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.

“We’re the biggest advocates for Michigan City schools,” Megan said.

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.