finding and
Evolving Role of Accountants and Tax Strategies
00:12:08
Speaker
identifying those planning issues. i mean, you Mark, you and I talk about this a lot, you know, finding planning and and doing advisory work for clients. There's just so many. I mean, I have a list of people that I've, you know, either emailed or written a note to that say, um hey, you've got, you don't know it, but I know it, that you've got some serious things you need to start thinking about. And and let's let's have that conversation.
00:12:34
Speaker
Yeah, no, I think i think there things have changed. And I think you know you know the idea of being the trusted advisor, I mean, it's more prevalent now than I've ever seen. And and that is, they're talking to you about their family, their wealth, their their transfer of wealth,
00:12:50
Speaker
They're hemming and hawing on whether just get a basic will or estate done. And I think all of that falls in our lap. and And so we're just not putting some numbers on a tax return or making sure devits equal credits. We're doing a whole lot more than that.
00:13:03
Speaker
And I think that adds a different perspective to what this looks like. Now, obviously, we're in the final stretch of tax season. We got roughly, as of this recording, three weeks to go.
00:13:15
Speaker
How are you managing your process and your firm, your employees in this final three weeks? tell it talk Talk about that to some level. Yeah. You know, I've i've actually been thinking...
00:13:28
Speaker
a lot about that, especially even in my own review process of you know not getting sloppy, making sure we're not missing things, still taking the time to ask questions and not make assumptions regarding transactions,
00:13:48
Speaker
um and just even basic review items yeahs but You know, it's the it's the scenario of someone gets a K-1 because they got some ownership interest for the company they work at. There's been, you know, they there's been no income distribution because there's been no activity and, you know,
00:14:15
Speaker
you didn't know that, you know, part of the business was sold off and there'd be a K-1 coming with this massive capital gain because the client didn't call you call you and there's carried interest. And, you know, it's usually like, eh, there's never any activity on that K-1. It's always zeros. and And then the one year you don't ask, you find out, oh, but, you know, the K-1 this year has $400,000 of income. Is that going to be a problem?
00:14:41
Speaker
yeah And, It's April 10th, and you're backpedaling to try to so help them out with that. um And you you hope those don't happen and you think, how does that happen? But it does. It's the random um you know client's ah spouse passed away and and there is of savings bond interest that you know was just kind of slipped in with the tax packet.
00:15:16
Speaker
Or the estate. And, and you know, all of those are just big things. um And, you know, they're they're just kind of like, okay, we don't want to miss things. We want to make sure we have the conversation and do the right thing by our clients.
00:15:33
Speaker
um Yeah. And so so I think that crunch, you know? Yeah. and The crunch is huge. And I think, I think we, you know, we put a lot of pressure on ourselves to, you know, and I think you said in the beginning, you know, not get sloppy, not make those mistakes and really still look at the output to make sure, you know, we're fulfilling our role to make sure that if we're signing off on a tax return, that, you know, it is accurate and to the best of our knowledge. Right.
00:15:57
Speaker
Right. But the flip side of that, what are some of the common mistakes clients in this next three weeks that are scrambling to get their documents together? Did you see, you know, and and what can be done to alleviate that, if anything?
00:16:12
Speaker
Yeah, I think it's just a lack of education of the impact of transactions. 1099k threshold reporting, you know, it's people that, you know, have a little eBay thing going on on the side and show up with this ah sudden, you know, tax document. Well, I've been doing this for years, but now I've got this reported income. What do I do with it? Is this a problem?
00:16:39
Speaker
Or, know, you know taking early distributions out of a retirement accounts or taking a distribution out of a Roth not realizing there's additional information we might need um to calculate that the tax and impact impact on that.
00:16:56
Speaker
So there's all these things that just people don't think about and they're like well is that going to hurt me? It's common thing a client says well i don't know to find hurt but it's not going to be pretty. Yeah. um You know, some advanced planning need to be done and and you're going to have to do some scrambling to to get to get us the information that we need.
