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Why Accounting?

by Kathleen A. Friedhoff

Hello. Thank you for taking time to get to know Kinetic Financial. I hope to soon have the opportunity to get to know you, also.

You know when I was preparing this website, I was thinking about what to present to the World Wide Web and I thought, how can I talk about tax accounting in a way that won’t make everyone want to go back to bed? Well, the answer to that is…I can’t. It’s boring. It’s boring at any time of day whether it be 7 in the morning or 7 at night.

But I thought to myself…if I was one of you out there in the audience, waiting for someone to talk to me about tax law, I would be readying myself for a good zone out. So, in consideration of that, I’ve decided not to talk about tax accounting. Well, you may be asking yourself, what are you going to talk about?

You may ask yourself why anyone would want to be a tax accountant. For that matter, why would anyone want to be an accountant? Isn’t it just counting beans, and recording items in a ledger? Isn’t that boring? And then to make it even more boring, you’re going to tax the bloody beans! And then record that in another bloody ledger!

But you see, what most people don’t realize is….the fun’s not in the counting and making all the numbers come out right. The fun is in the beans! The fun’s in the story behind the beans. Where did the beans come from? Are there different kinds of beans? Do the beans realize they’re being counted? Are they sensioned beans??? (Any Star Trek fans out there will get that one: sensioned beans.)

But truly, the beans are the fun of it. Now let’s say you have a little family of beans.  A mommy and a daddy bean that have three offspring beans (aka bean sprouts) at home.  And Momma Bean’s elderly mother , Grandma Bean, lives with them also because she’s widowed and needs help to get around. Daddy Bean has a comfortable union job in a curd factory making a moderate salary and puts some of his salary into a 401k every paycheck and into a matched IRA account. Momma Bean stays at home, but as the children are growing she has begun a bean-beading jewelry business that she runs out of her house.

When Grandma Bean moved in with her daughter’s family, they decided it would be best if they built an addition on the second floor of their house to make room for her. Now, Granny Bean is handicapped and is constrained to a wheelchair, so the Bean Family has to install an elevator to help Granny get up and down to the second floor. Now Granny Bean doesn’t have any earnings except what she collects from Social Security and from her deceased husband’s retirement pension. Most of what she collects is used to pay for medical expenses. She relies on her daughter’s family for her general needs like food and clothing.

The Bean children range in ages. Little Kidney Bean is 13 yrs old and goes to an afterschool program so that Mommy and Daddy Bean can continue to work late in the day. The middle child Navy Bean is 19 years old and is a full-time student. She lives at home and receives more than half of her support from her parents. She does work at a farm during the summers, but her remaining support comes from a trust set up by her deceased grandfather. She also has a student loan that she pays interest on. The third child, Pinto Bean, is Daddy Bean’s deceased brother’s son who the Bean Family is presently trying to adopt – he is 10 years old. Pinto’s mother was divorced from his father back in May of last year and although she wasn’t the custodial parent of Pinto, she did pay child support to her ex. She continues to pay support to the Bean family to help pay for Pinto’s support.

Momma Bean’s bean-beading business is profitable. Very profitable.  She uses the basement of their house as an assembly room and office to coordinate production of her jewelry and to coordinate the delivery and shipping to customers. Momma Bean sells her jewelry to several charities to help them with their fundraising, and she also sells to stores overseas through the Internet.  She also ships her jewelry to all fifty states and has 3-employees. One of the employees is Mrs. Garbanzo. Mrs. Garbanzo is from the foreign country of Beanyville and is here working as a non-resident alien. She also is paid by Momma Bean to do some light housekeeping and babysitting. Since Mrs. Garbanzo has nowhere to live while working in the States, the Bean family have rented out their carriage house to her that has a small loft for her to stay.

As you can tell by now, the Beans are a very busy bunch of beans. They have a lot going on in their lives. But they are not unlike many of my clients at Kinetic Financial. Their personal and business worlds have many facets that affect their tax world. In this little scenario, there are probably over 100 questions I could ask the Beans about their lives that could have a meaningful effect on whether they pay taxes this year or owe.

As a viewer of my website, I would hope that you can see that my clients are ordinary people, or beans as the case may be, but living extraordinary lives. Some work, some don’t. Some earn money, some just collect it. Some people make a living, others create a living with a business. Some spend money to live, others spend money to grow. Some pay sales tax, some pay employment tax. Some say tomatoe, some say tomato.

But realize, I didn’t say anything about deductions, dependents, exemptions, depreciation, tax credits, adjustments to income, alternate minimum tax, or any other taxy words. I talked about beans. Now as Bogart said in Casablanca,” I’m no good at being noble, but it doesn’t take much to see that the problems of a bunch of little beans doesn’t amount to a hill of deductions in this crazy world” but, I sure would like the opportunity to try.