“A threat and an opportunity!” is how most firms in Practical Accountant’s upcoming survey of regional firms termed this recession. An opportunity because clients will need them more than ever, and a threat for obvious reasons.
Within most Ts hides an O. From BusinessWeek, for instance, comes the tip that one of the first stops for the newly unemployed should be an accountant. “Knowing what to write off as business expenses can save enough on your tax bill to make hiring an accountant worth it,” says a source in the story, from the Freelancers Union.
Talk about a growing niche! The Labor Department reported late last week that first-time requests for unemployment insurance rose to 654,000, from the previous week's “upwardly revised” 645,000. The number of people receiving benefits for more than a week increased by 193,000, to 5.3 million, the most on record going back to 1967. Not to be outdone in sanguinity, the Federal Reserve reported that the net worth of American households fell, in the fourth quarter of 2008, by the largest amount in more than a half-century of record keeping.
Most of the unemployed also reportedly don’t realize that their benefits are going to be taxed just like income: Unemployment taxes netted $7.2 billion for the federal government in fiscal 2008 and $32.4 billion for state governments, according to the Department of Labor. AICPA vice president for tax Tom Ochsenschlager calls these taxes “a silly rule,” the impact of which on the jobless intensifies during a recession. I’ve never been an accountant but I have been unemployed, and I agree. We’re looking at almost 6 million people who could get plowed down on the road to recovery.
First thing you can tell your new, unemployed clients is that all threats are opportunities. “It probably makes sense to consider the possibility that there might be a satisfying part- or full-time alternative career waiting around the bend,” says Ken Dychtwald, a Huffington Post blogger, psychologist, gerontologist, and author of 16 books on aging, life transitions and retirement-related issues. “Layoffs, career roadblocks, and delayed retirements can offer time to reassess your position and explore that option you thought you never had time for.”
That option exists for all of us right now, whether we have time or not. CPA Thom Hepford, for example, of the Lawrence, Kan., office of Mize, Houser and Co., is running for his local school board, and he hopes to bring a CPA’s eye and talents to bear on how his local school district spends money. One of his first causes is saving funds for crossing guards. “That’s something we’re going to need to find a way to make happen one way or another,” he told his local paper. Nor does he think a curriculum ends with math, science and the ABCs. It must also include art, music and “some of the other courses that teach you how to be a human being.” Hepford sounds like a CPA who knows a T and an O when he sees them.
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