Monday, March 31, 2008

Why In Blazes Are You People Buying This Crap on

Author: Nick
Category: Money
Topics: ,

comic 7 - online shopping

It’s no secret that I make a few bucks off running Punny Money. Most of it comes through unobtrusive means that nobody really objects to, like advertising and stealing your bank account information. But there is one slightly evil way that many websites, including this one, line their e-pockets with iGold—affiliate marketing.

Webster’s defines affiliate marketing as “scamming silly internet people into buying all sorts of worthless garbage so that you can make a few extra pennies while helping to drive the country into the poorhouse.” It’s really simple to set up, and today I’m going to share the secrets of affiliate marketing with you:

  1. Get a website. There are websites on the internet. They are sort of like carrots in a field; you harvest one, but you add your own spices before you serve it. Unlike carrots, however, orange websites are not very popular.
  2. Sign up for an affiliate marketer thingy. There are a lot of affiliate marketing services around. We’ll talk about one in particular in a minute.
  3. Retire. Congratulations! You just made 50 million dollars with no work.

I may have left out a step and any sense of reality, but you get the picture.

The only affiliate marketing program you’ll find on Punny Money belongs to, seller of virtually anything that can be shipped in little brown packages. Amazon’s affiliate program lets you link to its products catalog, and every time someone makes a purchase from through one of your links, you’ll receive a small commission. For example, if you purchase this $400 needlepoint kit, I’ll make $16. But that $16 of mine comes at a grave price—your $400. Sure, you get a lovely needlepoint kit, but it’s really not lovely at all—it’s $400 you don’t have anymore. Now Amazon has $386, I have $16, and you have a needlepoint kit you’ll work on for a few hours and then throw in the closet.

Amazon also lets you sell its products with fancy 21st-century internet picture links like the one you see on the right for its top-selling Badonkadonk Land Cruiser Tank. If you had a website and your visitors bought just 25 of these babies, you’d have enough money to buy all sorts of stuff, like a better life for your family or a Badonkadonk Land Cruiser Tank.

Partly because I don’t want the monetary basis of this website to influence its content, and partly because I feel a bit guilty trying to con random internet people into buying stuff, I don’t really use that many Amazon affiliate links around here. In fact, I’ve only used them two or three times in the last year and about a dozen times total during the entire life of Punny Money. But since lots of visitors to this website arrive here through links to older articles, there are still plenty of people who end up clicking through those rare Amazon affiliate links, and occasionally someone will make a purchase. Sadly, nobody’s ponied up for a Badonkadonk Land Cruiser Tank, but I’ve referred plenty of other sales for smaller items.

The best thing about Amazon affiliate links is that, even if someone clicks through your link for a Badonkadonk Land Cruiser Tank and they end up wandering around and buying a $400 needlepoint kit instead, you still get credit. In fact, about 90% of the product sales I’ve referred have been for items to which I’ve never linked. For instance, when I linked to this Toro Electric Leaf Blower/Vac (an item I actually own and love and highly recommend), two people bought the blower/vac, but someone else bought a cordless drill instead because it was featured as a “recommended item” on the same page as the blower/vac.

Remember when I said that 90% of my sales are for items I didn’t suggest myself? No? I just said it in the last paragraph. Are you skimming articles again??? Anyway, since Amazon provides detailed reports on every single item someone purchases from my referral account, I can see just what you crazy people are buying (but don’t worry, I can’t tell who’s buying what). And I have to say, you guys are buying some weird stuff. Here’s just a sample of the wacky crap that people have bought from who visited via Punny Money over the years.

High School Musical 2 (Extended Edition) Not satisfied with the regular, unextended edition of this movie, somebody shelled out 16 bucks to see a bunch of high school kids dance around and sing about serious issues like why Disney is stomping on Walt’s grave with crappy sequel after crappy sequel. I made 96 cents!

Seventh Generation Baby Wipes Refills, Chlorine Free and Unscented, 80-Count Packs (Pack of 12) (960 Wipes) What ever happened to the old days when people would just take their babies out back and hose them down after a diaper change? At least the person who purchased this product is giving some consideration to the environment as it is made only from natural ingredients like Polysorbate 20, tocopherol acetate, and other things with totally natural-sounding names. Now baby will be clean and less toxic than the other children on the playground.

Motomco #33475 Black Rodent Station Great, now I’m an accessory to animal murder, even if it is of the creepy crawly hairy variety. At least I can rest at night knowing that the purchaser got a pretty good deal on this—and I even managed to make 46 cents in the process.

Lg Chocolate Vx8500 Chocolate, Vx9900 Env, Vx8600, Ax8600, Lx150, Vx9400, Vx8700, Ax275, Vx8550, Vx8350, Rumor, Cu575 Trax, Lx160, Lx570 Muziq, Vx5400, Vx8800 Venus, Cu515, CU720 Shine Accessory Bundle Kit- Rapid Car Charger with Ic Chip + USB Data Cable I’m not even sure what this is. From the title, it’s either cell phone accessories, candy, or a hard math problem. Strangely enough, Amazon sells all three.

