Having taken the CPA exam four times now has taught me a few things; it’s also given me hindsight as to several things I would have done differently that I would like to share with any first time candidates.

Looking back on my approach to passing the four sections of the exam

1. I took too much time in preparing at the beginning.  Granted some sections are tougher than others, I still feel I took more time than was necessary to prep for FAR.  I let life get in the way, which allowed me to justify the excuses I made as to why I was not ready to schedule my exam.  You must be dedicated once you start, and you cannot slack no matter how tempting.

The time, effort, and money you put into the exam are too precious to waste. Two failed attempts later here I am moving on to AUD.

2. A two-month window works best, which is the suggestion of Gleim and other study guide providers.  In this timeframe, you are less prone to forget the information you covered at the beginning of your studies, and you will have just enough time to review before test day.  The more sections you can cover right out of school and into your career the better.  Everyone’s situation is different, but there is no doubt that once you start working and you have a family it will only get harder to focus on the exam.

You will only get busier as life happens.

3. Retake a failed section as soon as possible regardless of whether you started studying for another section.  I let nearly a year pass after I failed FAR before I tried again. I lost almost all relevant information and started from scratch again.  It would have been much smarter to retake it immediately after learning I had failed.  I know this because I got the dreaded 74 on AUD my first time through.  Instead of throwing in the towel and continuing with my next section, REG, I scheduled an appointment to retake AUD two weeks later.  Though I have not gotten my score back, I know that I was able to pass simply from having taken two versions of the same test so close together.

With that being said, the clock is ticking. I am in over-drive right now trying to make sense of REG and hoping to take BEC before tax season starts.

4. Tax season… another justification for pushing back the exam.  I strongly recommend not hiding behind tax season as a break from studying if you are a candidate and working for a CPA firm.  If your window of opportunity to pass the exam in eighteen months has not started, that is great. But, you can still take some time to pick up a book and do some reviewing.  If your timer has started, you have even more reason to stay on top of your studies.  Understandably, I would not recommend taking the exam in the heat of tax season; but, do not put it on the back burner.  Be ready to come back strong once it’s over.  It can only help you.

I know the exam is overwhelming, discouraging, a drag, and a “necessary evil”. This is why I cannot stress it enough not to drag it out.  It will save you a lot of time, money, and sanity to get it done and over with as quickly as possible.  Your social life will be non-existent during this time, but it will be well worth it afterward to have those valuable three letters after your name and a fancy piece of paper to hang up in your office.  Your career in public accounting will be solidified, people will want to hire you, and you’ll have something you can be truly proud of…something you worked hard for to achieve.

Time is a wasting – GO STUDY!

Author: Mike Glowacki, Staff Accountant

The topic of generational differences has been discussed a lot at our Firm in recent years. It is common knowledge that many Baby Boomers are exiting the workforce and more Millennials are entering. At Brickley DeLong, we have made it a point to not only understand the differences between the generations, but also to learn the similarities so we can “bridge the gap” to best serve our clients, Firm, and employees.

On October 12, I attended an Association for Corporate Growth (ACG) event on generational differences. The speaker, Lorraine Medici of ACC of Express Employment Professionals, highlighted that the key to working with employees of different generations is to understand the assumptions and interpretations you have regarding the different generations. Then, you must learn to set those aside.

Take a few moments to jot down what words pop into your head when you think of the following generation labels: Traditionalists (age 71+), Baby Boomers (52-70), Generation X (38-51), and Millennials (21-37).  Are some of the words negative?

Now try the same exercise, but only write down positive words.

Before approaching an employee or client, from a different generation with a task or project, try to focus on the positive characteristics you believe comes with their age, not the negative ones.

We all know generational differences exist, what matters is how we as individuals decide to understand and use them for the greater good.

Author: Elizabeth Kramb, Supervisor

We would like to bring to your attention a misleading “Annual Records Solicitation Form” targeted at businesses.

This document is not an official government form, although it is made to look that way. This form is a solicitation of services from a private company. When reviewing the document, an indicator that it is not an official government form is that it states “Michigan Council for Corporations is not a government agency…”.

If you receive such a form, you do not need to complete the form and send in the $150 dollars, unless their services are wanted/needed.

If you have any questions, please contact Brian McFarren at bmcfarren@brickleydelong.com or (231) 726-5815.

