Friday, November 11, 2005

Evolution of a Tax Article

As I sit here, at 5:00 a.m. waiting to make a call to the East Coast, I am reminded of something an English teacher was fond of saying in high school. He said, never assume. "You make an ass of you and me":


Fervently chasing down a story for MarketWatch, I spoke to several experts about my topic, as well as several agents who represented experts. But when youwrite articles for national publications, they expect you to go beyond the experts - and get a personal flavor to the story.

So, I needed a real person who couldtell me his or experience with this tax issue. And one of the public relations agents arranged just such an interview for me.

My goal was to finish all the interviews yesterday and spend Friday, Veterans Day, with my husband.

Then, I could use the weekend to read all the research I've collected. That way, Monday, I'd know if there were any loose ends to tie up - and I could craft another brilliant, wonderful and informative article for my TaxWatch column.

It took all day to connect with this woman, so by4:30 yesterday evening (it's dark, so it feels like evening), I thought I was finishing up the last pieceof the puzzle. Only this woman, the human interest focus of the piece, didn't want to be identified by name!

The PR agent never bothered to ask the basic question - "You understand that the journalist is interviewing you to include your story in the article. Are you willing to have your name in the article?" She assumed that this woman, a satisfied customer of her client, understood.

Why else would a journalist want to talk to a private person, rather than an expert? Unless, of course, they were doing an expose on something and needed to keep the source private - like Deep Throat.

Oh, I did ask here is she wanted to expose someone or something? But, no, she was happy with her experience - and just wanted privacy.

My friends, if you're seeking privacy, you shouldn't be volunteering to speak with journalists. What part of that concept is unclear?

The Silver Lining

Actually, as it happens, due to this lady's confusion, I had a very interesting conversation with one of my experts who did provide a customer willing to be identified. You'll meet Dan in the MarketWatch article this month. He gave me such an interesting slant on the story and how to improve an IRS procedure - that I think even IRS will like the idea.

After all, what's the point of writing a tax article if I can't also change the way the tax system works? That would be too mundane. Anyone could that!

So, tune in to next week's TaxWatch column to see how to avoid paying taxes on millions of dollars - or even a few measly hundreds of thousands - without having to work hard.

Friday, October 07, 2005

Filing for a Trademark Online

Did you know that you can file for a trademarkall by yourself, online? Yup, just go right here:

The cost can be as low as $275.00, if you use their quick application and have everything you need at hand.

Before you try to do it on the fly, start here and read the specs for what you have to have at hand before you file the application.

You'll need to know what International Class ofGoods or Services your product or service to select to register your product. Look it up here:

Interestingly enough, while filling in the application online, I found that when you get to that question, their system let's you do a search and will inster your choices. There are some selections that let you add descriptive terminology. Let's see if the Trademark officeattorneys accept my additions or insist onchanging them.

In the past, I've filed by myself, using their regular, paper applications.
The last two applications I filed several years ago were held up due to some graphical representation issues. And I did something really, really, really stupid.

Instead of going to a graphic artist, and just paying them to produce the graphic the way the Trademark office wanted, I was so frustrated and annoyed, that I hired an attorney, on the recommendation of a friend, to finish up the application.

Rather than spending, perhaps, $50 or $100 on the designer, I ended up spending a couple of thousand dollars on this attorney, who just dragged out the whole process because he never even called the Trademark Office attorney to ask specifically what they needed in order to finalize the application. (I always did that and those guys were generally quite helpful.) Instead, this professional just kept wasting time on letter after letter, without really addressing the TO's specific requests. This PRO even charged me $300 just to receive the acceptance and certificate and mail it to me. (At least until I called him and questioned that ridiculous charge.)

All this stupidity arises from one of the big frustrations of my life, one of the things that get me bogged down every time - the fact that I don't have the time to learn any of the various graphic or design programs. Whenever it comes to graphics, since I don't have to skills, I've always wasted a day or more putzing around with the wrong tools or just messing up, trying to figure out the right tools. (OK, OK, I know, read the instructions!)

Of course, as with the trademark application, that also leaves me severely limited in what I can do by myself when I am working on an e-book or CD, or trying to create the graphics to go with them.

Then, a couple of years ago, I stumbled on the LogoCreator software by Marc Sylvester at LaughingBird (don't you love the name?). I've been using that to do quickie things when I need something NOW.

Like, this week, when I was filing a trademark application online - I hit a road block. I needed a graphic of a specific size, density and format that I didn't have. (Have you ever noticed, every time you need a graphic for something, the one you have is always the wrong size or something?)

The Trademark Office requires the SPECIMEN to be in JPG format:
"The image must be in .jpg format; scanned at no less than 300 dots per inch and no more than 350 dots per inch, with a length of no less than 250 pixels and no more than 944 pixels, and a width of no less than 250 pixels and no more than 944 pixels. All lines must be clean, sharp and solid, must not be fine or crowded, and must produce a high quality image when copied."

So, here's my other frustration. My designers give me a graphic, but while it might be good for the original purpose intended, it doesn't fit the use I have for it right now - like that application.

Well, using LogoCreator, I've been able to make the revisions to size, detail, format. I was able to take one of my exisiting graphics which was inGIF format. I loaded it into the LogoCreator and converter it to a higher density JPG with theright dimensions to fit into US Patent Office's system. As a result, I was able to file the application online, on the spot, without having to wait a day or two...or forever, to get the graphicI needed.

