How to Keep Up WIth All Things Tax Related with Jeremias Ramos (Part 1)
In this two part episode Phil interviews Jeremias Ramos, a New York tax profesisonal that runs a successful CPA blog. Phil and Jeremias talk about how working at home is working out well for his firm while being curious what the New York real estate market is going to look like in the coming years. They finish off their conversation with some very clear tips on how to pass the CPA exam and what employers may be looking for.
Narrator [00:00:02] Hello and thank you for tuning in to another episode of CPA Review and more. We are pleased to bring you the number one podcast for CPAs and CPA candidates. If you'd like to learn more about how Yaeger CPA Review can help you, find us on our website at Yaeger, CPA Review dot com. Now, here's your host, Phil Yaeger.
Phil [00:00:27] Good evening, everyone. This is Phil Yaegur and welcome to my podcast, CPA Review and More. Well, we're going to talk some about CPA, especially the preparation of the exam and also the talk about other areas in taxes and also in any accounting that may come up. My guest tonight is Jeremias Ramos. Did I get that?
Jeremias [00:00:52] Yes, Jeremias.
Phil [00:00:52] Where are you from originally, Jeremias?
Jeremias [00:00:55] Originally from Orange County, New York.
Phil [00:00:57] So you were born--you're not--I mean, your family's from where, originally?
Jeremias [00:01:02] My family's from Brooklyn. So they were living in the city for most their lives. And then once me and my sister were born, they wanted to move upstate.
Phil [00:01:13] What school did you attend for your accounting degree?
Jeremias [00:01:18] For accounting degree? I attended Mount St. Mary's College, Newburgh, New York.
Phil [00:01:22] Mount St. Mary's, yeah, there is a Mount St. Mary's here in Maryland and Emmitsburg, Maryland, is that a related school?
Jeremias [00:01:31] I don't believe so. Is that the one that they have a pretty good basketball team or that.
Phil [00:01:36] Yes, they do.
Jeremias [00:01:37] Yeah.
Phil [00:01:37] I don't know about their accounting program, but they have a real good basketball team, you know. But yes, they do. That's correct, because I actually went there to interview for a job teaching. So and this town Emmetsburg, it's like, you can take two minutes to go through the town and that's the end. I didn't I didn't take that job. I wasn't offered it, but I didn't take it. But I saw that. And I said, gee, you went to Mount St. Mary's, but you realized it was more than one Mount St. Mary's. And you are from New York. And you were telling me you live in Great Neck, New York.
Jeremias [00:02:13] Yeah, right now I just moved to Great Neck, New York. I'm kind of traveling south originally from Orange County, New York. And I went down to Westchester. And then now I just closed on a co-op in Great Neck.
Phil [00:02:25] So you're going to be there a while, I would think.
Jeremias [00:02:28] Yeah, most likely. I just got married too. My wife's family's from Long Island, though.
Phil [00:02:33] Congratulations. Congratulations. Are they from Great Neck or where else?
Jeremias [00:02:37] No. They're from Nassau County and run Minneola.
Phil [00:02:42] Well, Minneola...Well, I'm from Long Island, as I told you. And I'm from Nassau County for those who don't know where Long Island is. Or Nassau County, it's actually. I would call it the suburbs of New York. At least it used to be the suburbs of New York. When he mentioned the city, Minneola. That's where I took my driving test in Minneola. I remember that. And my wife is from New Jersey originally. And when she took a driving test, they put up four or five cones. And she had to drive through the cones, parallel park through two cones.
Phil [00:03:22] All right. But she never went on any major thoroughfare. So once you had to actually drive on a highway, she was scared to death. She always says, she'd be a very good driver if there was no traffic on the road. Now, with the pandemic, traffic is less than it was, but she doesn't like to drive on a highway or anything. So really, we just keep her in the garage with the car. And this way, we don't have any collisions or anything. So it works out better that way.
Phil [00:03:52] So anyway, what what do you presently do full time? Your tax manager?
Jeremias [00:03:58] So right now, I'm a tax manager at Withum, Smith, and Brown, located outside of their New York City office. But nowadays with covid, everyone's working from home. So right now I'm in my home office working in Great Neck.
Phil [00:04:11] What percentage of people or is anybody going into the office? You can't go in, right?
Jeremias [00:04:17] Our office is actually open. So we have a quite a few people that still go in. Some people who they're still having to go to clients initially now for audits. They're still doing field work. So if they're working with several people and they're on a group, they'll oftentimes go in a couple of managers, maybe some staff, maybe some interns are scamming or whatnot. But for the most part, I would say it's probably 10 percent of the office that's in.