00:17:17
Speaker
um And so I think that is just unorganized clients, clients who don't, you know, keep ah kind of a checklist of their documents that, you know, what they have as far as their investment accounts and where their retirement money is coming from.
00:17:36
Speaker
you know Many times when we're struggling with a client, we'll create a checklist and you know a so just a short brief, not an organizer packet, but um a checklist just to be like, this is what we're going to need next year as long as nothing else changes. So um I think that is... And then you know some people just get scared. They're afraid of what it's going to be like. So they're like, well, if I just sneak it in the packet, maybe it'll go away. I don't know.
00:18:02
Speaker
I don't know what the the thinking is on that. Yeah, no, I get it. And I know that myself and my firm, we like to try, not with every client, it's impossible, but for most to try to do some year-end tax planning in the fall and really get an idea of what that liability looks like. So whether we're filing, love when I get the tax return done and pull up the tax projection and I projected you to 100,000 and you came at 85. So you kind feel like hero, but- but um Right. But ah if it goes that way, hopefully.
00:18:37
Speaker
Unfortunately, anyway some of the capital gains this year didn't go as in our favor. Exactly. But you know you know here we are. We've got three weeks to go. And obviously, you know you'll be continuing to file up to probably the deadline. But you know there are some returns you're going to have to extend.
00:18:54
Speaker
um So how do you make decisions or you and your employees make decisions on who to extend and how to communicate that decision um to them without calling them at five o'clock on April 15th?
00:19:06
Speaker
Well, what is the process you go through?
Communication and Client Management
00:19:08
Speaker
Yeah, that's ah it's a ah the that breaking point um of when you have to make the phone call to client, be like, I can't get this done We're going to have to do an extension.
00:19:19
Speaker
Most clients are fine with it. You know, we try. yeah If we know they need to make a payment with the extension, we want to get that done at least by the 10th so that the client has time to to make the payment or you know mail in a check.
00:19:38
Speaker
you know Even calculating you know a projected extension payment is a challenge. um We, as a matter of practice, you know anything pretty much that comes in our door, we consider it to be late.
00:19:54
Speaker
um And once we've determined if there's no tax liability um where we need to talk to the client, we automatically extend all of them. Got it. um That's just kind of our firm practice because, you know, the worst thing you want to have happen is there is a power outage on the last day of tax season because it has happened to us and and we can't transmit. So, know, we just out of caution, we'll we'll start to some submit extensions in. And, you know, for those that are, that are,
00:20:27
Speaker
getting refunds obviously it's no big deal anyway but just is a level of comfort within within the firm then there's the clients that always file an extension that we need to identify and and address and project their rest their extension payment first quarter payment you know usually we will maybe pad the extension amounts for first quarter just to give us some wiggle room if we don't know what things are going to look like but um Yeah, I often think I want to put a big checkbox like if you're cool with an extension just check this box, you know, and we'll be done with it.
00:21:05
Speaker
But, you know, we do the best we can ah to get them out and communicate.
00:21:12
Speaker
I think you said something that is, I think and everyone listening can really learn from, and that is, you know, clients need to move money. they You know, you can't call them on the 15th and say, you got to write a big check, right?
00:21:23
Speaker
Yeah. um and And if it's significant enough, I mean, whether that's significant is 10,000 or it's 100,000, whatever the number ends up being. they need a few days, especially if they need to liquidate or move money, usually in at least three business days, but sometimes five is good. So and you mentioned getting it, knowing by April 10th is a, that's a solid, I think, recommendation that I would make sure everyone takes a heed to. Because I think,
00:21:48
Speaker
It's just you don't want to be calling the client on the day of and saying, here's what you owe. And again, i know things happen, but it's just a better strategy. Yeah. And, and you know, the IRS opens those envelopes quickly. so you you don't even get the couple of day buffer of mailing a check. So that's right.
