The Wandering Minstrel

Well, the tax bite isn’t as bad as I was led to believe when I groped my way through an initial cut at it last month. It turns out that we had enough withholding and deductions to come close to breaking even.

I try and plan things to break even and, up to the prior tax year, it generally worked out that I would owe the Feds and State a small amount. That’s the way I like it, not having to depend on a refund, especially from the Peoples Republik of Kalifornistan, who have trouble paying in actual money. They issue a ‘voucher’ in lieu of a check or credit - Monopoly money any way you look at it.

Things are different this time around since my status transitioned from employed to retired. I had no clear idea how things would work out. It turns out that I owe the usual small amount to the Fed but, unfortunately, the State is going to owe me some chump change.

If I do get a voucher, I believe that my credit union is buying them from members only at face value. They can better afford to deal with any delays that Brokefornia might have in making good on their IOUs.

Well, all the forms have finally arrived and I can now start in on the 2009 income Tax Return. This time, the preparation will be as complex as it can be for us since the 2009 tax year was a hybrid of employment and retirement. I counted a half-dozen 1098 and 1099 forms in addition to the last W-2 form I expect to receive, hopefully, forever. The 2010 tax year should be a little less complicated.

I mentioned in a December post that I got a sneak preview of the 2009 liability which dulled my Christmas spirit somewhat. So, like Don Corleone, I insist on hearing bad news as soon as possible. I’m doing the Turbo Tax Interview stuff as I write this, so I should have a rough cut in a day or so. Then, if the news is really bad, I might file the Daschle/Geithner Alternative Tax form (not included with my copy of Turbo Tax as was the case with Tim Geithner’s copy).

More developments as they occur . . .

We’ve been reading David Codrea’s Second Amendment New Year’s Resolutions over the past several days. Today’s update to the list is “buy a gun.” We fully intend to do that this year, but being on a fixed income in retirement, we have to carefully allocate our funds.

So, I sat down at the computer and used a spreadsheet to plan a budget for the coming year. I analyzed our income from the several sources available, our expenses for the recurrent necessities of life and the potential to allocate funds to recreational things such as vacations and firearms (purchasing guns and ammo plus target range fees). In order to visualize those things, I plotted some graphs of income allocation, basic recurring expenses, cash flow and surplus (if any) cash.

The good news is that we will likely have the cash to acquire a few of the little things in life that give us pleasure. We’re not exactly in the lap of luxury, but we’ll be OK. Until the Obamination cuts us off, that is.

Merry Christmas from the Better Half and Minstrel!

For several years, I have handled most of my financial stuff on-line. A lot of people do these days.

I have several sites I go to, including three banks, an investment site, my company’s retirements benefits site and the Social Security Administration.

Image - SSA splash page - click on it to see that you can’t log in on the Login page

The user interfaces for those sites are all different, but generally well organized and easy to use - all, that is, except the SSA. All the sites listed other than the SSA have a system of tabs or menus that make navigation fairly straight forward. Not the clunky old SSA, though - I guess you get what you pay for when going to the lowest bidder - the interface is counter intuitive, confusing to navigate through and often takes you in circles trying to find what you’re looking for.

For example, clicking the Login link (which is hard to find until you do it once) from the main SSA page takes you to the Login page - except you can’t log in there. You first have to decide from a list of things you can do if you have a password. Once you click on a link, you get to a page where you have to agree or disagree with the nonsensical rules listed there - still no login available. If you ‘agree,’ then you get to a page where you MUST enter your Social Security Number and a password. None of the other sites I visit allow this because they consider it a security risk. usually a user name and password and sometimes security questions like ‘What was your first dog’s name.’

After you log in, you arrive at a page and a half of stuff that tells you all about the page you selected. This is not a one time thing - every time you log in you have to land there and select a ‘continue’ button hidden at the bottom of the page. When you finally get to the page you chose, you get some funky stock browser form buttons, radio selection buttons, check boxes and such. It looks like shit compared to the commercial bank sites.

