The Chicago Kid

Big4 Beginner

2008-08-19T21:01:00.003-05:00

Well according to the date on this post, it's been almost a month since I've posted. I wish I had an excuse for not posting, but I really don't. I've thought of things that would've been cool to write about, but just never got around to doing it. So now is the time.

I started my career at a Big4 firm last week. For any of you wondering, the first week is filled with administrative tasks and self study exercises. I had interned at this company for the last two summers so I was pretty aware of what to expect. All in all, it was a decent first week and entirely exhausting. It's always nice getting taken out to lunch by your your superiors. After sleeping in until noon everyday before starting work, waking up at 5:45 every morning was a definite change of pace, but we all adjust. I tried to settle into my cubicle realizing that many hours will be spent in it over the next few years. Overall, I was content to begin earning my first paycheck as a tax professional.

Since I don't have anything specific to write about in this post, I figure I'll just write about things that I'm working on.

1. Bonus Depreciation

From the taxalmanac:

In March 2002, the Job Creation and Worker Assistance Act (“JCWAA”)(P.L. 107-147) was signed into law. The foundation of this new legislation was the allowance of “bonus” depreciation (IRC Sec. 168(k)). The new “bonus” depreciation provisions provide a special depreciation allowance for qualified properties placed in service after September 10, 2001 and before January 1, 2005. These provisions allow 30% of the asset's cost to be immediately deducted in the initial year the property is placed in service.

Qualified property which is eligible for “bonus” depreciation must have a recovery period of 20 years or less and can not be considered IRC Sec. 197 computer software.

In May 2003, the Jobs and Growth Tax Relief Reconciliation Act (“JGTRRA”)(P.L. 108-27) was enacted. This act modified the “bonus” depreciation provisions contained in the JCWAA by increasing the deduction from 30% to 50% of the assets cost for property acquired and placed into service after May 5, 2003, and before January 1,2005. This modified provision can be applied to all property, which qualifies for the 30% “bonus” depreciation deduction.

State conformity to the federal “bonus” depreciation provisions provided by the JCWAA and JGTRRA is a major concern for taxpayers, as many states have decoupled in whole or part from these federal tax acts.

For state tax purposes, many states "decoupled" from the Federal bonus depreciation. Essentially, they said "you ain't taken all that extra depreciation at the beginning on your state tax return son". Since the total depreciation will be equal when the asset reaches the end of its useful life, the only issue is a timing difference. The amount of depreciation taken on the Federal return and on the State return are different. Since most state tax returns begin with Federal Taxable Income as the starting point, we have to make additions or subtractions to arrive at State Taxable Income. In the early years, when federal depreciation is greater than state depreciation (Increase Depreciation-->Reduce FTI), we have to make additions to Fed Tax Income to arrive at State Taxable Income. Since in the end depreciation must be equal under both methods, we have to take less depreciation on the Federal return in later years (Decrease Depreciation-->Increase FTI). Since depreciation will now be greater on the State return, we make a subtraction from Federal Taxable Income to arrive at State Taxable Income.

Easy as pie.

Keys to CPA Exam Success: Intro

2008-07-16T23:10:00.005-05:00

I recently finished the CPA exam so I am slowly breaking away from my routine of reading CPA help forums, support forums, and score release information. I decided to post a few of the resources I used while studying, crying, testing, and waiting for my exam results.

For anyone interested, NASBA and the AICPA have posted the Uniform CPA Examination Passing Rates for Q1 and Q2 of 2008.

Section	First Quarter	Second Quarter	Cumulative
AUD	44.66%	53.09%	49.26%
BEC	46.94%	47.60%	47.29%
FAR	45.95%	49.59%	47.87%
REG	45.66%	48.57%	47.22%

Here is a link to the official score release.

To stay up to date on upcoming changes to the exam, be sure to check out the cpa-exam.org newsletter and exposure draft regarding the exam. The cpa-exam.org website allows candidates to practice a short sample exam (5 Q's and a short simulation) to become familiar with the testing software. It is imperative that candidates be familiar with the testing environment before showing up to the exam site.