00:22:08
Speaker
Now, what are some quick wins? you know CPAs and accountants listening to this right now, you know how what can they apply to reduce the chaos? Maybe are there tools, checklists, delegation strategies that you've you've gone through, Dan, or developed over the years that kind of say, all right, I know every year has got its own life, its own legs, but what what can I do to help myself in the midst of this chaos down the stretch?
00:22:33
Speaker
Yeah, i mean, we have an internal checklist and, you know, everyone in my office, you know, staff that ah they're working on entering returns, they complain about it.
00:22:45
Speaker
But it actually had someone yesterday so you know what? She's like, I was working on it was a whole family. it was mom and dad. It was the kids. It was, you know, kiddie tax issues.
00:22:58
Speaker
And, know, she got a phone call in the middle of it. And, you know, next thing you know, it's like all the documents just got jumbled. And she's like, I'm working on the the parents' return, and I started entering the child's W-2 on the mom and dad's return because I wasn't paying attention. And she said, ah you know I started filling out our tracking sheet. And she's like, I'm like, what where are these numbers coming from? They're not matching the return. and
00:23:29
Speaker
And so so I'm like, that is why we do the tracking sheet that causes you to slow down, gives you something to look at and reflect like this doesn't look right. It's something is going on here. And so, you know, those are the things that that we do internally.
00:23:48
Speaker
um We also, as returns come in um particularly bigger returns where, you know, we may have a lot of brokerage um statements, you know, particularly when we had, you know, was the last year TD Ameritrade was now Charles Schwab.
00:24:03
Speaker
Right. And so, you know, we have our system tracks. We've got unoped you know unresolved items on old TD statements. But now we've got Charles Schwab and account numbers aren't the same. and And, you know, we're trying to make sure we're not missing anything. So we do an initial check as documents come in just to compare to be like, OK, it looks like we have everything.
00:24:28
Speaker
And and that way we can send the client on a you know gathering expedition to try to get additional documents for us if it looks like we're missing them. And we try to do that more in the beginning as we're getting closer to the end ah just to have so they have time to get the documents to us and we can i hopefully finish things up.
00:24:49
Speaker
That's good. no Those are great, great points there. And I think and a lot to be learned, you know, from what other experts are doing out there to to help mitigate some of the ah the stress at this time of year.
00:25:00
Speaker
so it also doesn't help. I mean, just sorry to interrupt Mark, but I mean, it doesn't help to to actually pick up the phone call and just talk to the client. You know, um completely agree. What is going on here?
00:25:11
Speaker
Yeah. right I'm tired. um You know, you, you put in a closing document for a property and there's a bunch of receipts and, you know, where did, what is this? What does this mean?
00:25:25
Speaker
Where did this property come from? When did you purchase it? And, You you try to piece things together before you climb. I'm like, listen, I'm not going to waste my time. Just tell me the story. What's going on with this? Right.
00:25:36
Speaker
Yeah. I can't read your mind. Yeah. So. You know, obviously there are returns we have to extend, right? And, you know, sometimes clients or even CPAs out there, they have varying opinions on whether to extend or not to extend. And, you know, all these taboo, well, you shouldn't extend. It's a red flag, all these things.
00:25:56
Speaker
So tell me what do taxpayers and CPAs get wrong about extensions or the the thought of extending I mean, I think the first thing is the the red flag scenario.
00:26:07
Speaker
um I always tell clients, hey, your extension is going right along with mine. You know, I've never filed my tax return by April 15th. So, um you know, it's going right along with yours. So we're going hand in hand through this. It's going to be fine.
00:26:25
Speaker
um i mean, Mark, how many returns have we amended? we get a new client. We look and You know, maybe a reputable firm, you're like, they don't put out, you know, garbage work.
00:26:38
Speaker
Right. But you're looking at the return and there's like a major flaw with it And then, you know, always flip to the signature page and see when the return was signed. And it's usually April 14th, April 15th.