Coincidentally, this week, I got a note from Marc about a new tool he's just created. He calls it an eCover Creator, but I read the details. You can create a lot more than just gorgeous covers for e-books and discs. It will also let you use it for logos and other graphics you need on yourwebsite.

And this time, if the Trademark Office needs graphics changes (because, oops, I sent the graphic in color and I think it should have been black and white), I can handle it myself!

Tuesday, September 20, 2005

Hurricane Katrina Emergency Tax Bills Summarized

Legislation is pending to provide tax relief to victims of Hurricane Katrina, and to extend it to victims of other Presidentially declared disaster areas.

Currently on the books, we already have rules for reporting casualty losses sooner, so you can start getting tax refunds now, when you need the money. I've explained how to that in today's MarketWatch article - After Disaster, a Tax Break.

To get a summary of the legislation pending, let's turn to NAEA -
The National Association of Enrolled Agents, whose members are tax specialists, licensed to represent taxpayers before IRS - and who work with all state and local agencies to help you resolve your tax problems.

Hurricane Katrina Relief
Last Thursday, both houses passed by voice vote similar bipartisan tax relief bills for victimsof Hurricane Katrina. The Senate bill interesting.

While the differences will be worked out in conference, the common elements of the billinclude provisions:
  • allowing deductions for taxpayers who take in hurricane evacuees ($500 per evacuee up to $2,000)
  • exempting from taxation debts cancelled because of the hurricane
  • waiving the 10% penalty for early withdrawal from retirement plans
  • eliminating the 10% floor for casualty losses incurred in the disaster area (including those claimed on amended returns
  • extending the replacement period for non-recognition of gain (for property in the disaster area) of involuntarily converted property)
  • raising the mileage rate for charitable use of automobiles (the two bills differ slightly here, with the House at 70% of the standard mileage rate and the Senate at 60%)
  • allowing use of 2004 earned income to calculate thechild credit and earned income credit for 2005 returns
  • creating a tax credit for employers retaining on their payrolls disaster area employees.

What else should we expect?

Well, in an unofficial transcript of the Senate floor colloquy between Senators Grassley and Baucus yesterday, Senator Baucus said, "This is just a start. We have clearly to do more...In the long term, we're obviously going to bring up a package for long-term assistance, enterprise zone, depreciation acceleration, bonding authority to help rebuild infrastructure..."

Thursday, August 18, 2005

In Honor of Bad Poetry Day - Bad Tax Poetry

In honor of Bad Poetry Day, I am throwing
out the first mal-poesy.

How badly can you do?

by TaxMama

The time is near
to finish all returns,
to send them to our clients dear
and allay all their concerns

It only took them 7 long months
while we stack files and sat on our buns,
waiting, waiting for clients to-do lists
to be do'd while we clenched our fists.

Finally, finally, the simple return
missing only the interest is done
and we have time to burn
and go out and have so fun!


Now, it's your turn.

Please use the COMMENTS button to add your own worst shot.
Be sure to identify yourself and include a link to your website.

Fine print (get our your magnifying glass): By sumbitting your awful poetry, you are authorizing TaxMama and all TaxMama-related companies and businesses, to reprint your worst effort anywhere and anytime...attributing that dismal work oto you.

Also, please feel free to use the COMMENTS button to vote on the worst poetry.

Friday, August 05, 2005


Oh my goodness! Last summer, an old friend died.

Two week before he died, he called me and entrusted me
with caring for his son. Now, since his son was middle-
aged, you wouldn't think that would be such an issue.
But Dad had sheltered him so well from financial matters
that his son didn't even have any of his own credit.

And Dad left debt - but substantial equity in his home.

It's been a year now. It's almost the anniversary of Dad's
death. And Son just called me with the latest update on
his financial situation.

He has a job interview next week.

Some History

During the past year, Son has sorted out all of Dad's
financial issues. He's become adept at working with
his attorney to have the credit card companies settle
some of Dad's debt. He's paid the rest. He's established
credit of his own, to the point where he is getting those
solicitions from the credit cardcompanies inviting him
to 'sign here'.

I promised his dad that I would find a way for Son to
stay in the home, even though the mortgage payments
would eat up all of his annual earnings. We tossed
around some ideas to make it possible for him to stay
for at least 7 years, to get him on his feet, and to buy
time to build up additional equity in the home.

Since he couldn't afford the payments on the residence,
I advised him to get a roommate. Then, once his finances
were stablized, we'd sit down and talk about using some
of the money left over to get an education and to learn a
more marketable skill, and/or start his own business.

The plan was that he would use a negatively amortized
mortgage to keep his payments low. He knowingly would
eat into the home's equity for five-to-seven years, until
he could raise his income. (This is not advice I normally
give. TaxMama usually discourages negative loans.)

In his case, he knows the equity will increase dramatically
because of an adjacent development of $10 million homes.
He and his neighbors are already getting offers to buy their
homes for over 5 times what Dad had paid for it. So, it isn't
a gamble.

Son followed my advice and got a roommate. What a disaster!

He literally kicked that guy out the day after he moved in.

Yet, the day Son kicked him out, another tenant called
wanting to move in. He did.

It Changed His Life

Talk about serendipity! Because he got the roommate,
Son is being invited to apply for a position at one of the
top companies in the world, with a recommendation -
from his roommate. When Son gets the job next week,
even if he starts in the most menial of positions at this
company, his financial future will be set on a secure,
healthy path, with full benefits and growing income.

