1040 Follies

As January winds down, I, like many of you I’m sure, have been slowly receiving assorted tax documents in preparation for my annual sit-down with Rocco – my accountant for the last 27 years.

Rocco usually manages to find my wife and me a small refund, provided my deductions are within the parameters of reality. In the 12 years I spent covering the accounting profession, each January I would compile what I considered an entertaining list of outrageous attempts for tax deductions that most filers wouldn’t be within three area codes of considering.

And somehow every year, some not only stretched the boundaries of credulity but were so out there I’m guessing both the filers and their accountants were sharing large quantities of prescription pharmaceuticals as they prepared their 1040s.

So without further ado here’s my abbreviated roster of what I view as the most outrageous deduction attempts of the past year.

Don’t bank on it!

I don’t often veer into writing about other industries, especially those where my knowledge is largely superficial. But I came across a fascinating slideshow from Forbes magazine, which ranked the 100 best and worst banks in the U.S.

The survey was based on a total of 10 metrics including growth, profitability, capital adequacy and asset quality among others. Now anyone who follows the banking sector closely knows that the frequency of M&A in that vertical either rivals or, often surpasses that of the accounting profession.

But first, a bit of personal history with banks and M&A.

What Business Are You In?

Over the weekend I took in a showing of “The Founder,” the story of how Ray Kroc, a former Chicago-area salesman peddling milkshake mixing machines, discovered the McDonald brothers’ state of the art fast food restaurant in California and convinced them to take him on as a franchising partner.

The rest, as they often say, is history. By the time of his death in 1984, Kroc had spearheaded a global empire that included 7,500 restaurants in 31 countries and generated sales of more than $8 billion.

But the scene in the movie that most captured my attention is when early on, Kroc opens his books to a CFO and bemoans that his constricted franchising contract with the McDonald brothers is actually losing him money despite opening 15 or so new restaurants.

The CFO bluntly tells Kroc he’s focusing on the wrong thing. “You’re not in the burger business Ray you’re actually in the real estate business.”  The CFO then devises a strategy whereupon Kroc would purchase the site plots outright and in turn lease them back to the franchisees, thereby guaranteeing him a steady income stream that could be repurposed to develop new units.

So that got me to thinking. No, not to become a McDonald’s franchisee – that requires about $2 million more in liquid capital than I currently have. But rather asking the question - how many of your know what business you’re really in?

2017: Resolutions or Resignations?

The other day at my health club, they were offering each member a complimentary body fat test via a new state-of-the-art contraption they had just purchased.

After mulling it over I declined. The tandem of holiday eating and my mother-in-law baking endless trays of fried dough cookies, would, in my estimation, put my fat-to-muscle percentage at or near the current Dow Jones Industrial Average.

So as you can imagine, one of my resolutions for 2017 is to forge an intimate relationship with a treadmill.

But as most of you know, now that the holidays are over, it signals that filing season is around the corner – figuratively and literally.

So in the space of say, four to five weeks, it probably is as good a time as any to step back and evaluate your practice in terms of what needs to be done, once the piles of 1040s begin winding down.

Meet the New Bosses

Recently I came across a recorded case study of a pediatric dentist who had recently opened her own office.

While business initially was above average, she was convinced it could be far better considering her location was in an area mostly comprised of young adults, may of whom had young children.

So she consulted with a marketing expert to determine why. In about one minute, the consultant discovered what was wrong. Her office looked like every other dentist’s office, meaning those designed specifically for adults. Every furnishing or picture was above the eye level of a child and on top of that was adult-centric in nature and design. There was nothing to entice a youngster’s interest in an event that most dread to begin with.

An all-too-common example of “that’s the way we’ve always done it.”

New Year, Same Menu

Welcome back.

I would have returned to this space a bit earlier but for the past week I have been fulfilling that always joy-filled civic obligation better known as jury duty.

But I hope everyone had a happy and healthy holiday season and here’s wishing the best for 2017. I’ll let you know how I’m doing once the credit card bills come due. My first inkling that I may have to get a part-time job was when the postman delivered the initial batch with a hand truck.

Now that my stint as a juror is over, I can concentrate on matters that affect the accounting landscape.

The pending changes coming along the Beltway – particularly concerning the Tax Code and the ACA, would, in my estimation, comprise the next three blogs so it’s probably best to sit back and see what unfolds.

Because we all know that whatever a politician promises if elected will more than likely happen during his or her administration.

Right?

Political sarcasm aside, today’s missive is directed not toward the workings of the Oval Office, but rather to the upcoming conference season.

More like a plea from a long-time attendee.