Sunday, February 12, 2006

Don’t Be Afraid to Use Your Credit Card When Dining Out In A Group

Author: Nick
Category: Money
Topics: ,

How many times in your life have you gone out to a restaurant with a group of people–say, four or more–and when it comes time to pay the check, everyone throws some cash on the table. Whether everyone pays for their own food or the bill gets split evenly among everyone, a group meal typically results in a big pile of assorted bills.

If you’re like me, you don’t usually carry a lot of cash in your wallet. When you eat out alone or with one other person, you use your credit card, especially if it’s a reward card that you pay off every month. But when you’ll be going out with several friends or co-workers, you might make a quick trip to the ATM on the way so you can contribute to that pile of cash that inevitably forms at the end of the meal.

Of course, you could pay for your part of the meal with a credit card; but when everyone else is flashing the green stuff, you may feel compelled to do the same. Is it the peer pressure? Is it because of the stigma that comes with being a “credit card user?” Whatever the reason you might have to keep the credit card in your wallet, it’s a bad one. With reward cards like the Citi Professional MasterCard that give 3% back on restaurant transactions and tons of other cards that offer 1% cash back on everything, paying cash at a restaurant is like paying extra sales tax. So forget what other people may think when you break out the plastic to pay for your food. (Oh, and watch out for people who might short-change the pot–there’s one at every company.)

While you’ve got that credit card out, why not put everyone’s bill on it? Just say you don’t have the cash on you and offer to “simplify” things by using your reward credit card to pay the bill. If everyone agrees, pocket that pile of bills on the table and think to yourself that you’ll be getting a percent back of the total bill.

Consider this example. Say you and nine of your friends go out to eat and the final bill is $100 including tip. If your part of the bill is $10 and you use a 3% cash back reward card, you’ll make three bucks if you take the cash pile and put the whole thing on your card. In essence, you’re getting 30% off your own meal. Heck, if you’re really daring and don’t embarrass easily, why not go from table to table at the restaurant offering the same service to unwitting cash-payers?

Now what do you think would happen if a bunch of personal finance bloggers got together at a restaurant? Once thing’s for sure: you would be able to hear the sound of plastic hitting table from outer space.

Tuesday, February 7, 2006

Inside My Wallet: Please Please Please Be A Million Dollars … Dang

Author: Nick
Category: Money

It’s been a popular topic as of late, so I figure it might be amusing to explore the contents of my own wallet. Or, if not amusing, then at least incredibly boring.

In the billfold

  • $16 in cash. Two fives, six ones.
  • Receipts. Both for credit card purchases. One is for gasoline (thought I had lost this one). The other is for dinner last Saturday–Cheeburger Cheeburger; I ate the 20 oz. burger and got my picture up on the wall. I still feel it in my stomach.

In the card slots

  • Credit cards. I just keep my Citi Shell MasterCard and Bank of America Visa on me.
  • Club cards. Safeway and Giant at the front since they get used the most. Sam’s Club and Super Fresh are in there, too. I’ll probably ditch them both since there is no Super Fresh around where we moved and I don’t intend to renew the Sam’s Club membership.
  • Gift cards. I think all of them only have a few bucks left on them. Two for Target, one for Outback Steakhouse, and one for Bed Bath & Beyond. There’s also a Dave & Buster’s game card with a few bucks left on it.
  • Metro farecards. Two of them. Each has 30 cents left on it. They’re from our recent day trip to Washington, D.C. They’ll get used soon enough, I’m sure.
  • Movie theater cards. One for United Artists, the other for AMC. You’re supposed to get free popcorns and drinks if you use them a bunch of times. I don’t think we’ve ever gotten anything like that, but we rarely go to movie theaters anyway.
  • Insurance cards. Optimum Choice for medical, EyeMed for vision, and Delta Dental for toothy goodness. Had two cards for GEICO; one was expired so I just threw it away.

In the picture holders

  • Driver’s license and change of address card. I look really angry in my license picture. Oh, maybe it was the three-hour wait!
  • Pictures of Tegan. Five of them, though I just noticed none of them are from the last few years. I’ve got the first one I ever took of her, another in her cute little blue swimsuit that’s my favorite, two of her in dresses at various dances (one from before I even knew her) and the last of her wearing a blue wig. No wedding picture!!! I need to correct that!

I should note that I did clean out my wallet a few months ago. It was much worse back then–lots of little scraps of paper with outdated information, expired cards of all sorts, and even a picture of an ex-girlfriend (oops!).

It’s probably also worth mentioning that I’m one of the few people I know who carries his wallet in his front pocket instead of the back. It’s easier to secure that way (now pickpocketers just grope my butt) and I don’t have to sit on it all day.

Maybe I’ll take an inventory of Tegan’s wallet. I just can’t let her find out about it until I’m done!

Saturday, February 4, 2006

Tax Return Time: It’s Like the Exact Opposite of Christmas

Author: Nick
Category: Money
Topics: ,

With all of the necessary W-2s and 1099s and NCC-1701-Ds finally in my documentation bucket, I sat down last night and this afternoon to set them all on fire. Then, with the documents that refused to burn, I did my federal and state tax returns. What follows is the sad tale of a young couple, some tax software, and three bottles of inexpensive wine.

Chapter The First: Preparations For Battle

The last of six needed tax documents arrived in the mail on Monday. It was my 1099-INT from Bank of America. At first, I wondered why they were sending me one since I had just opened accounts with them in November and had earned a total of 13 cents interest with them. “Don’t forget that $50 account opening bonus,” the 1099-INT politely reminded me. I told the 1099 where it could go, but it stayed on my desk instead.