He will never have to start a business and run the risk
of failure, or of losing his inheritance. (This worried me
greatly, due to his previous lack of experience with
finances and managing a business. Though, he's learning
so quickly!)

Of course, he will probably still get educated, but the
cost is likely to get picked up by his employer - and
he'll have a specific focus on what he ought to study.

And the Point is?

Where is all this going? Is this just some TaxMama brag?


This is about doing something that so many people don't
do after a death or divorce.

It's about being patient - and making plans.

Too often, when we experience something tragic, like the
Big Ds, we just want to push everything and everyone away.
We want to clean house, literally and figuratively.

You just want to end the pain, and just brush away all
the things that bring you painful memories.

You want to end the pain, so you want to settle all
the issues too quickly, taking the shortest, fastest route.

Or you've been numbed by the pain and just don't do
anything...hoping it will all take care of itself.

Or you're trapped in the pain. It becomes a comfort.
It becomes a safe, familiar friend, so you don't le tgo
of anything, you don't resolve or finish anything, because,
somehow, it gives you a connection to the person who died,
or to the good part of the marriage you once had.

So, here are TaxMama's Tips for Tragedies

1) Don't throw anything away for at least one year.
Anything you think should be discarded, put into a
separate place to review when you're sanity returns.

2) Don't give anything away for at least one year.
If it wasn't a bequest in the will or a promise made,
set aside the things you want to give away until you
can evaluate if you're giving it away out of painor out
of love and generosity. If it was out of pain, hold on to
it a little longer. You may decide you do want it after all.

3) Don't just throw money away because things are
too complicated for you. If you can't deal with things,
get help - ask for help from family or friends whom
you trust. If there's no one, find a good, reliable tax
and financial professional to help you. Remember, after
a death, I've seen many people arrange for a substantial
part of the deceased's debts to be discharged or charged
off by lenders. Your finances can become more manageable.

4) Don't dump your home because you can't afford it.
Pause. Think. If you're willing to reduce your standard
of living anyway, is there a way to keep the home by
getting a roommmate, or turning it into a bed and
breakfast, or...come on, think. Use your imagination.
How can you keep your home, so you don't kick yourself
later. (If I had bought my ex out of our house and kept
that home - today, I'd have no mortgage debt; my payments
over the years would have been closer to $400/month
instead of $1,500 - $2,000/month; I'd have been able to
collect a healthy stream of rental income from it for
decades; and I'd have over half a million dollars in
equity today. What would you have if you hand't just
rushed through your divorce or post-death trauma?)

5) If you only have a limited amount of money, and
not too many skills, or not much education, don't just
invest the money in securities. Invest it in yourself.
Sit and think about what you want to do. Use that
money to get an education or training to learn a new
career, or to start abusiness, or to hire help who can
ensure that your existing business starts to prosper.

Friday, July 08, 2005

War of the Worlds

FILM REVIEW - War of the Worlds
by Steven Speilberg

If you're an H.G. Wells fan or an S-F afficionado, you will find yourself compelled to shell out the high price to see War of the Worlds on the big screen. The special effects are well worth the cost of the film.

But if you're looking for a script that makes any sense, or characters that you can bear to follow for the whole two hours of the film, or a plot that doesn't tax your intelligence - I have two words for you - STAY AWAY!

I suppose that I could have overlooked those flaws, being an avid science fiction fan and reader since age 4 - except for all the shreiking in the theater....uh, coming from the screen.

Speilberg certainly got lazy with his directing - and his screenplay.

1) Was it really necessary to have Dakota Fanning (as the little daughter) shrieking and whining all the time? That stupid character never shut up. Me, me, me, me, me... She was a spoiled, insensitive, annoying and distracting idiot. What a waste of a perfectly good, young actress.
Besides, let's look at reality, during real danger, even children have the sense to shut up and listen and let their parents guide them. Really bad writing.

Didn't Spielberg trust his film enough to believe we could handle our own screaming?

2) Tim Robbins, as Harlan Ogilvy, was apparently supposed to be playing the Curate character from the book. In the book, the Curate goes mad and never stops babbling or making noise, and endangers their position.

If Tim Robbins was playing insanity... that didn't come through. He just seemed annoying and afraid. Those scenes really could have been directed much better.

Besides, there really wasn't much character development - or perhaps they cut out those scenes?

And Spielberg's writers, Josh Friedman and David Koepp, never explain why, with all the people running down that hill, with the fire licking at their heels, why Tim Robbins ONLY invites Tom Cruise and Dakota Fanning into his little hidey-hole.

3) The ending, the epilogue. This is H.G. Wells' version:

And strangest of all is it to hold my wife's hand again, and to think that I have counted her, and that she has counted me, among the dead.

It's satisfying.

Spielberg's on the other hand...well, I'm not going to tell you his ending. But suffice to say, it makes no sense, considering the overall context.

But, there is one really poignant moment at the end, that is well acted and believable.

And Mariann Mayberry, playing the ex-wife is excellent.

Overall, noisy, noisy, noisy, great effects, poor writing. If I had to rate it, I'd says about 2.5 stars.

Speilberg has done some wonderful, magical, amazing films. This isn't one of them.

Is anyone still writing movies with actual plots?

I don't remember the book being this insipid. Do you?

Not sure? You can read the whole book online!

War of the Worlds, by H.G. Wells

(And my octogenarian mother wanted to see this? I can see her now!)

Movielink Generic 234X60 Animated

If you'd rather stay home and enjoy your favorite film -
You can download them for a lot less than theatre prices.

