Uncategorized

Investors: As If The Markets Haven’t Screwed You Enough…

Leave a comment

So your stocks are down, what, 35%, and all you want to do is cling to the precious dollars you have left? Not so fast. Any money your stock funds made earlier in the year (when times were closer to peachy) is going to have to be taxed. Yea, I know you know that, but CNN wants to remind us that we can’t avoid paying taxes on stocks that have already lost the money they gained, and then some.

Unless your stocks are in a tax deferred account, like a 401(k) or IRA, you’ll probably have to pay taxes on them. “Fund managers had to sell appreciated shares to raise cash for redemptions, which triggered capital-gains distributions,” Tom Roseen, senior research analyst at Lipper told CNN. “So you have insult on top of injury.”

CNN suggests checking if your funds have declared their taxable distributions yet. If they haven’t, sell them and capture the loss. You can deduct up to $3,000 in capital losses from ordinary income. Losses beyond that amount can be carried forward indefinitely to offset future gains. The article provides other tips for investing wisely in the years ahead so taxes aren’t such a pain in the ass.

Investing

Loans Between Friends – Not Always a Good Idea

5 Comments

Have you ever lent money to a friend or relative? In times of economic hardship, more and more often our friends come to us with a request to borrow funds. Or maybe we are at a loss and need a few bucks to get by for the month, and we ask a friends to spot us the dough.

The New York Times reports that it’s best to stop and think before lending money to anyone, even a good friend. The article highlights a professional financial planner who ended up lending her manicurist(!!!) $3000. Her manicurist needed the money to avoid eviction, and tugged on the emotions of a woman who would otherwise advise clients not to lend money to personal acquaintances.

For me, I like to lend money to people in need, but not to my close friends. Instead, I use Prosper’s P2P lending system. At least I can do a credit check on the person before deciding to lend them money, and I can earn a decent amount of interest back in return. (Then again, it looks like it will be a while before I can lend on Prosper due to some legal trouble they’re in.) If I were every to lend money to a close friend, I’d have to think of it as a gift when I part with the funds. If I get it back, all the better.

Q & you A:

What’s the most you’ve ever lent a friend? Did you get that money back, or did it ruin your friendship?

Investing

Should I Hire an Accountant To Do My Tax Returns?

6 Comments

Read the Her Every Cent Counts Taxes Series

Since tax season is right around the corner, I’m trying to figure out if I should hire an accountant to prepare my tax returns, which one to hire, and how much it should cost me. I’ve pretty much decided I need to hire someone to handle my taxes for me this year, as I’m going to be taxed heavily as an independent contractor and need help finding all the deductions I can take.

Then again, it looks like hiring a tax accountant will cost me $350 – $450. Ouch. That’s a lot of money. I’m sure the work they do is worth that, but it feels like I should be able to do all the work myself. An online tax software would cost me $100, so even if I missed out on $300 in deductions I’d still end up breaking even. And how much money in deductions am I really going to get? I can’t take a housing deduction, I’ve never lived in a space big enough to qualify for that. My “business” expenses are minimal – maybe I could deduct hosting costs for my promotional website, and mileage for the route to and from the office. Other than that, I don’t know what I can deduct.

The complicated parts of my return are going to be from my various investment incomes. God, that’s going to be a nightmare. I’m not sure how to handle Prosper (luckily I only have 10 investments out… but it sounds like the earnings on each one will have to be taxed), and then there’s Sharebuilder and those pesky dividends that count as income even though they’re long gone now, and my Vanguard dividends (most are in my Roth but I also have a small regular brokerage account through them, which is supposed to be my grad school or house money), and then there’s my CD from bank of america and various other places I’ve earned income throughout the year. Yea, that’s where it gets complicated.

But I worry that because it does get complicated a tax accountant will have to take longer than his minimum 2 hours to complete my returns. They’ll end up costing more like $500 or something, which is a pretty big chunk of my income considering so much of it’s going to taxes (15% self employment tax on top of everything else, yuck.)

I’ve reached out to 3 local CPAs, and found that their rates range from about $300 for a return (the cheapest) to $400/$500. I wonder if the more expensive ones will save me more money, or if it ultimately doesn’t matter because any extra money they’d save would be eaten up in their fees.

Here are my 3 options thus far:

  • CPA #1 My fees for income tax preparation fees are at $175 per hour. Most returns I prepare are in the $400 to $600 range. The tax preparation fee is all inclusive as it includes meetings and follow up questions and other assistance you may need. Also, I don’t charge any additional fees for questions during the year. Of course, if you need assistance that involves significant time, it will involve additional fees, and I will let you know this in advance.

