VITA/TCE Certified

Ok, my long term readers are probably thinking, hey, I've read this post before. True, last year about this same time I did post an article with this same title (see here). They may remember that I volunteered (that's the "V") to provide Income Tax Assistance to low-middle income people as well as Tax Care for the Elderly (see how I snuck the acronym in there?). I reported last year (here) that I did taxes for about 100 people.

Well, I'm back at it this year. I passed the basic exam one day earlier this year (simple coincidence) and have decided to step up a notch and took the intermediate exam. I passed that one too, so I will be allowed to do slightly more complicated exams this year. We start doing taxes on January 30 and continue until that magic day in April (which my family knows the reason for the magic). I will do taxes on Friday and Saturday afternoons (assuming I get the slots I requested).

This year there are a few changes. There's a new $400 ($800 for joint taxpayers) credit called Making Work Pay. It requires a new form, but it's relatively simple. (Special note to my son - you don't get it because you're my dependent.) And of course there's the first time home-buyers credit, but few of my expected clients are likely to qualify for that (likewise the follow-up home-buyers credit). I'm prepared just in case as I helped out one tax payer after the tax crush last year with their form 5405 and I'm expecting to help another in May of this year.

As usual, one of the most complicated forms is for Earned Income Credit. Sadly, the people who need the credit the most are the least likely to understand. I never even try to explain Advanced EIC. And I spent a lot of time this year trying to make sure I understand the tuition tax credits. Did you know there are FOUR different ways to claim tuition credits? And the law has changed (for the positive) on what you can claim. This credit helps those who are in school (or paying for someone in school). I think it's great because in theory, this will result in a future big income and support for me when I'm collecting Social inSecurity.

I did my own taxes on paper for a number of years. For most people, it's not that hard. You don't have to go to some store-front tax location (that will be gone after 4/15) and pay a few hundred dollars to get your taxes done. If they are that complicated, it's worth paying a REAL professional to have it done. If you need help, look for a VITA site near you (search on VITA on the IRS website). Avoid those Refund Anticipation Loans (see here for another reason to avoid them).

I'll report back here in April with a final comment.

Cash for Clunkers - Continued

Well, it looks like it's official (see here), the Senate has now approved an extension of the Cash for Clunkers bill. The bill was either a huge success or a huge expenditure depending on your point of view. It's a redistribution of wealth from the taxpayers (only 50% of Americans) to those who are in a position to buy a car. Or maybe it's another bailout for car manufacturers.

Some interesting information has come out about the program and actually a lot of details have not come out. But so far, it looks like GM has been the biggest winner with 18.7 percent of new sales. Ford has actually seen a profit. From my previous post, I showed how the increase in sales was short lived, so I hope Ford is investing the profit wisely - it won't last.

Another report I saw said that Ford Explorers were the most traded in vehicle along with older mini-vans. My suspicion is that these owners had been waiting to get rid of their "clunkers".

Remember the program had a dual purpose: #1 to help the auto industry and #2 to increase fuel efficiency. If the Ford Explorers and mini-vans were actually being used and the new cars are taking their place, the second goal will have been reached. I suspect the less fuel efficient cars weren't in heavy use and the newer efficient cars will be used by new drivers, thereby increasing overall fuel usage. (I considered selling a clunker and getting my wife a new car, but I didn't qualify).

Details of the clunker program have been hard to find. The AP reports that the "Obama administration is refusing to release government records on its "cash-for-clunkers" rebate program that would substantiate — or undercut — White House claims of the program's success." So despite promises of "transparency in the people’s White House," things seem to be mostly cloudy. I guess like the stimulus plan, we don't have time to be forthcoming, we have to act now.

My main concern though is the change in the program. The program was initially approved (after a lot of discussion) for $1BILLION or until November 1, which ever came first. We've reached the $1BILLION mark, so the program should be ended. The expansion is going on without any real analysis. Everyone's having a good time, so we just go on spending.

Some of my kids have learned (the hard way) that only the Federal Government can continue spending when they run out of money. In this case, the government doesn't even know how much it has. It's like ignoring the balance column in the checkbook register (do people still use those?)

The new bill should have gone the way of the clunkers -- into the shredder. What do you think?

