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The Olney CPA
(opens in a new tab)Josh Olney, CPA/CFE, Licensed Life Insurance Agent, Microsoft Certified: AI Business Professional, and AI Transformation Leader helping decision-makers create clarity around opportunities, integrity in their numbers, and confidence in their decisions
What internal systems challenge exists that is unique to your business? I often hear business owners describe a problem they believe is so unique that it requires a custom-built internal system. The vast majority of the time, it isn't very unique and doesn't require a custom built system. What starts as a simple spreadsheet, database, or workflow quickly grows into something that needs maintenance, training, troubleshooting, updates, and constant oversight. Before long, the system meant to solve the problem becomes the problem. I've seen businesses spend significant time and money building systems for challenges that proven software already solved years ago.Before building from scratch, ask: ✅ Has someone already solved this? ✅ Does an existing platform solve 80% of the problem? ✅ Am I solving a business issue or creating a technology project? A good system should be simple and serve the business. The business shouldn't have to serve the system.📞 (903) 287‑0399 🌐 olneyfs.com
You cannot always choose the road in front of you, but you can choose the attitude you bring to it.Challenges can develop patience, resilience, wisdom, and strength when you decide to learn from them instead of simply wishing they would disappear.A difficult road can still lead somewhere meaningful.
Recently, I completed Microsoft's AI Transformation Leader and AI Business Professional certifications.One concept that resonated with me wasn't about technology, it was about the business decision-making.As business leaders, we don't invest in something simply because its new, popular, or innovative. We invest because we believe it will create value for our organization.The same principle applies to artificial intelligence.One of the biggest mistakes organizations can make is jumping into AI projects without first understanding the expected return on investment.How is your organization evaluating the potential return on AI investments?🌐 olneyfs.com
"I received a K-1. What is this?"This is a common question I receive from new investors and business owners.The confusion is understandable because a K-1 isn't a tax return itself. Instead, it's a form that reports your share of income, deductions, credits, and other tax items from certain business entities.What Types of Entities Issue K-1s?Typically, K-1s are issued by:• Partnerships & Multi-member LLCs (Form 1065)• S Corporations (Form 1120-S)• Trusts and Estates (Form 1041)These entities are often referred to as pass-through entities because they generally do not pay federal income tax at the entity level. Instead, the tax items "pass through" to the owners.How Does a K-1 Flow to Your Form 1040?Let's say you own 50% of a business.If the business earns $100,000 of taxable income, your K-1 may report $50,000 of income allocable to you.That income is then reported on your individual tax return, even if the business did not distribute $50,000 in cash.The K-1 items flow to various places on Form 1040 depending on their nature. These items include:• Ordinary business income• Rental income• Interest income• Dividend income• Capital gains• Credits and deductionsEach category has its own reporting rules and tax treatment."But I Didn't Receive Any Money!"This is another common question.Many business owners are surprised to learn that they can be taxed on K-1 income even if the business retained the cash for operations, debt payments, or future growth.Remember: Taxable income and cash distributions are not always the same thing.Why K-1s MatterUnderstanding your K-1 is important because it tells the IRS how much of the entity's tax attributes belong to you.If you're a business owner and receive a K-1 each year, don't just file it away without reviewing it. It can provide valuable insight into your share of the business's financial and tax activity.Have you ever received a K-1 and wondered why it didn't match the amount of cash you received from the business?📞 (903) 287-0399🌐 olneyfs.com
A conversation reminded me how fascinating data can be.A friend was recently talking to me about election fraud allegations he read in the news. That conversation eventually led us to a topic that accountants, auditors, and fraud examiners often find interesting: Benford's Law.Benford's Law, developed by research physicist Frank Benford in the early 20th century, is a mathematical principle that predicts how frequently certain leading digits should appear in naturally occurring datasets.Most people assume that the numbers 1 through 9 should appear as the first digit with equal frequency. Surprisingly, that's not what happens in real-world data.According to Benford's Law:The number 1 appears as the leading digit about 30% of the time.The number 2 appears about 18% of the time.The percentages continue to decline through 9.This pattern appears in many naturally occurring datasets, including:Financial transactionsRevenue recordsExpense reportsPopulation dataScientific measurementsWhy does this matter?Because when people fabricate numbers, they often create digit patterns that differ significantly from what naturally occurs. As a result, Benford's Law can sometimes help identify areas that deserve additional investigation.An important point: Benford's Law does not prove fraud.What it does is identify anomalies.Think of it as a smoke detector rather than proof of a fire.When unusual patterns appear, auditors and investigators can perform additional procedures to determine whether there is a legitimate explanation or whether further scrutiny is warranted.What's especially interesting today is how artificial intelligence is making these types of analyses more accessible.Tasks that once required advanced statistical software and significant manual effort can now be performed much faster using modern analytical AI tools which can:Analyze large transaction datasetsIdentify unusual trends and outliersPerform Benford's Law testingDetect potential duplicate paymentsHighlight transactions that warrant further reviewAssist investigators in focusing their efforts where risks may be highestAs a CPA and Certified Fraud Examiner, I've always found it fascinating how mathematics, technology, and professional judgment work together. The tools continue to evolve, but the objective remains the same:Find the anomalies, ask the right questions, and follow the evidence wherever it leads.Have you ever encountered a situation where data told a story that wasn't obvious at first glance?📞 (903) 287-0399🌐 olneyfs.com