Thursday, June 16, 2005


Another Father's Day weekend coming up. And me, without a father. Sigh.

Seems I have been fortunate enough to have several mothers over the years. But only one father. And I adored him blindly. Little girls are like that, you know.

Recently, listening to my brothers, I've come to realize that he wasn't the wonderful, warm, cuddly, brilliant, entertaining, adorable daddy I knew. I loved to crawl into his warm, toasty bed on Saturday mornings and have hime tell me stories. He was such an expressive, fun raconteur.

The mind is a fascinating thing. I didn't remember all the fights and arguments and battles the boys had. Or I understood my father's point of view and dismissed them, because he always made perfect sense to me. Even when we totally disagreed, I understood his perspective. The boys, well, they remember him in anger and frustration.

To me, my Daddy lit up the room.

Dad's are interesting. A dear friend whom I adore, told me that he and his son have finally started to hash out their personal animosities. (Or at least his son's.) Knowing him, I couldn't imagine him doing the things his son feels he did or didn't do. Yet, my friend says, his son is right.

Why don't dads get along with their sons?

While I am adamantly not a fan of films and television programs that keep depicting the parents constantly in the wrong; that keep having the parents apologize for everything while their evil spawn wreak havoc all over and just sit back and reap the the praise for being ill-mannered, inconsiderate boors...

sometimes, parents do need to clear the air and apologize.

Dad, how do your children feel about you?

And if it's not great...what are you going to do to change that?

It's time to stop taxing your filial relationships - while you can still save them.

Remember, though, if you're still lucky enough to have parents -

Stop and think.

When they were being parents, they didn't have a manual.

They had to guess and fumble and bumble along - just like you
did when you had your children.

Cut them some slack. Whatever they did, they meant well.
And they didn't know any better. They just did the best they could.

With love to my daddy...wherever he is.

Tuesday, June 07, 2005

Supreme Court Turns Invalids into Criminals

I dearly hope that none of the august Justices on the Supreme Court ever have to watch someone close them die, slowly, from cancer.

I dearly hope that none of these fine men and women ever have to see someone they love in such intense pain that they beg to die...knowing that they can dial back that pain for their loved one - but they have to withhold the treatment.

Just because the Justice Department is having a hard time fighting illegal drugs is no reason to put so many people into incredible pain and misery.

I have a dear friend who fought cancer, raging through her body, at least three times. The doctors told her, on the first round, that her chances were slim. But she wasn't buying into that nonsense. Marijuana helped her beat the pain of the cancer and the treatments.

It's taken years, cost her everything she had, including a husband,...but, so far, she's in fine shape. And she's helped thousands of others deal with the trauma and pain and shock of the experience as a volunteer counselor and speaker. Today, she does even more good doing fundraising for various charities. Because she lives, she makes the world a better place.

She couldn't have done it if she'd had to endure the pain.

Pain doesn't just hurt the body. It drains the spirit, too.

Do you understand what yesterday's Supreme Court Decision criminalizing medical marijuana users really means?

It's not about the drugs.

It means that the Supreme Court of the United States of America has determined that states don't have the right to pass laws within their own borders. It means that if all the voters of a state pass a law, and the Federal government doesn't agree, they can overrule our rights and make us criminals.

What do you think about the implications of the Supreme Court's decision?

Wednesday, May 11, 2005

Capitol Alert - No Fly Zone

Air Force Master Sgt. Arthur Powell said. "This is one reason the D.C. area should feel secure. It shows we're ready to respond at a moment's notice." This is according to a Scripps Howard news report

Is this the most ridiculous statement you've ever heard?

An LA Times report tells us that the Cessna was spotted and noted at 11:28 a.m., 17 minutes from the White House. Yet, despite no response from the pilot when they tried to raise him on the radio, they didn't scramble jets until 11:55 a.m.

Now, being a TaxMama, I've just got to do the math:

- 11:28
27 minutes

Hmmmmmmm...... Let me see if I can figure this out?

The plane was 17 minutes from the White House and they sent jets to intercept it 28 minutes the White House and Capitol were demolished 10 minutes earlier?

Yup! I agree with Master Sgt. Arthur Powell - I feel really safe. Don't you?

But only because I'm 3,000 miles away from Washington, DC or the World Trade Center site.

That's our tax dollars at work!

Your TaxMama

P.S. Incidentally, why is it that not even ONE of the articles covering this even explains why the pilot had his radio off when flying through and around so much restricted air space? Or didn't respond?

I've been in Cessnas and they all have radios - even when you are flying on visual. And flying clubs tend to maintain their equipment. (The last person using the plane always calls in to report any maintenance requirements.)

Friday, May 06, 2005

Licensed To Tax

With the new legislation I told you about recently potentially shutting out unlicensed tax preparers, it will be more important than ever for today's taxpreparers to get a credentialed.

(You should see the really nasty letters I got after writing about it - as if _I_ had written the legistlation. Puhleeeze!)

But that means there's a scramble to take the IRS's Enrolled Agent Exam this fall. Studying is going to be harder than ever because, this year, for the first time, there is no cushion. If youdon't pass all 4 exams, you don't get to keep the parts you do pass.

Interestingly enough, this is one of the very fewprofessional credentials you can get that don't require a college degree. And while I don't see a minimum age requirement, no doubt you need to beat least 18 to sit for the exam.

But, beyond that, if you can pass it - you're in business. And talk about the ultimate home-based business!