00:26:52
Speaker
You know, so someone was... you know, made a bad judgment or they just did the best they could with what the client provided. And it was and ultimately, you know, harmful to the taxpayer because they ended up paying more tax.
00:27:08
Speaker
Yeah. And, you know, so I'd rather file something correctly, even if there's going to be a balance due on the return, then do it incorrectly and then have to make the decision.
00:27:21
Speaker
do I amend? Because I think that's more of a red flag of anything is, you know, if I have to go in and say my schedule C income's adjusted, you know, $40,000 or more um because we didn't really reconcile our QuickBooks account the profit and loss we gave to our you know, CPA was incorrect.
00:27:44
Speaker
um You know, that that's just a risk. So I just, you know i think that from a preparer standpoint, the the taxpayer standpoint, you just have to approach it from, um
00:27:57
Speaker
ah IRS doesn't really care when they get it. um You know, they just want it correctly. And if you're doing the right thing, then do an extension. Mail something in and and with the extension and and settle it up in the summertime. Yeah, I can't agree with you more. I i think when you see, um you know, I always assume everyone knows what they're doing, whoever the preparer is. And when you see most returns closer to the deadline, you see mistakes.
00:28:25
Speaker
that you know that if you ask them in July, they're going to tell you, no, I wouldn't do that. But then, you know, it goes out that way and it happens. We see this all the time. And I'm sure I make just as many mistakes as everyone else, right? I mean, you open up that file and you're like what was I thinking?
00:28:42
Speaker
And that's the problem. right Maybe you were right, but you're like, I need to think about that. Yeah. No, exactly. So, and when you guys go through the extension process, do you guys, um as far as use any tools or templates or how do you track, how do you track, you know, your return lists and who's getting extended or who's not, do you have a tickler list?
00:29:04
Speaker
What process do you guys go through? Yeah. It's multiple spreadsheets. There's a spreadsheet of the people who request via email or you know call into the office to request an extension.
00:29:17
Speaker
um so it all gets compiled compiled. um You know, when we perform our returns forward from the previous year, so we don't pro perform a we only pro perform a ah return if we're working on it.
00:29:33
Speaker
So we don't just mass perform everyone. Yeah. um I know some firms automatically just rule everything forward and we don't do it that way. So when we're going through our list, so like I just did an initial run last year or last week of the clients that I know we're going to do extensions for.
00:29:54
Speaker
um I perform with them, those clients, but then print a report and then we use that report to generate the extension for all of those clients. And those are the ones that we just now are automatically going to do an extension for.
00:30:09
Speaker
um We actually just kind of tag every return as it comes in through our practice management to be you know an extension return and then create as an item so that it gets checked off.
00:30:25
Speaker
you know Particularly if it's a new client, you we want to make sure that we're you know, going through their documents and getting them set up as a client properly, onboarding them into the firm.
00:30:38
Speaker
And then, um, you know, part of their, our process is to mark them as an extended return. That's correct. Yeah. Well, those are good, good, good points there. And I think having a system is, is key, whatever that system is that works for you and your organization, just have a system.
00:30:55
Speaker
So you don't, nothing slips through the cracks. And I think you know ultimately we want to process very few extensions on the last day. we want to have them done about five days before the end of the deadline.
00:31:09
Speaker
And again, that's just the storm that comes through and knocks power out, knocks the internet out. We don't want to get caught without being able to get those processed.
00:31:23
Speaker
Yep. And in the process, whether you're extending or even trying to you know get out 10 more returns right up there right at the end of our, what are some of the, you know when you're talking about, obviously we want to get those returns. We want them to be correct. We want them compliant, accurate.
00:31:40
Speaker
So when you look at it, what are some of the biggest last minute errors you've seen that could have been avoided, whether ah youga it was your firm or you've seen on other people's firms preparing? What are those last minute errors you think that are caused by rushing?