  • CPA #2 I charge $160 per hour plus out-of-pocket costs and there is a two hour minimum for tax preparation. 2-hours covers a basic return for an itemizer typical family. I can get you an appointment. (I followed up and inquired what out-of-pocket costs would be…) Tax software license access fee, copies & supplies, postage & misc. runs around $65 per individual tax return.

  • CPA #3 I’d be happy to help you with your 2008 taxes. It would cost around 300 for a schedule C. That includes preparation & the initial meeting. We should meet before the year end to maximize deductions.

If any of you are 1099 out there, or have been in the past, do you use an accountant to do your taxes? How much income merits hiring a tax accountant to deal with your returns?

Uncategorized

Today, I’m Thankful For… Free MIT Courses

Leave a comment

Today, I’m Thankful For… is a series dedicated to calling out the free things in life that deserve praise.

I’m challenging all my readers to take a few minutes each day to think of one “free” thing that is awesome in their lives. If you write in a blog, post a link to your “Today, I’m Thankful For…” entry as a comment and I’ll add a link to it in my next post of the series. Since we’re constantly being advertised to for all the things that cost us money, this is an advertisement for all that’s free. Go ahead, buy in.

Today’s Post:

Today, I’m thankful for the free, online courses at MIT. I’ve never been quite the academic my curiosity has made me out to be, so I’m constantly trying to balance my ADD with my insatiable thirst for new knowledge. Also, I have some weird anxiety over succeeding when I’m actually paying for a class and it “counts,” which gets in the way of learning what I’m supposed to be learning. So these free classes are ideal.

Yes, they’re really free. You don’t get the interaction of talking to a professor, or other students. They’re pre-recorded classes from other years. Some of the classes only have notes, while others offer in-depth readings, and I think a few even have videos of the professors giving lectures.

I’m most thankful for MIT’s computer programming courses. One of my goals for 2009 is to learn computer programming. It’s not so much that I want to be a programmer professionally as my current job would benefit from understanding a bit of code. I also dream of being able to make apps as a hobby, at least to the point where I understand where API’s fit into the various programming languages I’m learning. I’m starting out with Python and Javascript. I’ve read a whole bunch of online tutorials (which are also free) but this (six credit) “Intro to Computer Programming” course has a text that’s really clear and helping me get my head around the complex topic. And it’s FREE! How cool is that?

If you’re interested in other subjects, they’ve got you covered. Business classes from one of the top MBA programs in the world? Sure thing. Arts & Literature classes to make you feel like you’re really in college again? Yup. Want to spend your spare time learning about Physics? Go for it.

When the cost of attending college is so high, and getting higher by the minute, it feels like I’m saving hundreds of dollars reading all of these online courses in my spare time. Maybe one day I’ll apply to their graduate MBA program and get the real first-hand experience of taking these courses, but until then I’m happy learning for free!

Read Previous Installments of “Today, I’m Thankful For…”

Part 1: Trees

Uncategorized

Where Your "Hard" Earned Tax Dollars Are Going

1 Comment

Fighting terrorism is expensive, no doubt. Our hard-earned tax dollars go to making sure America remains safe. The latest tactic to get secrets out of the enemy is… Viagra.

For elder Afgani males who have trouble getting it up for their younger wives, CIA officers are now offering a few little blue pills in exchange for information, reports The Washington Post. And it’s working.

“The enticement worked. The officer, who described the encounter, returned four days later to an enthusiastic reception. The grinning chief offered up a bonanza of information about Taliban movements and supply routes — followed by a request for more pills.”

Uncategorized

The Accidental Breadwinner: Some Women Have Their $hit Together

1 Comment

Thanks to The World of Wealth for pointing me to this fascinating NY Times article called “The Accidental Breadwinner.”

Writer Karen Karbo details her three marriages, her long-ago dream to be taken care of by her breadwinner husband, and the reality of her making most of the dough in each of her marriages. She writes how a friend, whose husband made enough money to give her time off for a few years to “figure out her life” ended up with a cheating husband, stuck in a marriage in fear of now having enough money to live the life she’s become accustomed to.

Karbo poses the question, “Is it better for the longevity of a marriage if one party (usually the woman) feels financially trapped?”

Well, yes. Marriage, just like any other business relationship, tends to survive longer the more complicated it is to get out of. But that isn’t the kind of marriage I want to be in. Does it really take three marriages to get it right? Karbo sounds like she’s found happiness now, with split incomes and an unromantic agreement on who pays for what (including who pays for who’s kids.)