With today's computers and high-speed hook-ups,and electronic filing, and the wide range of cheap to expensive software available - you can make one heck of a 6-figure living, from your living room or college dorm room.

Oh, did it just occur to you that this might be a great way to work your way through college?
No kidding - it beats waiting table or delivering pizza.

So, if you've been doing bookkeeping, or tax returns or been studying tax or accounting, this could be your ticket.

Today is the last day to save $100 on the registration price. So, take the skills survey after you review what the class offers...and get an invitation with the secret link to your $100 savings.

Wednesday, April 06, 2005

Losing it!

Well, finally, after about 7 years, I've seen my assistant nearly lose her temper.

Let me tell you, it takes a lot. She spent this morning being me:

Lulu had to prepare a prior year return, installthe software, trouble shoot it, troubleshoot equipment failures and come out with a gleaming, glowing tax return with all the printing attributes intact.

We had to do a 1999 tax return.

For some reason, with all 5 computers being retained just for the purpose of being able to access really, really old programs (some spelled DOS), we didn't have1999 software on ANY of them.

So, I rooted through all the old discs to find the program we used for 1999. It was TaxWorks. That was the last year - and I'd forgotten just how bad a year that was for software.

We installed it on the computer that had all the other TaxWorks software on it. It blew the monitor.

(OK, so the monitor was already bad and that's why it was sitting there, turned off all this time. It wasn't really the program's fault. But we'd forgotten that monitor wasn't functional.)

This time, instead of me doing it all, Lulu had to take care of switching monitors. Plugging in another monitor helped her avoid having to install the program on another computer. That done. On to the return.

Even with all our access codes intact and entered, the program wouldn't compute the tax return. After trying every-thing, she finally had to break down and call tech support. Listening to all this from my side of the office, I was very pleased with how well the TaxWorks folks treated her, calling at the height of tax season about a 5 year-old program.

I don't know what they did, but she got itworking.

After I put in some review and teaching time, the return was done.

Ah, now to print. First - connect this unused computer to the new network printer, then...Oh yes, another of those bizarre TaxWorks DOS idiosyncracies. You have to load the soft fonts -before every attempt to print.

After a couple of attempts, we got it working. Proofread the return.

Then, just as a last precaution, decided to call the client and ask what address (of his many options) he wanted to use on the return. (I HAD asked him during our meeting, but...) Naturally, it was NOTthe address we had.

Trying to reprint the address pages took another hour of trying to get the fonts to work properly.

After 4 hours...I could finally see some smokecoming from her eyes, hands clenching, teeth grinding. And I felt so good!

See, it's not just all in my mind. It's not just me being a nasty, sour [enter invective here].

Dealing with hardware and software issues all day really does turn the sweetest people into monsters.

Well, almost. She never did lose it.

When she left at 1:15 p.m. Lulu had a sunny smile....

or maybe that's because she was leaving.

[Note: Tax Pros I've heard from who are using TaxWorks these days are loving it. ]

Monday, March 28, 2005

Boring Things That Change Your Life

This morning, in an e-mail, a friend complainedabout doing something very boooooooorrrriiiing.

And it started a train of thought that sent me all the way back to this class I took in college that I expected to be totally uninformative. But I was curious.

It was a class in Judaism.

Now, you have to understand, by that point in mylife I had spent nearly 18 years in Jewish schools,from the age of 2 in nursery - to Yeshiva University,while I was still in high school. So, I knew the class would be boring. But I wanted to know how auniversity, in a secular environment, would teach acourse like this.

And, I'll admit, the class was nearly as boring asI might have expected - except for the teacher.You couldn't help being charmed by Rabbi Bergman. He fascinated me. He was the first rabbi I'd evermet who didn't have an eastern European, Yiddishaccent. He spoke American like a native. And he had street smarts. But more than that - he had warmth - and made us all welcome.

But that wasn't what caused my life to change. It was just the first part of a chain of events.
The following year, I took another class I thoughtwould be boring - one of those fillers to meet arequirement - sociology. [yaaaaawwwn]

I that class there was this loud, middle-agedwoman with a screechy voice and lots of opinions. She was always the first to stand up and speak out on any topic - usually with a controversial opinion. Mesmerizing, though. She looked like someone's mom - and was.

She turned out to be Rabbi Bergman's wife. And we hit it off immediately, because, having met him gave me an excuse to engage her in conversation. (You have NO idea how shy I am, and how rare it is for me to start a conversation with somone.) But, with Pnina, I could, because of the previous connection.

Aside from welcoming me into their family, they got me THE job in a national CPA firm [Ernst & Ernst] that started me onmy way to learn about income taxes.

So, sitting in on that first boring class started achain of events, leading me to meet you!

Next time you have to do something you're reluctantto do, look upon it as an adventure. Just watch what fun it bring you - in the long run!

Best wishes

Eva Rosenberg
Your TaxMama

Wednesday, March 09, 2005

The Most Overlooked Resource By Small Businesses Today

Let's face it, we know that money in a small business is usually tight. We're always scrambling to pay bills, often at the last minute. Oh sure, we usually get them paid on time, or just under the wire...

But that often means running around to post offices just before they close so we can get things postmarked. Or, often, when it comes to taxes, having to pay extra for proof of delivery so we can avoid penalties.

Or, to ensure that you meet a payment deadline, you use one of the online tax payment services, like - which charge you a charming"convenience fee" of 2% or more of your payment.

OR, you end up missing the deadline and paying late fees to IRS. Some of those can be pretty costly. (On late payroll deposits - it's 10$!)