New Due Dates

Forms W-2 and W-3

The due date for filing 2016 Forms W-2, W-2AS, W-2CM, W-2GU, W-2VI, W-3 and W-3SS with the SSA is now January 31, 2017, whether you file using paper forms or electronically.

General Instructions for Forms W-2 and W-3 

1099-MISC

Public Law 114-113, Division Q, section 201, requires Form 1099-MISC to be filed on or before January 31, 2017, when you are reporting nonemployee compensation payments in box 7. Otherwise, file by February 28, 2017, if you file on paper, or by March 31, 2017, if you file electronically. The due dates for furnishing payee statements remain the same.

Exceptions to reporting.

New exceptions to reporting were added by P.L. 114-14 (compensation for disability or survivor’s benefits for public safety officers) and P.L. 114-113 (compensation for wrongful incarceration).

See Instructions for Form 1099-MISC

The Internal Revenue Service and its Security Summit partners issued a warning to taxpayers and tax professions of fake IRS tax bills related to the Affordable Care Act.

The warning states that the IRS has received numerous reports of scammers sending a fraudulent version of a notice- labeled CP2000 – for tax year 2015. The issue has been reported to the Treasury Inspector General for Tax Administration for investigation.

According to the IRS, this scam may arrive by email, as an attachment, or by mail. It has many signs of being a fake:

• The CP2000 notices appear to be issued from an Austin, Texas, address;
• The letter says the issue is related to the Affordable Care Act  and requests information regarding 2014 coverage;
• The payment voucher lists the letter number as 105C;
• Requests checks made out to I.R.S. and sent to the “Austin Processing Center” at a post office box.

 An authentic CP2000 notice is used when income reported from third-party sources such as an employer does not match the income reported on the tax return. Unlike the fake, it provides extensive instructions to taxpayers about what to do if they agree or disagree that additional tax is owed. A real notice requests that checks be made out to “United States Treasury.”

For more information, please contact our office or read the announcement on the IRS website.

Press release from the Michigan Department of Treasury

In an effort to combat potential income tax fraud The Michigan Department of Treasury is cautioning taxpayers of fraudulent phone calls being made demanding taxpayers pay an immediate amount of money or face actions from the department. Calls are being received from a legitimate Grand Rapids-area Treasury phone number, which has apparently been cloned by the scammers. Victims are told they owe money to the Department of Treasury and if not paid promptly through a pre-loaded debit card or wire transfer the caller will face arrest, legal action or suspension of business.

Please be advised The Department of Treasury will not:

• Demand immediate payment without first mailing you a letter
• Require you to pay your taxes a certain way (for instance require you pay over the phone with a prepaid debit card)
• Threaten to call the police or other law enforcement agencies to arrest you for not paying
• Ask for a PIN, passwords, access codes to your bank accounts, or credit or debit card numbers over the phone.

If you receive a phone call from someone claiming to be from the Michigan Department of Treasury, but you suspect he/she is not a Treasury employee…

• If you don’t owe taxes, or have no reason to think that you do, do not give out any information. Hang up immediately.
• If you believe you may owe taxes or that the Department of Treasury may need to legitimately contact you, please record the employee’s names, call back number and caller ID  available then call the Department of Treasury at (517) 636-5265 to determine if the caller is a Treasury employee with a legitimate need to contact you.

Please use caution and NEVER provide personal information unless you are sure the situation is legitimate.

For Brickley DeLong, fall marks our season of campus recruiting. Every year we partner with local colleges and attend their accounting recruiting nights, looking for full-time staff accountants and interns. This is a very fun and exciting time of year as we look forward to meeting so many qualified accounting prospects. As a student, these nights can be very stressful and you attempt to woo the different recruiters. I would like to offer a few tips for a student to stand out at these events.

Dress professionally

Public accounting is a professional field; therefore, a suit is ideal. Make sure your clothes are wrinkle-free. Males – consider adding a vest or a stand-out tie to your attire. You may be surprised on how this can help a recruiter remember you. Women – do not wear gaudy jewelry or too much makeup. Dress modest; but, try to stand out. Many wear black suits at accounting recruiting nights; consider wearing grey, tan or navy.

Develop your pitch

There is nothing more frustrating as a recruiter than when a prospect comes to talk to you and is unprepared. Come ready and practice beforehand. I cannot stress this enough. This illustrates confidence. State who you are, what you are looking for, and what makes you qualified. Remember, this is a critical time where you are truly “selling yourself” to a Firm.