Despite the fact that the CPA exam only became computerized in 2004, the software that candidates use to take the exam is clunky and awkward. The exam utilizes an "excel like" spreadsheet program with plenty of awkwardness to render it virtually unusable during the exam. Additionally, the simple "Microsoft style" calculator lacks the power necessary to be very helpful for candidates. Having said all that, I reiterate that candidates need to be able to utilize the tools (albeit crappy ones) that they are given to work with. So be sure to check out the site.

If you are looking for a support group of other candidates struggling through the exam, check out the "Pass the CPA Exam" group over at 43things.com. The group there is filled with domestic and international students, mothers, and fathers trying to pass the CPA exam. The group is very supportive and helpful to those looking for advice and encouragement.

If you are seeking more information or advice on specific sections of the exam, I suggest you check out the forums at cpanet.com. The site is filled with information for potential candidates or candidates already taking the exam.

I feel like I have a lot to say about this subject, so I'll probably follow this post up with some more opinions/advice on taking and passing the CPA exam. I'll try to address some of the shortcomings of exam software, study tips to achieve success, study packages available to students, and traps to watch out for when taking the exam.

Framing 101

2008-07-15T13:30:00.006-05:00

As I usually do when I get bored, I decided to create another project for my fiancée Kate and I to work on (much to her dismay). I recently received my diploma and CPA certificate in the mail and thought it would be cool to frame them.

She and I worked on an Illini collage type project a few years ago. It was a collection of Illini men's basketball season tickets, Final Four tickets, and articles from the 2004-2005 basketball season. I had the pleasure of attending the Final Four games in St. Louis (a perq of having season tickets that year) and thought it would be cool to frame it all. We purchased a big silver frame for about $30, some blue foam board, and some orange construction paper. After 1 solid week of work we finished the collage. It turned out pretty well considering that we cut everything by hand with scissors or a razor blade. Many of the lines weren't straight and edges were rough, but we worked hard on it and were proud of the result (I'll post a picture soon.) After seeing our hard work and future potential, her mom bought her a real mat cutting set. Kate used her matting set to frame some photos for other family members and I thought it would cool to give it a go making a diploma frame.

We went shopping at Hobby Lobby and purchased 2 sleek black diploma sized frames (~16.5" X 13.5") for $13.99 each. I also purchased a larger sleek black frame (16" X 20") for $17.99 to match the smaller frames. We also purchased 4 large pieces of black mat board in case we made any mistakes in cutting. Using the mat cutter, we first cut out two large squares of mat board the size of the frame. We took the first square of mat board and penciled in borders of 1&3/8" for the sides and 1&1/8" for the top and bottom. We used the mat cutter and cut out the center square. Next, we took the second square of mat board and penciled in borders of 1&5/8" for the sides and 1&3/8" for the top and bottom (to create wider edges and a smaller square in the middle). We again used the mat cutter to cut of the center square. Both pieces cut well and turned out nice. We laid the first mat board down into the frame, then we laid the second one on top, centered the diploma, and added on the back. I was hesitant to add tape on the corners of the diploma to hold it in place. The back seems to hold everything tight enough so that the tape isn't necessary.

We only finished one of the frames so far, but I think that it turned out really great. I bought the larger frame to frame my undergraduate diploma with a nice picture of the campus framed above it. We anticipate it will be more difficult cutting 2 squares on 1 larger piece of mat board. I'm looking forward to working on this project some more. Hopefully in a few years I'll have an office and somewhere to hang them. For now, I'll just look at them in my room with a sense of framing accomplishment.

Given the price of custom framing these days, working on this project was fun and much more inexpensive than purchasing a custom frame. A custom frame similar to the one we created would cost about $80-$100. Our cost in creating the frame was about $16.

Class: Accounting 201

2008-07-15T12:00:00.005-05:00

As a recent graduate of the University of Illinois at Urbana-Champaign, and more specifically the accounting program, I'm always intrigued when I see information about my University. I came across the video clip below on a university sponsored Illinois student blogger site. The professor below was one of the zaniest professors I had during undergrad. While some people thought she was a little over the edge (and I somewhat agree), I believe that she was a good teacher. Her exams were rather difficult, but I think she did fairly well instilling the accounting basics necessary in an introductory undergraduate accounting course. Do you remember your best/craziest high school teacher or college professor?