The other documents had arrived in weeks previous and included…

  • My W-2. I elected to receive my W-2 electronically, so it was available online by mid-January. Just under $58,000 in wages. The federal government had already taken $10,000 of that, and Maryland snatched up $4,000.
  • Tegan’s W-2. These arrived next-to-last. Since she had just started at the end of the year, her wages totaled just $1,300 and her taxes withheld were minimal.
  • ING Direct 1099. Yup, got a $50 bonus from them, too.
  • Wachovia 1099. I need to close these accounts sometime. They paid me just over $100 in interest. Had my deposits been in ING or Emigrant the entire year, that amount would have been about seven times higher.
  • Tegan’s Tuition 1098-T. Say that three times fast. Tegan returned to school a couple weeks ago, but since her tuition was paid in December, we could count it in our 2005 tax credits. This 1098-T quickly became my favorite tax document.

Even though the majority of our savings were in Emigrant Direct, they only got to ED in November and December and didn’t quite make the interest needed to generate a 1099.

Chapter The Second: Attack of the Federal Government

I had already downloaded the 2005 edition of the awesomest tax software in the world: TaxACT. While downloading TaxACT, I was aware that H&R Block’s TaxCut software was also available for free download. I chose to stick with TaxACT because I had already used it in 2004 and 2003.

Even though I downloaded it back in December, I waited to install TaxACT until yesterday. The installation process was painless, and I had the program up and running in no time. To start, it asked some basic questions and queried me as to whether I had data from TaxACT 2004. I did, somewhere on a backup DVD, but since the only thing that hadn’t changed from last year was my name and social security number, I decided to start fresh.

The TaxACT interface was unchanged from previous years, but there were many more annoying “upgrade to a more betterer version of TaxACT for $12” interludes between steps. While $12 would get me a Maryland tax return and e-file without any extra work, I declined each time is was offered because I wasn’t about to pay for something I could do for free.

I entered our W-2s and 1099s and Tegan’s 1098-T fairly quickly, though copying exact numbers from the paper forms was a bit tedious. With wages and interest, our adjusted gross income came to about $59,000. Some magical calculations later, I saw the first sign of my anticipated refund in the corner of TaxACT’s window: $4,900. I kicked myself a few times for giving the government such a lovely interest-free loan and promised to update my W-4s soon. I took the Hope credit for Tegan’s tuition which allowed me to credit all $700 right from the taxes we owed. So that $4,900 turned into $5,600 just like that. We can take the Hope credit one more time for 2006 and then we’ll be stuck with that crappy Lifetime Learning credit that only takes 20% of her tuition away from our taxes.

TaxACT then freaked out a bit. It detected that it was out-of-date, closed itself down, downloaded the latest version, installed it … and then stayed closed. Why it didn’t do all this when I first started it, I don’t know. I manually restarted the program and found that it hadn’t discarded the data I just finished entering, so I continued from where I left off.

Unlike last year, TaxACT had the option built-in to e-file our Federal return for free. I did so and gave it our bank account number for direct deposit. TaxACT kindly told me I’d be getting a couple of e-mails in the next several days letting me know how things go and that I’d need to send in a paper 8453-OL (Tax Document Permitting the IRS to E-Molest You). TaxACT then tempted me with a preview of our Maryland tax return like it always does. I printed a copy of our 1040, backed up the Federal data, and told TaxACT to take a hike.

Time to complete, from installation to filing: about an hour.

The Final Chapter: Wishing I Lived in Florida

The reason I turned down that $12 TaxACT offer to handle my state return: Maryland’s free iFile. Not content to begin with a pedestrian letter like “e,” Maryland’s iFile is a simple but thorough substitute for Form 502. Like every year, I had to try a few times to remember my password, but once I got it right, all my basic information from last year automatically appeared. Unfortunately most of the data was wrong wrong wrong, so I put in the new address, phone numbers, and wife. It then prompted me for our Federal adjusted gross income and data from our W-2s. A few minutes later, it spit out our taxes owed and told me we’d be getting back $400. A little better than the $5,600 I had given to Uncle Sam, I thought. But when I noticed that our county tax was almost 60% of our state tax amount, I almost cried. I guess that’s why Montgomery County is so much nicer than Baltimore County; we pay more for it.

A few button-pushes and some direct deposit information later, the return was sent to some guy in Annapolis who probably makes $10 an hour to push a button granting refunds. I had some trouble printing out a copy of the Form 502 because the PDF version didn’t want to download. Fortunately the “text” version wasn’t just plain text and looked just like the real Form 502 in full HTML. I printed off a PDF copy of it and shoved it in a folder with the dozen or so other PDFs I had generated.

Time to iComplete: 30 minutes on the button.


So we have about $6,000 heading our way, and that $6,000 will soon be sitting in our just-opened HSBC savings account earning 4.80% until the end of April. Next on my tax to-do list is updating those W-4s so not quite so much is taken out this year. Granted, we’ll be earning quite a bit more in interest this year and paying more in tuition, so I’ll have to take all that into account.

That refund still irks me a bit. Some people might love getting a $6,000 tax refund; me, I see that as about $200 in interest we missed out on. I thought about making that $200 up by eating sticks and slugs for a few weeks, but then Tegan made a yummy cake and I forgot all about it. Even typing this right now isn’t enough to remind me.

And I’ll probably forget to update my W-4, too … especially once I get to those three bottles of wine.