00:31:54
Speaker
ah Backdoor Roths are a huge one. um You know, you review the return and you see magically $7,000 or $7,500 or $800 or $8,000 as a distribution from a retirement account. It's like, well, that was actually a backdoor Roth that wasn't properly or recorded and showing up as taxable income. That is a big one. Yeah.
00:32:19
Speaker
we actually end up amending not because we did it but amending if we get a new client um where they failed you know their preparer failed to catch that the client did a backdoor roth now the client uh didn't help the preparer any by saying oh by the way i did a backdoor roth and that's why i have this document but I think that's the the big, one of the big areas of easily missed transactions.
00:32:50
Speaker
um You know, incorrectly, you know, not reconciling a brokerage statement, treating something as short term when it was long term. is another right i think highly missed area not looking for state exclusions on you know tax exempt income if there's a state exclusion and not looking if the the client has a large amount of tax exempt that may get added back automatically on the state side of things
00:33:23
Speaker
You know, we're in Ohio, so we have school districts, we've got municipality city taxes and um missing that client who moved. That's another for us, that's a challenge where you know you think oh the city return is just you know two percent of their wages but oh they moved from one taxing city to another and we didn't do that allocation and might be two separate returns depending on the city so there's just a lot of little little nuanced things that you maybe have a set it and forget it kind of attitude as a long time client and then you forget uh you
00:34:06
Speaker
Two years later, they come in with a notice that says, hey, I've been living in this school district and haven't been paying school district tax. Like, oh, well, we still we never moved you. So on change your address, but we didn't change your school district. So, um you know, not.
00:34:24
Speaker
Reconciling a K1 to make sure that it you know everything is flowing through properly for the K1s, which are a challenge. I mean, there's just so many little things that you could easily, you know, it's all this stuff you're your software doesn't give you a diagnostic on.
00:34:42
Speaker
And um You know it may be buried in kind of like some FYI is, you know, in the diagnostics and you forget to check those where your software might say, hey, you might want to consider this because of the type of transaction it is and and you don't pay attention. and And so you had the warning there, but you just didn't go back and check it.
00:35:04
Speaker
Right. And so as people, is to to avoid these errors and all that, and to even avoid some of the messy stress at the end, are I mean, are what's the best way for CPAs to educate their clients to avoid this situation? is it Is it, hey, in the fall, sending out communication to them? Is it telling them in person?
00:35:25
Speaker
um what What do you think are some good best practices from that standpoint?
00:35:31
Speaker
um I think that explaining to the client the challenge without seeming whiny, you know, like, like you're just whining out, I'm tired. ah I mean, but it really, truly explaining to the clients, the complexity of their return, the complexity of the transaction or explaining like, you know, this really could have been a lot smoother had we talked in February or excuse me, in and October when you, you know,
00:36:02
Speaker
closed on the transaction that would have been super helpful because then we would have had time to gather all the information we needed um and it would have just been a much smoother transition but i also think too we have to we have to force the client to talk to us and know Some clients say we have to hold their hand you know through the whole entire process of every transactions and other clients.
00:36:33
Speaker
Well, I didn't want to bother you or I thought you were busy. um And we have to explain to them that's why we're busy, because we're helping people just like you and you need to ask questions.
00:36:45
Speaker
And even if it is the most you know simplest transaction for us, it isn't simple to them. um But even, you know, telling the client, you know what, I want to have a post-tax season planning session. We're going to do it sometime late summer, early fall. We're going to reach out to you.
00:37:03
Speaker
um Set the expectation of what you're kind of going to cover at that meeting. And I and i think that the value that you build on that is is great. We can't do with every client. Mark, you said, you know, there's people that we wish we would have communicated with or talked to. You can't.
00:37:22
Speaker
do it with everyone. We kind of pick a topic. Sometimes, you know, there's certain years where we decide um any client that is getting close to an RMD age and may have an an issue with income-related Medicare adjustments, we're going to try our best to reach out to all of those clients.