Do your research

When I ask you, “Do you know anything about our Firm?” or “What appeals to you about our Firm?”, you should have an answer. Before attending the fair, find the companies that you are interested in, and Google them. Visit their website, social media pages, or find an article about the firm. Then, take notes. Use this information when talking to the recruiter. For example, “what interested me about your firm is your active involvement in the community, such as…” This proves your interest in our Firm. Remember, culture is extremely important. A person can get a glimpse of a company’s culture through visiting the company’s sites.

Say thank you

Sending a “thank you” to a recruiter shows you are appreciative that we recruiters attended, and that we took the time to learn about you and discuss opportunities. There is debate on whether one should send a handwritten thank you, or an e-mail. Personally, I would prefer an e-mail. Because recruiters meet so many people, they are likely to get together right after the fair and choose their top picks. By the time you send a letter, a decision could have already been made. Send e-mails that night. And, bring up something that the two of you discussed so that he or she remembers who you are.

These are just a few tips to help you excel at career fairs. For more information on recruiting at Brickley DeLong, please contact jkloosterhouse@brickleydelong.com or visit our accounting career pages.

Author: Jennifer Kloosterhouse

In Rev. Proc. 2016-47, the IRS announced that a taxpayer who fails to meet the requirement to roll over distributions from retirement accounts within the normal 60-day period can make a written self-certification to an IRA trustee or plan administrator that a contribution meets one of the 11 specific reasons listed in the revenue procedure for excusing the missed 60-day deadline.

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Back to School.

Like many parents, you may be anticipating this time of year. After weeks of summer vacation, it is time to get back to a routine. You cannot wait for scheduled bedtimes and less “I’m bored” pleas.

However, for others, back to school means back to work, tuition payments, or expensive school supplies.

Whether you are excited or not, Back to School time is here. The CPA Practice Advisor discusses that now is the time to starting thinking about back to school tax breaks and deductions available for qualifying expenses.

The article offers 11 Back to School tax tips for parents.

• Private school tuition and school uniforms are not deductible.
• Before and after school childcare, for a child under 13, may qualify for a tax credit.
• Tax deductions for school fundraisers are limited to the amount over market value of the goods or services received.
• Moving expenses to go to college are not deductible.
• Earnings in 529 plans are not federally taxable. The money grows tax free and withdrawals used for eligible college expenses are not taxable.
• Tax-deferred accounts can be used to pay for educational expenses (e.g. Coverdell Educational Savings Accounts).
• Student loan interest is deductible above the line.
• American Opportunity Credit (AOC) can amount to $2,500 in tax credits per eligible student and is available for the first four years of post-secondary education.
• Lifetime Learning Credit provides up to $2,000 credit per year for qualified education expenses for a student enrolled in an eligible educational institution. As of now, there is not limit to the amount of years this may be claimed.

• A Roth IRA can be used for student’s income earned. Up to $5,5000 of income earned can be contributed to a Roth IRA, which grows tax-free.  

To read the full article, click here. For more information back to school tax breaks, please contact Brian McFarren.

Learn about our individual tax services

It can sometimes be difficult to know whether a particular worker should be classified as an independent contractor or an employee for tax purposes, yet this can be a costly issue for both you and them.

 Is your worker an employee?

Although there is no set definition of the term “employee,” the IRS has common-law rules regarding the matter.  A worker is generally considered an employee if the company has the right to control and direct them regarding the job they must do and how they must do it.  It’s also typical for an employee to be provided tools by their employer.

If your worker is an employee, the company must:

• Withhold income and payroll taxes from the employee’s paycheck,
• Pay the employer’s share of FICA taxes and Federal Unemployment Tax (FUTA),
• Provide the employee with any fringe benefits it provides to other employees, and
• Issue the employee a W-2 at the end of the year.

Is your worker an independent contractor?

According to the IRS, a worker is an independent contractor if the “payer has the right to control or direct only the result of the work and not what will be done and how it will be done”. .  It can be very expensive for a person to be classified as an independent contractor, as payroll taxes generally total 15.3% of gross income plus any other expenses, such as purchasing health insurance on the open market.

If your worker is an independent contractor, the company must:

• Issue the contractor a 1099-MISC at year end.

Misclassification

There are some protections in place for companies that misclassify workers who would normally be considered employees and instead treat them as independent contractors, but these protections from employer tax liabilities are only applicable if you have a “reasonable basis” for not treating these workers as employees, if all similarly situated workers are also treated as independent contractors, and if all federal returns are consistent with this treatment.