Phil [00:04:44] How do you know with the people that actually work at home remotely, how do you know that they're actually doing the work or they're just sleeping at home or watching television? How do you monitor that?
Jeremias [00:04:58] Yes, I think it's a combination of everything. So if you're working from home, everything's kind of blended. So people they either get up early to work or they sleep in and they roll over to the computer around ten o'clock or they're working late night. So a lot of people have been mixing things, whether they're going to the gym, they're cooking. Then they do a couple hours of work, they watch TV, they come back. But we've seen, at least in our firm, an uptick in hours and productivity. So we've been able to--especially last year with all the new CARES Act information coming out and all the PPP loans--our business hasn't slowed down. We've had more work than ever. You can ask any accountant nowadays. Just seems like every fifteenth of the month is busy season and there's some new deadlines. So for us, we've been able to make a seamless transition between getting all the work out, servicing all our clients that we haven't had any issues.
Phil [00:05:52] What do you do for your clients? Mainly? Do you do compilations and audits? Do you do that?
Jeremias [00:05:58] Yeah. So our firm does compilations and audits, but I'm mostly on the tax side. So primarily I work out of the private client service niche where we service large clients, multimillionaires, billionaires, where they have a slew of courts as corporate partnerships, trust in the states. Any question they ask that we need to answer and we handle their compliance work as well as some advisory work.
Phil [00:06:24] You have a lot of clients from Great Neck, Manhasset area?
Jeremias [00:06:27] Personally, I don't. A lot of our clients are based out of New York City.
Phil [00:06:31] OK, because Great Neck is a fairly affluent section, I don't have to tell you that. And that has Manhasset, which is right next to it. Just wondering if you get a lot of clients from that area? And is that why you're situated in that area?
Jeremias [00:06:48] Personally, I'm situated here just because the terrain is so close to the city and my wife works out of Westchester. So for her, the bridge is fifteen minutes away. She could hop on the bridge and go over to Westchester.
Phil [00:07:01] Do you like the fact that this virtual whatever is going on with work being virtual or good amount of it, the employees saying they're happy they're commuting is down tremendously because the commute--I remember I lived in New Jersey, commuted to New York City, and it was an hour and a half one way. So that's all my life was was commuting. So it's three hours a day now. I would think a big advantage of this is that you don't have to commute. Employees are not as tired usually. Are you finding that as far as the employees?
Jeremias [00:07:37] Yeah, I think they're definitely working more hours because. A lot of times when you go to the office, you have to wake up early, you have to get dressed, you have to hop on a train, you come in, do maybe four or five hours of work, and then the guy next to you or the girl next you wants to get lunch. Then you go for an hour lunch. You come back, you work a couple hours, and then you don't want to miss the last train out or the last bus. So they usually hop on a bus or train, go home, maybe work a couple of hours from home. So there's a lot of breakups in the day. So if you're working from home, you could easily wake up at 8:30 and just walk a couple of feet to your computer, start work and just bang out ten hours of work and have a really productive day. And then by the time you're done, it's around 6:30. You still have your day where you can watch TV, go to the gym, eat something.
Phil [00:08:25] So actually employees like this. And then the next question is when this is all over, do you think you're going to continue with the tele-commuting?
Jeremias [00:08:36] Yeah, I think even when we do come back is probably going to be a hybrid of some people going back full time, some people going every other week, some people maybe they skip Tuesdays and Thursdays where that's their remote days. But I think we're definitely going to see more of a hybrid approach. I know a lot of firms that are either not going to get more space or at least grow into their spaces. So if they're having a couple of offices, maybe they'll consolidate, maybe they'll keep 50 percent capacity in a sense, where if you have a thousand employees, you only have five hundred desk where people are going to hotel. So it's definitely going to be beneficial because it's going to keep the cost of these large offices, which can be pretty expensive. But at the same time, it gives the flexibility for people if they do want to work from home or if they do want to work in the office.
Phil [00:09:28] Do you have leases that are expiring in your company? Commercial Leasing? Is anything expiring that you won't have to have as much space as you had before?
Jeremias [00:09:39] So right now, based on what I know, I don't think we have any large leases that are coming up or any large plans when it comes to consolidation. I know there's a couple offices here or there that will probably consolidate with bigger offices, but as of now, we're probably just going to maintain the level that we have now. But I know a couple of firms, like I think some of the big four, they're either not renewing or they're not expanding their current office space in New York City.
Phil [00:10:06] You think they're going to churn all that commercial space into condos?
Jeremias [00:10:11] I could see that.