I went to the site today to try and change the tax withholding amount for my benefit. After several frustrating tries, I finally decided ‘you can’t get there from here’ and I gave up in disgust. Now riddle me this - how can we expect the morons in congress to do any kind of a decent job with healthcare or any other gubmint run programs when the Social Security and Medicare website is so fucked up?

. . . either to be jolly, or to get a head start on your taxes - which currently is canceling out any jolliness the holidays might have generated for me.

I set out this morning to do a budget forecast for 2010. This is important since it will be my first full year of retirement and I need to set up distributions and withholding.

Throughout the day, I studied our spending habits, our real estate holdings, our potential income and all the little things that might happen to us that cost money. I used an Excel spreadsheet to analyze our special circumstances.

The odious task of how much I should withhold for the clowns in Washington and Sacramento to waste on their nonsensical pork projects depends on a forecast of next year’s tax liabilities. I found an on-line 2009 tax estimator at the TurboTax website, so I used it to forecast how much 2010 tax I should withhold. No problem, it did that just fine.

Then I opened Pandora’s Box - I doodled in the numbers for our 2009 return which I haven’t started.

OH SHIT!

Nothing like seeing a preview of the tax bite to blow away any holiday spirit I might have had. Oh well, I’ll just re-watch Bad Santa - some gratuitous blue humor dressed as the holiday spirit should lift mine.

By the way, the little TaxCaster® thingy is handy and easy to use. The image above is clickable for a close-up.

. . . need to be taught a lesson by the working electorate.

Via Veronique de Rugy at NRO:

California from DE-4, the Employee’s Withholding Allowance Certificate, specifically states its purpose as to “accurately reflect your state tax withholding obligation.” Although I don’t know exactly what California law states the state tax withholding obligation to be, it is generally to withhold enough to not be penalized for underwithholding. The taxpayer files form DE-4 to certify to the employer (under penalty of perjury and a $500 fine if you “with no reasonable basis, a DE 4 that results in less tax being withheld than is properly allowable.”) how much to withhold.

The simple solution for the California tax payer is to file a new DE-4 immediately claiming one more allowance. I examined what my personal case would be under the old and new withholding schedules. By claiming one more allowance I would *decrease* my withholding by 12% but only decrease my total annual withholding by $86, which I doubt would be enough to cause a penalty for underwithholding. If all Californians would do this, the state would quickly learn not to fleece its own citizens.

I have not researched what triggers the underwithholding penalty in California nor have I examined whether the state somehow closed this loophole (although I don’t see how they could since citizens could have other legitimate reasons to revise their DE-4).

I’m in! Spread the word, Californians!

I’ve been doing a lot of financial planning over the last several years, for obvious reasons (retirement). It pays to “do the math,” to invoke a trite expression.

There are a number of on-line sorts of tools provided by your favorite financial institutions, but sometimes it is necessary to do some more personal budgeting and planning. That’s when the old fashioned calculator comes in handy.

It seems funny to call a calculator “old fashioned,” but, it’s true. After the first “Bomar Brain” calculators appeared in the early 1970s the technology skyrocketed. Everything “hot” quickly became “not.” The best part of it was the prices kept dropping even as the technology improved.

I got hooked on Hewlett-Packard “Reverse Polish Notation” calculators. I don’t have a dedicated calculator anymore, but I have a dead-ringer for an HP for my PDA called Math-U, from Creative Creek. On the desktop or laptop, I use “Excalibur,” a functional equivalent, although not a look-alike to the HP series.

OK - so what am I budgeting with all these fancy tools? Our guns and ammo habit, of course. Like how many rounds per month we can afford to keep in practice or how much can we set aside for the shiny new pistol, AR or who knows what else? I’ll keep cranking the numbers and get the job done.

Take money from the taxpayer and burn it. Yeah - that works SOOO good.