Each semester before classes would begin in college, I always looked up my potential professors on ratemyprofessors.com. I never dropped any courses because of what I found, but I definitely used the information there to gauge what I was getting myself into. Hearing what it takes from past students to excel in a class is a big help when making decisions on what and how to study. I would recommend checking it out if you've never seen it before. Remembering that each class is not created equal and tailoring an individual study plan for each course worked for me. How did you make it through college? Did you prefer study groups, the library, or binge drinking?

And now for teacher ratings for grades K-12, RateMyTeachers.com.

Irish American Heritage Festival

2008-07-11T17:16:00.005-05:00

If you're looking for something fun to do in the city this weekend, check out the Irish American Heritage Festival in the North Park Neighborhood.

23rd Annual Irish American Heritage Festival

When:: July 11 : 6 p.m. - 12 a.m.
July 12 : 12 p.m. - 12 a.m.
July 13 : 12 p.m. - 11 a.m.

Price:: $7-$12; free for kids 12 and under when accompanied by a paid adult. Tickets: irishfestchicago.com

Event Phone Number:: 773-282-7035 ext. 10

Irish American Heritage Center

Neighborhood: North Park

4626 N. Knox Ave.

Chicago, IL 60630

773-282-7035

Indoor-outdoor festival features live Irish and American music on five stages, folk dancing, instrument demonstrations, food, contests, arts and crafts vendors, kids' activities, a raffle for a trip to Ireland and more.

Performance schedule

• Friday

Main Stage
7 p.m.: Donofinn
9 p.m.: The Tossers

Raffle Stage
6:30 p.m. McNulty Irish Dancers
8:30 p.m.: Mashed potato eating contest

Fifth Province Stage
6 p.m.: Joe McShane and the Silver Bridge Band
8:15 p.m.: Finbarr Fagan's Band
10:15 p.m.: The Muck Brothers

Auditorium Stage
6 p.m.: Seanachai Theatre Company
7:15 p.m.: Mulhern School of Irish Dance

Folk Tent
7 p.m.: McDonagh Girls
9 p.m.: The Next Generation

McGinty Room
7 p.m.: Ceili Dance

Source: Metromix.com
Image Source: Flickr.com

$199.99, No Wait, Only $4.99 For You!

2008-07-11T12:46:00.005-05:00

Let me start off by saying that I'm a big fan of infomercials. I've been a big fan since I started watching RonCo commercials for the "Set-It-And-Forget-It" Rotisserie BBQ. I find them wildly entertaining with their repetitive sales pitches, "professional" opinions, "real life" customers, never ending price cuts, and free 30 day trials. The thing is...I would never buy something from an infomercial. EVER. I'm a pretty skeptical person by nature and the people selling these products seem like actors in a low budget version of a play at your local theater. I can only assume that the actors they claim to be doctors never even took Biology 101.

One of the most recent infomercials I've been watching is called "Dual Action Cleanse". The product is sold by some slimy looking guy explaining how your body is full of toxins that can be removed with his product. The product is described as an herbal remedy with a laundry list of natural herbal medicines to cleanse and purify the body. Out of pure curiosity, I googled the product to see what negative harmful effects the product had on regular people. I landed on a terrific website called InfomercialScams.com. The site is filled with angry customers who ordered the product and were dissatisfied with the results. I honestly feel bad for the people on the website who believed that they were going to get a product that returned great results. I also question whether they know how to do a google search. I really thought it was common knowledge by now.

Aside from receiving a product that failed to deliver the intended results, the customers received a few other shocks as well. I looked up a number of these late night products (Dual Action Cleanse, Extenze, Sauna Belt & Ab Energizer) and customers across the board had similar complaints. First off, many of the products had terrible adverse side effects. Many buyers experienced nausea, bloating, and rashes with the herbal products. With the toner belts, people complained of terrible burns and blistering caused by the product. In addition to physical pain, the infomercial companies charged the hell out of these people.