The push for health care - our economy depends on it

I have to give our current administration the credit, they've certainly learned the way to America's pocketbook. "It's the economy stupid!" is what I've been reading between the lines the last few days.

See, President Obama keeps telling us he inherited this mess, it was worse than anyone thought and the stimulus plan is working exactly as planned (was this Plan B or Plan C?). Then he tells us the we have to have health care reform in order to save the economy.

This way, he wins either way. If health-care gets voted in, obviously he's lived up to his campaign promises (until it doesn't work - then he changes his promises). If it doesn't get voted in, well he tried. If the economy continues to go south, it's not his fault, he tried to pass health-care to fix it. Soon, the economy will be the reason we do everything.

It really bothers me the "change" I've seen in the last six months. During the campaign, abortion issues were above his paygrade. Well, he's gotten a payraise and now we are funding abortion in other countries and he's pushing for funding here. The stimulus plan was needed immediately to fix our economy, the money was going to create jobs immediately and now it's working as designed and will take a few years.

Sadly, none of this surprises me, I expected it all along. Now what's next?

Misc topics and random thoughts

Camping trip was great. I took about three short hikes. The first one was on a trail I hadn't seen before, part of the Palmetto Trails to Jocassee Gorges. It's a 12.5 mile hike, I did a small part of it, but was expecting visitors, so headed back. From what I can see, it's a good hike but not real scenic. The second hike was along the Carrick Creek. On this hike I was accompanied by my three year old grandson. We hiked for about 20 minutes, took a 10 minute break, then hiked another 10 minutes before heading back. The hike is supposed to last about an hour, but with his short stride, I'm sure we didn't go half way in 30 minutes of walking. The last hike was back along the Palmetto Trail, but he was tired so we didn't go far.

All in all the trip was great. Two nights in a tent, far from everything. I'll post more about it later.

While I was gone, GM announced bankruptcy. I haven't blogged about it, but last August I bought some shares of GM on a lark. This was back in early August, before the bottom fell out. My theory was that the government would bail them out and the stock would go up. They did get a bail-out that month and the stock ticked upward for a day or two, then the credit market fell and, well, it was a lark.

I don't mean to imply that I backed the bail-out. I think it was a bad idea. But I really didn't think the government would let them go bankrupt. Who knows what will happen now. Maybe I'll blog more about that later too.

This past weekend, an abortion doctor was shot and killed. Make no mistake, this was murder. The conservative blogs that I read agree. The doctor has been called a killer (and I agree with that), but it doesn't make his murder any less of a murder. His (alleged) killer has been arrested. He deserves a fair trial, but assuming he is found guilty (and I see no reason why not), he should probably face the death penalty. It was simple pre-meditated murder.

Another reason not to RAL-ly (*Updated*)

Has your stimulus check arrived yet? Still waiting on that $600 (or $1200 or $300) to arrive so you can go stimulate the economy?

Well, it turns out that if you got a Refund Anticpation Loan (RAL), you may have to wait a little longer.

USA Today says "taxpayers whose fees were deducted or who took out refund-anticipation loans are receiving paper checks because those loans involve a third-party bank account." (see the full article here)

Now I personally believe these RALs are a RIP-off. They allow you to file your taxes and then get your money in about a day or two. For fees of $200 or more. I know people who got their refund check in under two weeks. So let's say your refund is $400, you take a RAL (or "rapid refund") and walk out with $200. You've effectively borrowed that $200 for two weeks. I don't even want to think about the interest rate involved.

But now, to make matters worse, your stimulus check is being delayed because of that. Where's the good in this?

(Preview announcement: By special request, I intend to blog on Cash Advance stores next week. Watch this space!!)

*** Update
One of my faithful readers found out (the hard way) that their stimulus check was delayed, not due to a RAL, due to paying Turbo-Tax with the refund. When you file online, you can file free when your income is below a certain level. Above $54,000 in income and you'll have to pay. So, let's say you use TurboTax (I think other tax preparers do the same thing) and find out you'll get a nice refund. You can allow TurboTax to take their fee out of the refund.

However, since TurboTax is an intermediary in the tax process, your stimulus check will be on paper, instead of direct deposit.