As I’ve written before, I’m worried about my current relationship because I’m the half of the duo motivated by money. That means my dreams of being the woman who works part time and takes care of the kids while my hubby brings home the bacon are all but dashed. Those dreams aren’t real anyway, but they certainly are, in the back of my mind, what I expected. That’s what happened to my mom. She went to school for fashion design and worked in the industry for 10 years, only to quit when I was born and become a housewife. And she’s always been afraid to leave my father because, like Karbo’s friend, she doesn’t want to also leave the life she’s grown accustomed to. The money she’s used to spending. Even if she did get a job, she’d likely be earning minimum wage. At 50 something years old, how many raises can one expect before retirement age approaches?

I refuse to get stuck in a marriage that’s destined for a situation like that. I’d rather be the breadwinner, accidental or predetermined. Still, my dream is a marriage where both parties bring in a sizable amount of income. My aunt and uncle are prime examples of that type of couple. The husband owns a one-man marketing firm, stays home, takes care of the kids, and still takes in six figures. The wife works as a marketing exec for a magazine, and also takes in six figures. Together, they own a nice house in a really nice neighborhood. That’s the kind of life I dream of. I can only hope that Mr. Sweetheart will realize that asking for raises is an expected and acceptable part of being in the workforce.

Uncategorized

10 Tax Rules Changes for 2009

1 Comment


2009 is right around the corner. Even though you’ll be spending the first few months of ’09 figuring out your 2008 taxes, make sure you know what’s going on for taxes in 2009.
[via:: diazconsulting]

1. Roth IRAs: Income caps for high-income earners rise in 2009. If your Adjusted Gross Income is in the six digits, this effects you. The pay in limit for Roths increases for singles from $105,000 to $120,000, and for couples from $166,000 to $176,000.

2. Estate tax leaps to $3.5 million, up from $2 million in 2008.

3. Annual gift tax exclusion will rise to $13k per donee, up from $1,000.

4. The standard mileage rate for business driving is 55¢ a mile for 2009…a drop of 3½¢ per mile from the rate in effect for the final six months of 2008. For medical travel and moving its 24¢ per mile. When driving for charity its 14¢ a mile.

5. Standard deductions rise in 2009. Married couples can claim $11,400. If one spouse is 65 or older, $12,500. If both are, $13,600. Single taxpayers get $5,700. Those 65 and older can take $7,100. Household heads get $8,350 plus $1,400 once they reach age 65. Taxpayers who are legally blind are allowed to add $1,100 to these amounts. Also, married tax filers who do not itemize can augment their standard deduction by up to $1,000 of property taxes paid. Singles filers can add in up to $500 of taxes paid.

6. If you are 70½ or older you can skip minimum required payouts from retirement plans and IRAs for 2009 without a penalty.

7. In 2009 the maximum 401(k) contribution increases to $16,500, up by $1,000.Individuals born before 1960 can contribute an extra $5,500, for a total of $22,000.

8. Contribution payin limit for defined contribution plans such as SEP IRA accounts and Keogh plans increases to $49,000.

9. Personal exemptions are $3,650 for each filer and their dependents.

10. Annual caps on deductible contribution payins to health savings accounts rise in 2009. The maximums increase to $5,950 for account holders with family coverage and as much as $3,000 for single coverage.

What isn’t changing…

Contribution limits for IRAs and Roth IRAs. They’re still $5,000 a year, plus $1,000 more for anyone born before 1959.

Culture, Entertainment

Millionaires, Boobs, Big Houses, and Reality TV

4 Comments

Forget the talent portion, these days reality TV stars can make a career out of being – themselves, without any talent besides perky tits, an itty-bitty waistline, and the ability to convince an television audience that they’re a money-hungry dumb slut. But hey, they’re making way more money than I am and probably having a lot more fun doing it, so who am I to judge?

In our culture, we reward people for being as superficial as possible. The latest news from the world of Reality TV is that Megan Hauserman, the big-breasted bombshell of Beauty & the Geek, Rock of Love 2, Charm School, and I Love Money is starring in her own gold-digging reality series.

In case you’re a millionaire who wants to broadcast your quest for a trophy wife on TV (instead of just hiring a high-priced call girl like a good, normal millionaire), Megan, the accounting major from Florida, wants you. That is, she wants your money. And you. As much as any star on a reality TV dating show could actually want another person who needs reality TV to set them up.