Most infomercials these days come with the too-good-to-be-true free 7 day trial. The first sample shipment is sent to the consumer at little or no charge with the option to cancel within 30 days. The problem is, most of these shady companies are practically impossible to contact. They have little to no customer support, seemingly no records of any kind of what has been paid for/charged, and honestly they don't care. They are essentially scam artists preying on people who probably aren't the brightest bunch of people to begin with. In many cases, the customers attempted to contact the company (after adverse side effects) to cancel their recurring subscriptions (which they had no choice to opt out of). The company usually responded that the next order had already been shipped and the customer would have to mail back the product to receive a refund. In other cases, the companies responded that they had no record of the order or some other nonsense. Some customers were told that they had to email the company to cancel their subscriptions (usually being charged $50-100/month!). Most of the customers ended up just canceling their credit cards and disputing the charge with the credit card company.

It is unfortunate that companies like this are allowed to operate in this way. The world is full of people looking to make a quick buck. Most of them ever toeing that line of legality, but usually well past the line when it comes to ethical behavior. So for everyone out there, caveat emptor (that is, let the buyer beware). If you really want to try a product, I suggest you pay with cash or check and purchase it from a retailer. Your wallet might be $60 fatter this month if you do.

Appstore + Firmware 2.0 > Iphone 3G

2008-07-10T22:42:00.005-05:00

As many tech geeks already know, the new 3G iPhone comes out tomorrow. As an owner of the first generation iPhone, I have to admit that I'm a big fan of the phone. Over the past 11 months, I've had a great deal of fun and nervousness jailbreaking and unlocking my new shiny gadget. As a fan, I've been closely following the never ending rumors and posts dedicated to the iPhone v2 coverage. Much of the coverage on the major tech sites has been devoted to all the cool new applications that are now available. The thing is, most of these applications were already available months ago on jailbroken phones. To me, aside from the new speedier 3G network and enhanced GPS capabilities, I'm not all that impressed with the new 3G iPhone. The increased enterprise support, more polished delivery method of applications, and firmware 2.0 are much more exciting to me. Unfortunately, Apple has still not delivered on many of the features that users are still requesting (Flash support, copy and paste, video recording). Until these features are delivered, users will continue to jailbreak their phones. How many iPhones do you think Apple will sell this year? Will they reach their goal of 10 million by the end of 2008?

The Place You Call Home

2008-07-09T23:18:00.004-05:00

I've just recently begun looking for an apartment in downtown Chicago. I am starting work at the Big4 in August and would really like to live closer to work. The trade off between living at home and banking 98% of each paycheck and living in a cool area near friends, nightlife, and work is difficult. Living in the suburbs, I've always enjoyed catching the train downtown, hanging out, and catching the Metra back home. Recently, I've become addicted to looking up apartments on Craigslist. I really do find the site amazing. I search for my location, enter my parameters, and instantly check the box for posts with pictures only. I'd love to see statistics on housing posts viewed that have pictures compared to those that do not. I want to get a rough idea of the apartment before I take the time to make an appointment and see the place. Who can picture a place just by reading a description on there? Before I began my search I had heard of Chicago neighborhoods, but I never realized just how many there were. Craigslist posts are often tagged by neighborhood. The map below was a tremendous help in locating apartments. Rock on Chicago.

Weezy Lou

2008-07-09T22:11:00.012-05:00

I just finished watching the cubs beat the reds 5-1. After the game, Lou gave his normal confident press conference to the reporters. The strange thing is that Lou always seems to be out of breath when he speaks...even when he is just sitting there. Lou is talking to the announcers from the dugout out of breath. Lou is sitting giving his press conference out of breath. Lou is eating a cheeseburger out of breath. I sincerely hope that this man is in good health and m akes it with our cubbies until the end of the season. God speed Lou.

Wrigley Field Scoreboard Project

2008-07-08T17:26:00.005-05:00

I have been working on a Wrigley Field-esque scoreboard for a while now. I started it in the summer of 2007. It sat in my room at school for a year eagerly waiting to be finished. I am back home from school again with not much to do and decided I should probably finish it up. I finally painted the clock face, added the hands, and drilled all the holes for the flags (a great addition from my girlfriend). I am still working on the best way to allow the hands to be moved. I also have a full set of painted numbers that are still down at school. I wish they were here so I could take a picture of the (mostly) completed scoreboard. I'm wondering if anyone has any suggestions on ways it could be even better. I love working on do-it-yourself projects. They are very rewarding when you are done.