Irregular Payments

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Yes, I’m still alive, just buried in Tax Season 2007. Oh, that and having my home PC die a slow death has kept me offline at home. Which considering the hours I’m putting in, is probably a good thing, as it means I must socialize with the family those few hours a day I’m away from my clients…

Now, don’t get me wrong, I love my clients. They allow me to feed and clothe and house myself and the family. And allow us to be good Americans and consume away. Most of them are a joy to work with, and even consider more than a few to be friends. But there always is a handful that, well, I swear they are trying to drive me crazy. Here’s a few ways you too can drive your tax preparer insane:

1. Insist on setting an appointment as soon as humanly possible. Then, during the interview, letting us know that several W2s, 1099s, etc. you are expecting haven’t arrived yet. We love keeping track of all of your bits of paper here at the office as you round the rest of them up.
2. Reassure us that you have provided us with everything germane, and to go ahead and file your return. Over the next few days/weeks/months, make several trips to our office bringing in forgotten 1099s for all your savings accounts, 1098s for the kids, etc. Reassure us with each trip that ‘That should be everything…‘
3. After we’ve eFiled your return, call every day or two complaining that your refund hasn’t shown up in your checking account yet. Despite the fact that we gave you an approximate date to expect it to arrive. And despite the fact that it’s several days before that date.
4. Bring in a bankers box or two filled with every single piece of paper that has a number on it that crossed your desk for the year. Even better if you just toss ‘em in there as they arrive throughout the year without even taking a peek at the contents — and then complain how you keep missing all those bills and how all these companies need to figure out a better way to bill.
5. Do the above, and then call daily - or heck, twice daily - checking on ‘How’s it going?‘ Despite the fact that we’ve told you more than once that, unless you are a farmer, we won’t be looking at your info before March 1st.

Well, that’s a start at least. It’s early in the season. I’m sure I’ll be able to add a few more before the season ends…

Tagged:
 » taxes, accountant, tax preparation, annoyances, 1099, 1098

I realize I spent many years essentially running my financial life on autopilot, not really paying much attention to what was going out versus what was coming in. As long as I could cover the bills, I thought I was doing just fine.

But today, a tax return crossed my desk that just amazed me at the lack of attention being paid to their financial lives:

The couple is a dual-income two-kid family with a fairly middling combined income (for the area) of just over $35,000. (You big city folks can quit gasping now - you can live fairly well around here for substantially less than it takes just to survive where you’re at… :)) He makes the majority of the income, but she also works at a local small business for, apparently, ridiculously low wages - her W-2 reveals gross income of all of $8,900. I thought perhaps she was working for their insurance. But no, his employer provides their insurance.

Within their stack of tax documents are a mass of receipts for day care expenses. To the tune of $11,800. In other words, they are paying $2,900 for the privilege of letting her go to work. Oh, sure, they’ll get a tax credit of $1,440 on those expenses, but that’s still $1,460 in the hole for the pleasure of working a crappy minimum wage job. And that’s before taxes. Or the cost of a vehicle to take you to work. Or clothes for the job. Or a lot of costs that escape me at the moment (Caleb at Hail to Pitt has a nice writeup of the various expenses he’d encounter reentering the work force and what he’d really make returning to work instead of remaining a SAHD). Or, for that matter, the non-financial cost of having your children raised by someone else.

I often see very marginal returns on the second income earner, especially around here, with the second job yielding a dollar an hour or some similarly atrocious time-for-money trade after the various costs are taken into account. But the obviousness of how financially costly this second earner’s job is just amazed me.

Well, a few days late anyway…

The calendar on the wall tells me another month has slipped by. So it’s time to take a look at our little balance sheet and see where we stand today. And of course, follow that all up with a few clarifying thoughts on the random bits.

	Dec31′06	Jan31′07	Change
Assets
Liquid Assets
Checking	$29.58	$203.23	$173.65
Cash	1,350.00	410.00	(940.00)
ING Orange Savings	10.96	11.00	0.04
HSBC Savings	3,196.17	3,049.20	(146.97)
Total Liquid	$4,586.71	$3,673.43	($913.28)
Semi-Liquid Assets
Firstrade ROTH	$196.74	$201.83	$5.09
Firstrade SIMPLE	6,388.43	7,366.95	978.52
Wife’s Rollover IRA	45,626.63	46,951.70	1,325.07
Total Semi-Liquid	$52,211.80	$54,520.48	$2,308.68
Illiquid Assets
Our Home	$54,000.00	$54,000.00	$0.00
Our Vehicles	5,250.00	5,250.00	0.00
Gifted Property	45,000.00	45,000.00	0.00
Total Illiquid	$104,250.00	$104,250.00	$0.00
TOTAL Assets	$161,048.51	$162,443.91	$1,395.40
Liabilities
Credit Card Debts
Chase	$20,625.00	$20,250.00	($375.00)
American Express	0.00	0.00	0.00
Total Credit Cards	$20,625.00	$20,250.00	($375.00)
Other Debts
Home Mortgage	$39,480.21	$39,426.69	($53.52)
Low Energy Loan	16,700.03	16,584.94	(115.09)
Line of Credit	2,571.55	1,690.29	(7,931.88)
Total Other Debts	$58,751.79	$57,701.92	($1,049.87)
TOTAL Liabilities	$79,376.79	$77,951.92	($1,424.87)
NET WORTH	$81,671.72	$84,491.99	$2,820.27

A little out loud thinking:

• First off: ‘Wow, looks like a little progress was actually made despite your promise of future sinking.’ Ah, but appearances can be deceiving. For that 31 day chunk, we did get a little traction. But only because others aren’t being particularly timely billing us. And don’t think I’m complaining about that one bit… I’d be perfectly content if they decided to wait until January ‘09 to send out their bills. Alas, I didn’t have to wait long - two good sized bills arrived to add a little heft to that debt just after I put together this table. Now I’m actually looking forward to the rest coming in, just so I can look at a final total and decide how to go about attacking it.
• But just because the debt total will be rising isn’t in and of itself a terrible thing. The additions (which I’m going to make you wait for because I wanna ;)) are basically sunk costs. The work has been done for awhile; they’re just not particularly on-the-ball billers. We’ve been covering a few smaller ones as they come in this month, to the tune that our debt paydown goal is almost 1/3rd of the way to completion after just one month. We’ve paid, after taking interest into account, just shy of $6,300 worth of our total debt. Of course, $4,500 of that was from our $5,000 Xmas bonus, but just shy of $1,800 paid down is decent progress to me (especially considering we’re eating a bit of money with the various activities around settling into a new home at the same time).
• More bleeding from the ol’ HSBC savings. I can’t recall precisely where that little pile of cash went (I’m writing this up while waiting on hold with the IRS at work so my register isn’t at hand), but I’m thinking it was my life insurance renewal. Next month, even more will disappear as I’ve decided to just pay our real estate taxes in full rather than attempt to take advantage of the interest-free period that our county grants us until May. A few bucks in interest just isn’t worth it to me, especially this time of year when my brain will be filled with all my clients numbers. I may occasionally forget mine, and the 15 bucks or so in interest I will forgo isn’t worth the hit to my peace of mind.
• 15% was a pretty heavy return on investment in my SIMPLE, wasn’t it? I wish - most of that was my employer playing a little catch up with contributions. But I can dream, can’t I….

Ah, the IRS awakens. Back to work…

Tagged:
 » debt, report card, retirement, assets, liabilities