Purrfect Pitch Accounting

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  • Understanding Your Estimated Payment Schedule

    Estimated payments are due four times a year, which many clients find to be three more times than necessary. They exist because the Revenue Service prefers to be paid as you earn, in the way a cat prefers to be fed as it looks hungry.

    Gerald’s rule of thumb: pay 25 percent of last year’s liability each quarter, mark the dates on a calendar, and place the calendar somewhere you cannot sleep on it. The most common error we see is a calendar that has been sat upon continuously since March.

    • 15 April, the first payment
    • 15 June, the second payment
    • 15 September, the third payment
    • 15 January, the last one and the one you forgot

  • Case Study: Mrs. Biscuit and the Kibble Reserve

    Mrs. Biscuit, a ginger shorthair of fourteen, came to us with 31 pounds of kibble hidden in a laundry basket, four wardrobes and one boot. She was concerned it would be taxed as hoarded inventory.

    Our analysis found that the stockpile was a contingency reserve, a recognised accounting concept, provided it is disclosed. We recorded the kibble at cost of $1.12 per pound, set up a reserve account of $34.72 and gave the boot its own sub ledger.

    Mrs. Biscuit is now fully compliant. She has asked us not to mention that she ate the entire boot reserve in September. We have recorded it as a loss on discontinued operations.

  • Notice: Revised Hours During Audit Season

    From 1 August our offices will be open Monday to Thursday, 9 to 5. Friday has been reclassified as Reserve Day and will be used for catching up, not catching up, or lying on the keyboard of whoever is catching up.

    The daily audit nap, 2 to 4, remains compulsory. During this window no calls will be taken, no refunds will be issued and no documents will be stamped, as the stamp is currently being used as a pillow by Dumpling.

    Walk in clients are welcome at any time. Walk in clients without an appointment will be seen after clients with an appointment, who will be seen after Gerald finishes looking out of the window.

  • Mailbag: Can I Expense a Box I Did Not Buy?

    A reader signing off as Concerned in Carpet writes: a large cardboard box arrived at the house containing a blender. I discarded the blender and kept the box. May I deduct the box?

    You may not deduct something you did not buy, Concerned. However, you may recognise it as a gift in kind, valued at fair market price. A used appliance box of this size is worth around $4.00 in cat markets, which is more than the blender was ever going to be worth to you.

    Note the receipt of the box as income, then claim occupancy of the box as a business expense. The two cancel. Your net position is a box, which is where you wanted to be.

  • The Sunbeam as a Home Office: A Qualified Opinion

    Several clients have asked whether the warm patch of floor by the south window can be claimed as a dedicated home office. The tests are exclusive use, regular use, and principal place of business.

    The patch passes the first two comfortably, since you occupy it from 11:40 to 2:15 every day and no other cat is permitted. The third test is where it falls down. A principal place of business must involve some business, and a nap, however committed, has not historically generated revenue.

    We therefore offer a qualified opinion. You may deduct up to 8 square feet at $1.50 per foot if you can show that you reviewed a document there. A bird going past counts as a document if you wrote it down.

  • Meet the Partners: Gerald Mittens, CPA

    Gerald Mittens is a grey cat of eleven years and a certified public accountant of nine. He holds a degree in Applied Ledger Studies and a small, stubborn bald patch above the left ear from a tax season he calls the Winter of Receipts.

    Gerald prepares roughly 340 returns a year. He has never missed a deadline, though he has twice been late to one because a sunbeam moved across the filing cabinet and he felt it would be rude to leave.

    His specialty is the complicated household: multiple cats, one human, three litter trays and no agreed cost sharing arrangement. He describes this as the most rewarding work in the profession. He says it without moving his face.

  • Why Surprise Tuna Is Not a Line Item

    Clients regularly bring us a ledger in which the largest category is Miscellaneous. When we open it, Miscellaneous contains a single entry: surprise tuna, $212.40, eleven transactions, all after midnight.

    Surprise is a feeling, not an account. A budget needs categories that survive an audit, so we recommend filing the purchase under Protein, Emergency, or under Morale, Operational. Either will be accepted by any reasonable examiner who has also been awake at midnight.

    If the tuna was genuinely a surprise to you, we would like to know who else has access to the cupboard. That is a controls problem, and controls are what we are for.

  • Second Quarter Results: Vases Down 100 Percent

    The second quarter has closed and the books are balanced, in the sense that both sides now contain numbers. Revenue rose 4.2 percent. Operating costs rose 11 percent, driven almost entirely by the loss of what the inventory register called Decorative Vase, Blue, Ref. 7.

    The vase was written off at its full carrying value of $38.00 after a witness account placed it on the edge of a sideboard at 3:14 on a Thursday afternoon. The witness, a tabby named Pickle, declined to comment and then left the room at a measured pace.

    We have reclassified the loss as a voluntary disposal. The distinction matters at filing time, and Pickle has agreed, by silence, to the wording.