Is this really the best use of your time and your money?

Heck no!

You can save all that time and money by simply joining IRS's Electronic Federal Tax Payment System (EFTPS)

Using this system, you can transfer money from your bank account at the last minute to pay your payroll taxes.

You won't have to run to the bank.
You won't have to pay for overnight shipping.
You won't have to pay extra to get a receipt.

You simply initiate the payment the day before the tax is due. You get a time-stamped receipt, in effect, based on the electronic date and time of your transaction. It's called an EFT Acknowledgement Number.

Another benefit I think you'll like. For those of you who have a tendency to forget what taxes you paid, or you know the date and amount, but didn't note the year or type of tax....all you have to do is log into your account and, voila! The data is right there.

Didn't bring the information to your tax pro's office? No prob. Just log in from his or her office. The information is at your fingertips. Kind of fun, actually. It's like having POWER!

And you've incurred no fees. No "convenience fees", no wire transfer fees. And no extra staff time costs to run to the post office, and risk a traffic accident or...

You can pay any of your business taxes.

In fact you can use EFTPS to make your quarterly estimated payments. You can schedule all of them for the whole year. But, what's if, when that day comes you don't have the money? Or you're income is down, and your estimated payments should be smaller? Just log in 48 hours before the payment is due - and cancel it - or change it. Simple.

Anyone can sign up. You don't have to be a business.

Frankly, I don't see any reason to be running up"convenience fees" on credit cards. They're not really convenient. In fact, they're a waste of money.

If you're in business and have to pay payroll taxes, corporate taxes or self-employment taxes - sign up today.

If you're not in business, but have to make estimated payments on your investment income, or have prior year taxes to pay, or regularly get notices about adjustments, changes or corrections to your account, set a personal EFTPS account. IRS will welcome you.

Don't worry about this being part of IRS's system. It's not a sinister thing. As Martha would say,"It's a good thing."

[BONUS: Tim Winship at tells me that some debit cards or
related bank accounts, will pay you bonus points or miles when you use them. He can tell you which ones.

Thursday, March 03, 2005

Elect the West Wing Writing Team

Did you see this week's West Wing?

(Come on my friends,you must - you'll be tested on it each Friday.)

The writers were amazing.

(Credits show Debora Cahn, Mark Goffman and Josh Singer who are finally doing a strong job replacing Aaron Sorkin.)

Seriously, though, they tackled children's rights and lowering the voting age.
They tackled the games lawmakers must play to get a chance to vote -
when the opposing party (or Speaker of the House doesn't want an issue addressed).

They got into an open discussion about stem cell research (though, they left out a discussion of the alternative, non-threatening sources of stem cells, like dental areas - the roots of teeth).

They even got into a discussion about a ridiculous fight between hunters from Montana and Canadian law enforcement. They showed just how such childish behaviour could escalate into war - if you let it.

The point is - you don't need to agree with any point of view. But they provide so much great material to think about, or to start a conversation about.

Heck, if you can't find a way to start chatting at a party...try bringing up the West Wing.

To read about the topics:

I am loving the ideas and insights they bring into my home.

(Except for the stuff with Mako -I mean, what, taking a terrific, interesting guy likethat and giving him and Martin Sheen such wimpy scenes together. What is this - Will and Grace? Not only is it unbecoming for a president to whine about a co-winner of the Nobel Prize, it's so silly. For heaven's sake - that was a weak story line. I am a long-time Mako fan - and didn't enjoy either him or Martin Sheen in that segment - and learned nothing about the Nobel Prize.)

Monday, February 07, 2005

An Open Letter to President Bush

This was sent to President George Bush at on February 7, 2005.
You are welcome to copy this letter, and modify
it to express your opinions or ideas and send
it along to the President and/or to any member of
the Legislature. You'll find links at the bottom.

Dear President Bush,

I must say that I really admire your bold and strong
push to fix the Social Security problem. No president
has really taken that on as a major campaign, that I
can remember.

But, may I respectfully object to the direction you
want to take this - using privatized accounts.
And then may I provide an alternative solution?

Why is this not a good idea? Here are 5 reasons:

1) The amount of money going into the accounts will
generate negligible earnings for the average worker.
Even for someone earning $50,000 per year, the
personal portion will not add more than about $50
per month to their SS check, after 20 years of investment.

2) The money that goes into the private accounts
simply reduces the eventual benefit taxpayers will
receive from the SSA.

3) The people who will benefit the most from this are
the people who won't be living on Social Security. They
are the people who are sophisticated enough to work
the market - and their own investments and savings
are doing well. SS income will play a small part in their
retirement budget.

4) The people who will primarily be living on Social
Security checks don't have the time or expertise to
manage those accounts effectively. Most don't even
have investment accounts presently. And the ones that
do - well, most have lost much of their capital during the
boom, then bust years. Some are finally recouping
and getting even with their IRA contributions after 5 years.

5) The small amounts that go into these accounts each
year are too small for the investment banking industry to
really administer cost-effectively. Even now, IRAs and KEOGHs,
etc. with under $1,000 are not permitted to be invested in
mutual funds or stocks by the banking houses. The sums
are too little - the relative costs, too high.

An alternative to private accounts - that will cut the out
flow from the Social Security fund:

Consider looking at all the things that the Social Security
trust fund is used to support. Do a solid analysis of the various
expenses that drain that fund.

For instance, a big drain is money going to children. Did you realize
that when someone dies, their children are able to collect from
Social Security until they are age 18, or even up to 24, as long
as they are students.?

