Left Brain Matters: Telling the Tax Story

By Eve Loren Munsky

When I contemplated the topic “new beginnings,” I thought perhaps writers are some of the few people who can actually talk about them without being redundant. 

A writer can start a story knowing where the characters are going to wind up, determine the conflicts they will go through but rework the beginning for a better lead in. 

Sometimes I look at taxes similarly. At the end of the year, you have a pretty good idea of how the year shook out, often just by judging the client’s mood when they come to drop off their stuff at the office. This can range from the “I had a great year-please let me keep some” jitters to the hang-dog bad year blues. Our goal is to comprehend the year and let the tax return tell its story. If it’s a bad year because its building toward something, that can be reflected. If it's been a great year, but the income from it was produced over a number of prior years, that needs to be reflected too. After asking about the coming refund, the number two question on everyone’s lips, is “what can I do next year to be better at this next year?” It’s customary in January, especially with everyone making New Year’s resolutions to hear people discussing their plans to “get better organized,” “start really keeping track.”

The good thing about left brain activities is they make sense.  Some days readers may love your column, and the next week you think you’ve given them something they’ll like even better and no one bothers with it. But, one week's assets minus liabilities is your net worth, and it’s the same every week.  The multiplication tables don’t change. That’s why I can’t understand why people don’t love their left brains more. They provide life’s consistencies.

The question remains, how can a right-brained person make life easier for themselves and the left brain person responsible for recording their financial activities.  The answer, in today’s mouse-driven world, is pretty much the same as the answer to almost every other question  - “use the internet.”

My first bit of advice for everyone forming a business is stop using cash. Your checkbook is your first line of defense. No matter how fastidious you are about saving receipts for cash purchases, one is bound to get shoved into your jeans pocket and go through the wash. You are going to return the CD you bought along with the toner cartridge at BestBuy and when the clerk staples the two receipts together, the business purchase on the bottom one is probably going to be forgotten.

If you pay by check you have a second chance because even if you lose the receipt, there will be a cancelled check in with your bank statement. Those, for some reason, even in the most disorganized of homes, are somehow retained or at worse, can be re-ordered from the bank.  If you pay business expenses using a charge card, you have three layers of defense – the original receipt, the credit card statement, and the cancelled check you used to pay your charge balance.  Of course, charge card statements can be re-ordered from the bank if one is misplaced. 

Eve Loren Munsky is a CPA in private practice in Stony Brook, New York. She is a graduate of Hofstra University with a degree in marketing. Though her career began in advertising, having children changed her ability to survive in that turbulent world. An unfortunate layoff during one of her pregnancies forced her into a job at everyone’s favorite branch of government, the Internal Revenue Service – the very branch she still insists is the most reasonable and gracious to work with. After a short but very successful stint at checking other people’s tax return preparations, she stopped being in denial of her accounting abilities and jumped the fence, working for a CPA firm. In between PTA meetings and little league games, she attended various schools on Long Island and patched together an accounting degree, sat for the CPA exam, raised two kids and took over the practice she worked for.

For the past 15 years, she has provided accounting services and business advice to a variety of small to medium sized businesses and prepared personal and business income tax returns. She has been very successful at helping new business owners get their ventures off the ground. Part cheerleader, part therapist, her clients tend to find her advice sensible and reasonable both from a business and human standpoint. She takes a wholistic approach to accounting and considers herself a provider of accounting for human consumption.