00:37:43
Speaker
So it's just a matter of, you know, communication and then tracking that internally to, you know, We're saying you don't want to tell the client you want to meet with them and then don't follow up yourself to ah set that meeting.
00:37:59
Speaker
That's great. and And obviously, the more you communicate with them, the more you're forthright. i think yeah yeah you're kind of setting, you know they're not dictating to you how you're going to run your firm. You're kind of saying, here's how we want to do it.
00:38:12
Speaker
And we'd love to do your work, but this is how it's going to fall in line. So I like that. yeah yeah Now, obviously, we get through these three weeks and then we get to April 15th and everyone wants to take a deep breath.
00:38:25
Speaker
How quickly do you try to do like a post tax season debrief with your team to kind of look at the pros and the cons of the past, you know, three months or so? And and and how audio do you prevent future mistakes and all that? How quickly do you jump in and try to get some feedback from your team?
00:38:42
Speaker
Yeah, you know, and this year I'm wrote like the way that the Easter holiday falls and and Good Friday is after tax season um is perfect because it gives us a reason to close the office on Friday. um And we always have a post tax season party, so we plan that for Thursday afternoon.
00:39:04
Speaker
So Thursday morning we're going to do our post tax tax season debrief. um We have a running document that we keep what worked, what didn't, what we would like to change for next year.
00:39:17
Speaker
um And we just round robin around the room. It's nothing formal. um We just, you know, from A to Z, go through the process that we do internally, um discuss what we tried differently this year. Did it work? um What challenges we ran into?
00:39:38
Speaker
um What technology we need to either think about implementing or getting rid of? um As you know, I can say there's, you know, one technology platform this year that we're maybe not going to continue, you know? So there's certain things that we have to do it now and and it's tough. So we just make it a fun event. You know, in the morning we get together, have this great discussion and then, you know, go have some ah nice lunch and some partying and some, more you know, cheesy awards that we give out the at the party. And then we'll have the long weekend to hopefully recover and,
00:40:20
Speaker
feel like we're, we're back to normal life. So. Which is always good. It's a, it's a good feeling. I get it Yes. Yeah. Now with all that, you know, we're talking about, you know, maintaining your mental health and sustainable success throughout this entire process.
Mental Health and Stress Management
00:40:36
Speaker
And I know you are um co-presenting at the AICPA Engage Conference on burnout and mental health. So what led you to have an interest in that topic and, and take a, you know, want to speak on it for that matter?
00:40:50
Speaker
Yeah, and then I'm going make a statement first. And I think it was probably a joke because kind of knew the person that made the comment. But i was on um I was on a conference call and doing a talk. And I said I was suffering from burnout.
00:41:10
Speaker
And you know this guy that I know you know wrote a comment that said, oh, you're too young for burnout. I'm like, well, I'm actually older than you probably think I am, but um no no, you're never, you know, no one is too young for burnout. There's no age. You don't earn your stripes. um You know, anyone can suffer it. There are 12 year olds that are under so much pressure between sports and school that are are suffering burnout. So um there's no age um that you have to reach.
00:41:46
Speaker
But I think that, Firm growth, um i had um was teaching continuing education and i ah committed to a pretty pretty aggressive teaching schedule. So my entire fall and early winter was spent on the road a significant amount of time.
00:42:05
Speaker
Meanwhile, a growing firm and just having some staffing issues that we needed to work through internally. um just real and then the COVID pandemic really just led me to going down a ah path that I wasn't really happy with the way my life was going. And and I knew but i if I didn't make some changes, that it was just unhealthy and I didn't want to be unhealthy anymore. um And so it's been a long process and I've done a lot of things. You know, I first went off to a retreat and spent the whole entire weekend learning how to breathe again and breathe in a way that chet calmed me down. And so little things like that.
00:42:48
Speaker
I wanted help with management and running the firm, but I didn't want another CPA to tell me what I should be doing. um So I joined a coaching group and um they're actually based in and England and the United Kingdom. um So, you know, their concept of taxes are completely different than ours.