This is a wonderful boon for many college-bound youths. It's like
getting an instant scholarship. In fact, my brother used this
source of support to get through UCLA after my father died.
So, I know how just how valuable this can be.

But, seriously, friends, why are we paying children out of
Social Security?

Shouldn't that money come from some other source?

If we continue to pay children, can you imagine how much we
could cut the drain on Social Security if we just changed ONE thing -
limit the support payments to age 18, or whenever they complete
high school.

Perhaps the support could continue for another two years after
high school - not for college per se, but to cover some vocational
training that would give the child a marketable skill so they could
earn enough, working part-time, to get themselves through college.

You made an excellent point about education and training
in your State of the Union message.

And if you ever watch the West Wing, you see the writers promoting
a candidate, Jimmy Smits, who is promoting a much longer school year.
Granted, I think 249 days is quite excessive. But I also see that children
don't spend nearly enough hours per day in public schools.

They have far too much time off, to be latchkey kids or to be pushed
into joining gangs. That time, an extra hour or two in school can be
used for vocational training or working internships - that could result
in either corporate scholarships, or a means to earn their way through

And keep them occupied long enough to stay out of trouble.

If you've ever looked at the private school and religious school
systems, all those children stay in school until 4:00 or 5:00 p.m.
without too much suffering. And you do see the lower rates of
criminality among these kids who get home around the time
their parents get home from work.

While this might cost more to the school systems, it would save
millions in welfare and other social service and prison costs.

Someone needs to look at the overall savings - not just the increase
to one entity's budget.

Please, do take my suggestions into account when you work to
improve our financial welfare. You're in a position to do a lot of
good. And it does appear that you're making a good faith effort
to do exactly that.

This would be such a powerful legacy that, historically, it would
overshadow any controversy you've generated due to America's
military activities.


Eva Rosenberg, Enrolled Agent

To send this letter to your Legislators,
please feel free to use the links here:

Thursday, February 03, 2005

President Bush and Social Security

Yesterday, President Bush presented his State of the Union message to repeated applause, purple fingers, and some boos.

One of the things he postulated was allowing us to set aside a portion of our Social Security tax contribution and investing it ourselves. His vision is to have the money invested in extremely conservative securities - bonds, or very safe stocks.

But President Bush didn't mention any provisions to absolutely prohibit you from using the money in that account. PERIOD. NO WITHDRAWALS.

But if this is to replace part of SS, it should be untouchable until you are eligible to collect Social Security.

Shall we see how much we could earn if we did that?

Let's look at someone who earns an average of $50,000 per year for the next 20 years. We'll call her Sarah. At today's contribution percentage (which Bush said he didn't want to raise), Sarah's annual Social Security contribution would be $3,100 (6.2% x 50,000).

Let's say that she is permitted to set aside 10% of her Social Security contribution. That would give her the whopping sum of $310 per year!

[I had a small amount like that in a client's IRA account - and the bank wouldn't let him move that from the Money Market account into ANY stocks or mutual funds. It was too small for them to bother with.]

But, let's say, under Bush's program, the investment houses are mandated to accept these minute sums. And they have been warned that their fees must be severely curtailed.

So, let's be optimistic and say, that on the average, over the next 20 years Sarah will earn 5% each year, after fees. [To see a really good analysis and explanation of the different plans on the table, read Andrea Coombes article]

Do you want to know how much money would be earned after putting $310 into the account for TWENTY years and earning 5%?

About $10,250.

Now, let's suppose this is your account. With that enormous sum earned in 20 years, in addition to your Social Security benefit, you'll get about and extra $42 per month...assumining you're still earning 5%. Double that if interest rates have reached 10%.

So this risky social experiment, if you follow the guidelines, you're apt to supplement your Social Security benefits by, maybe, just maybe, as much as a $100 per month.

But you will lose a similar amount because of the 10% you didn't contribute each year, so you'll be about even - except that you spent the last 20 years straining your mind, managing the account. Some few people will do a little bit better. But the average person is apt to do a little worse.

This seems like a waste of energy to me.

In fact, Janet Haynes sent a link to this New York Times article about what happened to the good people in Chile who instituted a similar plan about 25 years ago in the administration of Gen. Augusto Pinochet - The title of the article tells you how well it worked: Chile's Retirees Find Shortfall in Private Plan. Read it. You'll be fascinated.


Child Support

What about looking at all the things that the Social Security trust fund is used to pay for. I'd love to see our Congressional analysts or watchdogs, do a solid analysis of the various drains on that fund.

For instance, a big drain is money going to children. Did you know that when someone dies, their children are able to collect from Social Security until they are age 18, or even up to 24, as long as they are students.?

This is a wonderful boon for many college-bound youths. It's like getting an instant scholarship. In fact, my brother used this source of support to get through UCLA after my father died. So, I know how just how valuable this can be.

But, seriously, friends, why are we paying children out of Social Security?

Shouldn't that money come from some other source?

If we continue to pay children, can you imagine how much we could cut the drain on Social Security if we just changed ONE thing - limit the support payments to age 18, or whenever they complete high school.


Perhaps we could extend the support for another two years - not for college per se, but to cover some vocational training that would give the child a marketable skill so they could earn enough, working part-time, to get themselves through college.

Heck, why don't high schools provide the training? Why is that kids are getting out of high school and don't have the skills to get a decent paying part-time job? There are so many ways for a student to earn money. And today, with the Internet, people with strong Internet literacy are in strong demand - if only for data entry or site updates. Students could even do that from home.

