MICHIGAN CITY – Teaching financial literacy through Junior Achievement, driving a fire truck through Long Beach or volunteering for the Chamber of Commerce are just a few ways the Applegate family can be seen serving the community.
Giving back is something Paul Applegate firmly believes in, and has passed this belief on to his children.
But the biggest genetic trait in the Applegate family is a passion for accounting. Paul learned the trade after his accountant father, John Applegate, encouraged him to take a bookkeeping class in high school.
Paul opened Applegate & Company CPAs more than 30 years ago and now employs two of his four children, Megan and Blake Applegate.
“It’s either in my blood or we were brainwashed at a very young age,” Megan joked. She remembers announcing at her pre-school graduation that she would one day be a certified public account in her father’s office. “It took with two of us.”
A passionate supporter of Michigan City and advocate of Michigan City Area Schools, Paul is proud to say 11 of his employees are Michigan City High School graduates – including six of his seven certified public accountants.
MICHIGAN CITY — Applegate & Company CPAs, a local accounting firm, celebrated 30 years in business on Saturday with an open house at their Woodland Avenue location.
Opening in 1984, the business was started by certified public accountant Paul Applegate and his father, John Applegate, with the father and son business operating until John's death.
This year, Paul welcomed his children, Blake and Megan Applegate, both CPAs, to the business – enjoying the distinction of three generations of Applegates having worked for the company.
“I like numbers, as geeky as that sounds,” Megan said, explaining why she followed in the footsteps of her father and grandfather.
Speaking on behalf of herself and her brother, Megan said, “When we see what my dad has done with the business, we wanted to work alongside him as long as possible.”
Blake and Megan both worked in other cities – Chicago and Madison, Wisconsin respectively – gaining outside knowledge and experience before joining the family business.
Paul enjoys having his children on staff, calling them the “future of the company.”
During the 30 years Paul has been in operation, he has seen many changes in the accounting business – technology, automation and tax laws. He said the basic principles of the business have remained the same, however, with customer service and clients always being the first priority.
“We're fortunate to have a great client base,” Paul said. “If not for for the clients, we wouldn't be here.”
These clients, along with employees, partners and friends of the business, were invited to Saturday's open house marking the 30-year anniversary of the business.
A local company, Applegate & Company is proud to not only serve Michigan City residents, but employ them as well. Eleven of the company's 13 employees are graduates of Michigan City High School and Michigan City natives.
“We create local jobs to bring kids back to Michigan City,” Paul said, adding they are good jobs with the average employee at his firm earning more than $50,000 annually.
Additionally, Applegate & Company partners with their clients for outside business whenever possible, even having their client Rasta Joe cater Saturday's open house.
“We try to partner with clients whenever we can,” Megan said. “My dad would go out of his way to buy a car from a client rather than go somewhere else.”
She said one of the many things her father taught her was “when a client does well, you do well.”
The company serves more than 400 clients nationwide. Although the majority of their work is focused in Northwest Indiana, the Applegates work with businesses in California, Texas, Florida and several other states.
More information about Applegate & Company is available by calling 219-871-7880 or by visiting its Facebook page.
Blake agreed, describing himself as one of many success stories coming from the Michigan City public school system. He graduated from Indiana University’s Kelley School of Business with a 4.0 GPA; and in 2012 he was one of only 39 people (out of 92,000) to be recognized for his performance on the Uniform CPA Exam.
Applegate & Company CPAs serves about 400 businesses across the country, but many of those are local small businesses. Of those, 42 are non-profit organizations which Paul said always receive something in return for their business.
“Every not-for-profit gets something back from our firm, whether it’s a discount on their bill or whether it’s a donation for a fundraiser,” he said. “We pride ourselves on giving our clients quality service at an affordable price. We are very fee-conscious. Our clients have things to spend money on other than our fees, so we try to work efficiently and give our clients good value for the money.”
Paul said he has seen the role of a CPA evolve over the years, and now he and his team are involved with their clients well past tax time.
“We get so many questions that go beyond tax preparation, we’re almost an outsourced controller for some of our clients and they depend on us a lot,” he said. “There are some clients who don’t make any major moves without calling us first – and we encourage our clients to call us on important decisions because it’s easier to make the right decision than it is to unwind a bad decision.”
Most clients, Paul said, want help when it comes to running the business better, making more money and saving taxes as well as succession and retirement plans for the business owners and their employees.
“We have a lot of non-profit clients and sometimes executive directors aren’t necessarily the most financially savvy,” Megan said. “So we explain their financial information, how it is affecting their organization, how it impacts their grants … just breaking down that information in a way that is understandable.”
However, the first few months of the year are typically busy for the accounting firm as they work through the tax season.
“My favorite question is ‘Am I going to get audited,’” Megan said when asked about common questions from Applegate clients.
To help the general public with common tax questions, Blake compiled a list of general tax myths when it comes to filing a tax return.
• Myth: If I itemize my deductions and/or extend my tax return, I am more likely to be audited by the Internal Revenue Service.
Reality: IRS audits are triggered by many different factors on a tax return, but income seems to be the most correlated factor. For the 2015 fiscal year, individuals had a 2.4 percent chance of an IRS audit when their income fell between $25,000 and $100,000. This number jumps to 11.8 percent for individuals with an income exceeding $200,000.
• Myth: If I am an employee of a company and I do work “on the side” for cash, my cash side income is not taxable.
Reality: The Internal Revenue Code defines gross income as “all income from whatever source derived …” This definition includes cash income that the weekend warrior is earning on the side. Additionally, what many people actually do not realize is that income from illegal activities is taxable and must be reported on one’s tax return.
• Myth: If a divorce decree lists me as the custodial parent of my child, I automatically get to claim the child on my taxes.
Reality: This is a pretty contentious topic between divorced couples. The rules state that the parent with the most overnight stays by the child is considered the custodial parent – not the divorce decree. There are ways for the custodial parent to release a dependency exemption to a non-custodial parent but, generally speaking, the parent with the most overnight stays has the right to claim the child.
More information about Applegate & Company CPAs is available by calling 219-871-7880 or by visiting the company’s Facebook page.