She announced the casting search on her MySpace page earlier this month… are you “Looking for the ultimate TROPHY WIFE?” Not only would your prize come complete with a life’s worth of obnoxious and bank-account draining spending habits, you’ll also win, uh, the right to one hellova pre-nup if you decide to actually seal the deal.

Granted, I’m guilty for watching these TV shows. I can’t get enough of gold diggers and the wealthy, and their drama. It makes me somehow be able to accept and take pride in my middle class status. It also makes me terribly jealous of women who are hot enough to qualify for a television show where they are offered on a silver platter as a Trophy Wife.

Another show all about money, from a bit more normal perspective, is Bravo’s “Real Housewives of…” I’ve caught a few episodes of their various series – Orange County, New York, and Atlanta… and I must say, I’m more jealous of these women than I am of Ms. Trophy Wife Hauserman. Then again, most of them were that hot when they were in their 20s and 30s (most are still that hot, just in the 40+ year old sense… I don’t think you can be a Trophy Wife once you hit a certain age, then you’re just a wife.)

Still, these women are… real people. Their psychology is a bit different than that of say, a normal working person with no means of reaching the upper echelons of society, and they expect a bit more out of their shopping sprees… but even with all that money, they’re still real people. I watched an episode recently where two couples went to Sonoma’s wine country and felt awkward in a ritzy restaurant that served a bagillion mini courses and offered a snobs dream menu. It’s fun to watch the rich feel silly being what rich is supposed to be.

Another reality TV series I couldn’t help but watch lately is Paris Hilton’s: My New BFF. The series ended a few weeks back, but I remember the episodes clearly. And in the end, I still don’t understand what the contestents were competing for, and how this supposed friendship would work. It makes for riviting TV (on the reality TV show spectrum, on MTV) for sure, but why compete to be a best friend? Friendships, like relationships, are supposed to be equal. You can’t compete for a best friend and then expect a relationship to be normal. Paris bought her BFF contestents expensive gifts throughout the competition — they shared lavish days at the spa, gold-plated $1000 sundaes in NY, and shopping sprees where Paris announced “it’s on me, whatever you want.” I doubt that’s how the “friendship” would work once the show concluded.

If anything, the show was interesting because what Paris was really looking for was a business partner. With Nicole Richie out of the picture, who would be her assistant (I mean, partner) in crime? She needs someone who looks cute, takes a good photo, and can help her continue to brand… herself. The show didn’t mention any sort of pay this best friend would be getting, but how would her new bestie afford to be Paris’ friend without some compensation? The show should have really been called Paris Hilton’s: My New VP

I do applaud MTV for their series Exiled, where they take super spoiled teens (who appeared on My Super Sweet Sixteen) and send them to third world countries, where they’re forced to spend a week living in the shoes of people with far less than them. They have to do things even I wouldn’t do – like build houses with cow poop. Ew. It’s a good show in teaching these young, spoiled children about the rest of the world before they’re too old and spoiled to care.

Uncategorized

I Hate Home Depot

3 Comments

(Home Depot rebates ARE A SCAM. I will never buy any big-ticket items from them again.)

Home Depot owes me a $60 rebate. My boyfriend and I bought our good friend a dishwasher for her birthday in August, and chose to spend a little more that we had originally intended to because of the rebate offer. So I got her a $399 dishwasher, plus spent $60 on delivery, and another $50 or so on parts. The dishwasher had a $60 rebate if you ordered delivery, so I paid, filled out the rebate forms online and thought I’d be receiving my rebate shortly.

Yea, right. Rebates are designed to screw you out of your money. They make you jump through so many hoops, eventually it’s just not worth your time to pursue the matter further.

This sort of bullshit really works me up, though. I’ve been corresponding back and forth with a woman in the customer service department and getting nowhere fast. My last e-mail with “Bianca” informed me that I need to e-mail them a JPG attachment of my receipt to prove that I, indeed, paid for delivery along with my purchase.

So I took a screenshot of the e-mailed receipts Home Depot mailed to me as I bought the dishwasher and confirmation on my rebate submission. I have a feeling that’s not what they’re looking for, though. The bad news is that since the dishwasher was delivered to my friend, any sort of hard copy receipt that came with it is either lost or gone. I never saw it. But I paid for it. On my credit card. And Home Depot e-mailed me confirmations left and right about all these things. Then they e-mailed me saying I don’t qualify for the rebate because I didn’t pay for the delivery. Fuck that. I paid for delivery. And a whole bunch of other crap.

Moral of the story – rebates are evil, Home Depot’s customer service department blows, and I’m going to keep blogging on how much Home Depot sucks until I get my rebate.

Visit Us On TwitterVisit Us On Facebook