[Heck, I live about two blocks from a major State University and can't find a student in that whole computer department who can do work on an Internet site that meets the level of some of the 10 year olds's sites I've seen. OK, I'm not asking for elaborate - but at least proofread your showcase site to make sure all your links work and the graphics are clean...sheesh]

Let's look at that old concept:

Don't just give them the fish so they can feed themselves today.
Teach them to fish so they can feed themselves forever.

Students Can Do it On Their Own!

With the proper skills, they could learn to work on cars, do plumbing or electrical work, or handyman work, or work in labs, or in offices, or hospitals desperately need good people... Businesses could get away with paying the students a bit less because they aren't quite as experienced and can't work full-time. But the kids could earn enough to get their educations AND learn a little bit about how the world works, outside the shelter of the university.

It won't hurt as much as you might think.

I know what it's like to be that age. You want to get all the growing up and educating out of the way so you can start your real life. It's so exciting. You're so exhilirated with all the opportunities you know you're going to have. To have to set your real education aside for a year or so, or to make it all take longer because you have to pay for it yourself... that hurts so much you can hardly breathe. But you do. Many of us did.

And we took it in stride. We never even thought of it as a hardship. There's a whole other world in college when you're a night student. Your instructors tend to teach you with more respect because you have a better understanding of the world. Your classmates are all in the same boat you are, some even juggling families - so you never feel any different. In fact, you can make some pretty good, lifelong friends. (I did that, too.) And you can have fun!

Talk About Win-Win

Let's face it, you have your own spending money, because you're earning it. You don't have to answer to anyone for it. You don't have to work for years, or decades to pay back the grants or student loans. So you'll never have to default. Just think what this does to your credit!

Not only would this relieve the Social Security fund of a substantial burden (4-6 years of child support), but we might be able to keep more support jobs in this country because there will be someone to fill them. AND we'd groom a new generation of adults who'd be apt to understand money and responsbility better than they do today.


I'd love to see your views on how to fix Social Security without raising taxes unduly, or cutting benefits for retirees. Please, your comments are very welcome. In fact, I'll try to collect them and pass them on for you.

Of course...if you'd like to make your voice heard directly, please feel free to contact your legislators and executives directly. Here are links to their e-mail and snail mail addresses:

TaxMama's Call to Action Page

Friday, January 28, 2005

Tsunami Relief and the Red Cross

Last weekend, I went to the Castaic Community AwardsBanquet, where my friend, Tax Angel, Rita Veen, EA was being re-installed as a director of the Chamber of Commerce.

Mike Antonovich, the Supervisor of the LA CountyBoard of Supervisors spoke to us, in the course of installing the officers and honoring some of thespecial people in the community. He talked about the damage caused by the recent storms in California. We all know that many people's homes were severlydamaged. Many dozens of families camped out in a community center and a church for days. And they now need housing and transitional help until they can get back into their homes or replace them.

What disturbed me about Antonovich's comments is his statement that the Red Cross refused to provide anyhelp or support whatsoever. Despite the fact that many people in this community have always helped theRed Cross, with money and blood, when they needed help, the Red Cross turned their back on the community.

This isn't the first time I've heard this. This is now the third time, that in a state of emergency, I have learned that the Red Cross refused aid. My husband told me that Red Cross did this in his community many years ago. They didn't exactly refuse aid - the Red Cross CHARGED the victims for all the supplies and help! Talk about appalling!

A journalist I spoke to this week confirm this behavior. He said that when he was in the military, the Red Cross brought donuts to the troops - then charged them for the donuts!

In Castaic, the churches helped out and raised money and found homes for these people. In Chico, years ago, the same thing had to happen.

It seems that the Red Cross doesn't really behave likea charity, at least not in this country. They charge for their CPR books and courses, the blood they provide, the supplies and aid they give...sounds more like a business to me. And folks, I donate funds to a business that masquerades as a charity.

So, if you're wondering why I've removed the Red CrossTsunami contribution link...that's why.
However, any contributions you DO make before the end of this month can still be deducted on your 2004 taxreturn. So if you need to cut your taxes for last year and want to help people...please contribute NOW.

Friday, January 14, 2005

Get a Clue Time

Speaking of the floods and landslides in California and elsewhere in the USA this winter, many people have faced inconsolable tragedies - lost loved onesand lost or destroyed homes.

While my heart goes out to you - I am also furiouswith you for putting yourselves into that position.
On the news, I hear nany people screaming that they warned their local or state government about these dangers near their homes. I saw one group, in La Conchita, yelling at Governor Arnold, blaming him for not having shored up the hillside above their homes.

Hey folks, wake up!

If you can't get any insurance coverage from any carrier AND you can't get any lenders to lend you money against those homes - doesn't that tell you it's too dangerous to live there?

It's not the government's responsibility to support your decision to live in a dangerous area. It's not up to your fellow taxpayers around the state or country to help fund your right to live in a lovely, but dangerous place,next to the ocean, that many taxpayers can't even afford to visit.

If you want to live in places like that - it's up to YOU and the members of YOUR community tofind or raise the funds to make it safe.

Why I am so furious with people like this?

It's not just the financial cost.
It's the fact that their decision has cost the lives of people they love.
Those deaths could have been prevented.

It was a choice.

Isn't it time to take responsibility for ourown actions? And to prevent needless deaths?

With love,

Your TaxMom.

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