Phil [00:10:13] I was trying to figure out what's going to happen, those commercial office space, you know, these people, the landlords who own it. Alright. They're going to have a lot of vacancy. And I know a lot of times when there's vacant property in a commercial area, a lot of them turn it into condos, apartments, so the people who can have something to rent, buy. But the rents in New York are phenomenal, aren't they?
Jeremias [00:10:38] Yeah, and it's crazy. The market right now is you would think that rent prices would be dropping. But I've heard from a lot of people that are living in the area that they haven't seen rent prices decrease or they're actually seeing some modest increases. So...
Phil [00:10:51] Why--what--how are they getting away with that? I mean, why if there's people not working in the city, I mean, every morning as they show Time Square and it looks like a ghost town. All right. So... go ahead.
Jeremias [00:11:08] There's a lot of speculation out there. I don't want to put anything out there, but I've heard that foreign investors are coming in and buying up property or there's just so much demand out there because everyone's flush with cash and they're looking to make some moves. But it seems like if the market might be a little tempered down in New York City, but definitely over the long term, I think it's probably going to pick up.
Phil [00:11:33] That's like I don't know how many years ago was; it was at least 30, 40 years ago, the Japanese were coming in and buying up everything. They bought up Rockefeller Center, remember? And now it's been resolved. I don't know who owns it. Probably Comcast owns the the NBC studio area. But, yeah, it was still a lot of foreign investors several years ago. And yeah, I never thought about that. You know, I wonder how people feel about that. You know, with this, you know, everyone wants it made in the USA. Now of course, you're not making a product. But yeah, actually, I never thought about a lot of foreign investors coming in and buying up these properties. Which should go down in value. But what do you think?
Jeremias [00:12:21] Yeah, I'm not sure. Especially with this market, I don't want to bet on anything because it's just crazy to see even the stock market, bitcoin, for example, everything just seems to go in the opposite direction of where you think it's going to go. So I wouldn't bet against the New York City market.
Phil [00:12:39] Yeah, I know CNBC has the show, the Dow, Standard and Poor's, and now they're showing Bitcoins, right? Yeah. I mean, that's a risky investment. That really is, you know. You have any investments in Bitcoin?
Jeremias [00:12:57] I don't. But I have a couple of friends that they did invest. One of them, he actually bought it when it was around like nine thousand. We almost had a full coin. And I think he sold part of it to pay for his first down payment on his house.
Phil [00:13:10] Wow.
Jeremias [00:13:11] So he was able to turn a pretty good profit considering it went from nine thousand to about. I think it went all the way up to like forty thousand within a couple of months.
Phil [00:13:20] But then on the other side of the coin, it can go down very quickly.
Jeremias [00:13:25] So we saw it go from forty thousand to about thirty thousand within a couple hours. Wow.
Jeremias [00:13:30] Which is tremendous.
Phil [00:13:31] Yeah. You write a blog and you consider yourself the editor in chief and the blog is the Daily CPA, correct?
Jeremias [00:13:42] Yup.
Phil [00:13:42] How often do you write these blogs? How many times a week?
Jeremias [00:13:48] So when I first started out, I was writing about five articles a week. That was when I was mostly just writing on my own. Since then, I've had a lot of people contributing articles reaching out to me from different industries. I have a good mix of articles on the site right now. I try to just limit it now to about an article a week where I'll post some more current events, current topics that are coming up just to keep more current with the trends in accounting and tax.
Phil [00:14:17] What are some of the trends going on in accounting and tax that you can write blogs about?
Jeremias [00:14:24] Right now the major trends are the second round of PPP loans, there's the stimulus checks, especially with people who might have missed out on certain stimulus checks in 2020 that they could recoup it on their 2020 in tax returns, that you're going to see a lot of questions on those. You're also going to see potential new legislation coming out with the Democrats controlling the Senate, the House and also the presidency. It's uncertain to what extent they're going to be able to pass anything when it comes to major legislation. But we're definitely looking at some hot topic and tax to see if there's going to be any movements either this year or next year.
Phil [00:15:05] You just said you think is going to be a problem passing legislation now. Is that what--even though we have--let me understand this. You said the legislation will be hard to pass, even though both houses are controlled by the Democrats?
Jeremias [00:15:20] Yes, I think especially when it comes to tax policy, if this was any other year would be a much different. I think when it comes to a global pandemic, [and a] recession possibly coming up, that it's hard to convince 50 senators, especially the Senate, is so more on the conservative side, even for the Democratic side, just because when you're running for statewide office, you can't kind of have you have to have a more moderate stance when it comes to certain issues. So to convince 50 senators to vote on a specific tax legislation I think is going to be difficult. And you also have to remember that the filibuster is still in effect. So you still need two thirds of the Senate just to pass anything. So we could see any tax increases be kind of blocked in the Senate. What we could see is some sunsetting of tax provisions over the next couple of years where rates are automatically going to come up, provisions of the CARES Act that are going to expire and we might see natural tax increases from there.