00:43:09
Speaker
So, you know, so we have had a great experience working relationship over the almost two years now and just a lot of things that we do. And I'm just really passionate about what i think many practitioners are feeling.
00:43:27
Speaker
um i know When i can get up in front of a room, um um one of our colleagues and I, a few other people did a presentation at Engage last year. And the look ah on people's faces, and this is you know, the big tough guys too, were like shaking their head like, I know exactly what you're talking about.
00:43:50
Speaker
And no one should live their life that way. And I think that's the um kind of big thing. So what I've done is I've expanded that to my team. So I've got a team of five within my office that are also doing ah kind of an abbreviated version of my coaching just to help them with their career development and their own handling of stress within the firm.
00:44:12
Speaker
It doesn't have to be the the way that's... you know you read about or you hear about the the workload and the challenges. It doesn't really have to. And there's a lot of great firm owners that are really stepping up and saying, know, we're not going to work our tax season that way.
00:44:31
Speaker
um So, yeah, I mean, it's just um it's a personal thing. And yeah, I love to talk about it. I think it's great. And I think, you know, I know myself, you know, a lot of, we put a lot of the pressure from the clients, the perception, the work, we put it on ourselves and it's kind of in between our ears.
00:44:51
Speaker
um And, and ah in the reality is we got to this compressed timeframe to do something, whether we're filing or extending. But with that being said, you know, the more, i think your, your advice is so key, learning to breathe, learning to take time for yourself, whatever that looks like is, is so key because once you do that, it it reflects down on your team and the people you're leading. And I think that makes a huge difference.
00:45:18
Speaker
So what is, if you're, if I were to ask you, what is the one thing you wish more CPAs, you know, you and I talked to a lot of CPAs in our local community around the country. What is one thing you'd recommend they do to take care of themselves during the busy season more of?
00:45:34
Speaker
you know, so Every morning I have a breathing ritual that I i've i do, and I've done that the past three tech seasons. So that's a huge beneficial thing for me.
00:45:47
Speaker
But what I have added to that this year 30 minutes of exercise a day. And we get to the point and and I'm getting to that point myself right now where it's like, I should probably go for a swim tonight after work, but I'm, know, I'm doing this podcast. I've got two client appointments after this. going to be tired, but I only need to get into that pool for 30 minutes and they don't have to be the quickest slaps I've ever swam.
00:46:15
Speaker
But um I think doing just that you have the time to do it. You know, you realize, you know, if I would have, done that, you know, I would have just, you know, spent a half an hour scrolling on my phone or doing something completely and mindless.
00:46:35
Speaker
um So why not do something mindless and go for a walk and get some fresh air? And certainly that has made a big difference for me as well. No, that's it's great advice. I think people more whatever that looks like for you listening right now, like, you know, what can you do to help yourself, whether you are in public accounting or maybe you work in corporate accounting, whatever it is, you know, just make sure you're doing something. And I, I get up early and I, this, I do an hour in the gym every morning because it's just part of that.
00:47:07
Speaker
it it, it sets myself up for the day. it takes the stress away and gives me that energy to keep pouring through, you know? So, yeah. Yeah. Well, Dan, this has been incredibly helpful. And thank you for taking the time to join me today. Your insights around tax filing strategies, extensions, handling these client pressures, and obviously the mental health wellness couldn't come at a better time. So thank you for joining us.
00:47:33
Speaker
Thank you, Mark. And to our listeners, you can earn CPE credit for listening to this episode. Check out the show notes for the link to claim your credit and to learn more about Becker Prime CPE subscription, which gives you unlimited access to courses, updates, and podcasts episodes like this one.
00:47:49
Speaker
Thanks for joining us on the Tax News Now. Be sure to subscribe, leave a review, and join us next month for more insights to help you thrive in the tax and advisory community. Until then, stay informed, stay proactive, and keep making an impact.