Phil [00:16:27] How do you keep up with all this taxes, all the new tax rules? How do you do that?
Jeremias [00:16:34] So for me, it's a combination of checking out the IRS website. They do oppose the law. They drop different regulations, updates and a lot of it surprisingly from Twitter. And there's a lot of good people out there. They're doing journalism, whether it's in tax or accounting or just different areas of Congress where they have those inside scoops. So they're able to see what legislation is coming out, proposed legislation that might be being written by certain senators or congressmen that you can peruse them, see what's kind of trending, see where they're trying to go. Right now the big trend is in the child tax credit. So we might see an expansion of the child tax credit possibly retroactive to the beginning of the year. But we're going to have to see.
Phil [00:17:23] Why the child tax credit is such a big area?
Jeremias [00:17:27] So the child tax credit, I would say it's one of those credits that it's popular on both sides, both Democratic and Republican. It was expanded under the Republican controlled Senate and House when the CARES Act was--not the CARES Act--the TCJA was passed. So we could see a further expansion of that. We probably would see some bipartisan support if there was a second stimulus bill, if there was $1,400 stimulus checks that are passed or maybe an expansion of the child tax credit, maybe some additional funding for PPP loans or small businesses. So those are things that are more palatable that will probably get some bipartisan support.
Phil [00:18:09] What's your involvement with the PPP loans? Do you--are you fairly familiar with the regulations on how to apply for those loans? And do you have--is that--do you provide that service to your clients?
Jeremias [00:18:23] Yeah. So our firm was pretty proactive when it came to the PPP loans. We had a couple of people that were spearheading a SBA committee within our firm that they were reading all the. In the proposed FAQs and what the PPP loans, there are so much coming out between the Small Business Administration, the IRS, the Treasury that were just so much information that we had to go through in order to service our clients. So initially we were doing mostly applications. We were making sure that clients that were applying for the people, that they were making sure they're using the right expenses, the right payroll to get the right loan amounts on the back end.
Jeremias [00:19:05] What we're doing now is reviewing a lot of forgiveness applications. So we're making sure that there is no reduction in FTE, that everything is reported properly. So some clients will prepare it on their own. They just want us to do a second check and we'll make sure everything looks good, that there's proper limitations on certain wages. But for the most part, they do a pretty good job of preparing. Some clients will just want us to prepare that all together and then we just ask for the proper documentation. I know ADP is pretty good right now of preparing the reports. So they could just go on to their ADP, the website...
Phil [00:19:42] The payrolls, yeah.
Jeremias [00:19:44] ...below the report, send it to us and we could prepare pretty easily.
Phil [00:19:48] Has this become a lucrative area for you? Getting involved with putting together these packages, consulting on the PPP packages?
Jeremias [00:19:58] Yeah, I would say it's not as much lucrative, but just definitely necessary for a lot of our clients. Definitely helps with client retention. I'm getting new clients. It's just one of those services that clients are expecting CPAs to have. So a lot of smaller shops, a lot of independent CPAs. If they weren't able to provide the service, they might not have made a lot of money from reviewing these applications. There's not much effort into reviewing them. There's not a lot of work. Unlike if you're doing a consolidated C Corp return with foreign investments and whatnot, you just have to review payroll reports, make sure everything's on the up and up and maybe it takes an hour or two. The fees aren't that tremendous, but it's definitely a service that you want to provide for your clients in order to retain them.
Phil [00:20:49] Once the clients get the loans, and let's assume there's no more rounds of funding, what will be your involvement with that PPP? Anything?
Jeremias [00:21:00] Yeah so, eventually all of this PPP is going to go away and there's not going to be any more applications. But what we might see on the back end, especially if we have a new administration coming in, if they want to be tougher in the rules. We've seen a lot of companies that they've kind of skirted the rules a little bit here and there when it came to the PPP loans, maybe they didn't report their payroll correctly. Maybe they took too much funding. Maybe they didn't really need the funding that they had a record year in 2020. They got a two million dollar PPP loan. It comes out in The Washington Post and there's a big scandal and they have to repay the loan. So what we might see on the back end is some audits coming up that we might be able to assist our clients just to make sure that they go through the process smoothly. What we're doing now is just retaining all that documentation, making sure that we have everything documented just in case, if anything was to be questioned, that we have a narrative from when they first got the loan, what was their mindset? What were they looking at? Why did they take out the loan all the way to when they had forgiveness and submitted all the documentation? So if there was any audit, we could quickly go through and present any documentation that would be required.
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