25 Opera Favorites I guess I shouldn’t say anything bad about opera music or I’ll come off as an uncultured jerk. Still, five bucks would’ve made for a great down payment on a Badonkadonk Land Cruiser Tank.

Shen Min Advanced Formula for Woman, 60 Tabs Apparently this product features “vital co-factor hair growth nutrients” which is industry code for “easy money from bald people.” Sadly, if my hairline and heredity have their way, I’ll one day be joining the ranks of the shiny-domes; but I’ll be employing a much more practical measure to deal with it—traffic cones hats.

Hopefully my exposé of people’s bizarre Amazon purchases won’t discourage you from shopping there in the future. And if you’re planning to take a stroll over there anytime soon—say, to pick up a Badonkadonk Land Cruiser Tank with your massive tax refund or rebate—don’t hesitate to do so through one of the many blatant affiliate links scattered throughout this article.

This post sponsored by the Badonkadonk Land Cruiser Tank: the most fun you can have driving around the desert of a foreign planet for under $20,000.

Thursday, March 27, 2008

Attention Bored Rich People: I Will Do Any of the Following For One Million Dollars

Author: Nick
Category: Money

comic 6 - if i had a million dollars

One day I hope to be rich enough to be able to pay people ridiculous sums of money to do really stupid stuff—like run around New York City for three hours with a cat in their pants, or paint their house 27 of the ugliest paint colors available.

Unfortunately I am not rich at the moment, but I’m hoping to change that right now. You see, I’ve decided it’s time to claim my 15 minutes of fame on the internet by offering myself up to one lucky, really bored person with a lot of money. Now before you all whip out your checkbooks, I should clarify that this “offering up” is not in a sexual way. Instead, I would be willing to perform any of the totally insane items from the list below for the paltry sum of one million dollars.

As you will soon see, giving me one million dollars will be a bargain to get me to do some of the wacky, crazy things I am offering to do. But if you’ve got lots of millions sitting in the bank and you don’t mind letting go of just one of them, then you can buy yourself some of the purest, most amazing entertainment you’ll ever find in your whole life, featuring yours truly!

Since I don’t know any super-rich people who would be willing to do this, I’m going to rely on you, the Punny Money reading audience, to help connect me with somebody out there who has lots of cash and a strong desire to make other human beings do very strange and/or fantastic things. To that end, if a rich person contacts me to perform one of these actions, and I perform it, and I get paid one million dollars, I will gladly give a 25% finder’s fee to whomever my benefactor says brought him or her to me. For example, if you submit this article to some social media websites or post it on your blog and Bill Gates pays me a million bucks because he saw one of your submissions or articles, you’ll get $250,000. Or if you live next door to an old oil tycoon that you convince to fund my little endeavor, you’ll get $250,000. So call every rich person you know and tell them that Nick is ready to do retarded things for money.

The conditions for this transaction are simple:

  1. Contact me by e-mail with the subject line “I Will Pay You One Million Dollars To Do My Bidding.” Let me know who you are and which of the things from the list below you’d like me to do.
  2. Once I reply to you, you’ll need to provide verification of your riches. Sorry, no freebies!
  3. We’ll have an attorney of my choosing draw up a legally binding contract saying you’ll give me $1 million if I do X and I’ll get nothing if I don’t do X.
  4. Costs prior to the action will be paid by you, including the attorney in #3 as well as any travel-related fees if you want to come see me in person or you want me to fly out to meet you.
  5. Costs related to performing the action will be paid by me, even if I chicken out halfway through the action, which I won’t do because you’re paying me one million freaking dollars.

All right! Are you ready to see the list of really bizarre, disturbing, or just plain entertaining things I’m willing to do for one million dollars? Okay then, here it is:

  • Speak to any group, on any subject, anywhere, anytime. Put my oratory skills to the test for your entertainment as I deliver a talk to any assembly of people of any size on any topic you choose. I may not be an expert on a lot of subjects, but if you want me to speak about the future of space exploration to your ninth-grade class, I’ll do that. Or if you want me to discuss 21st century sexual positions with your church congregation, I’m game for that too. You can even invite your group to bring tomatoes and other soft foods for throwing should my speech be met with any dissatisfaction.
  • Your own personal protester. Are you angry at a company, government agency, or your next-door neighbor, but you just don’t have the time to stand outside their office or home with a picket sign for eight hours a day? Then hire me to do it for you! I’ll march outside the publicly-accessible location of your choosing with a sign held high to let those people know that you’re mad as hell and you’re not gonna take any more of their animal cruelty, unjustified wars, poorly-written operating system software, or whatever else you want me to protest. Just one million dollars will get you your own private protest army of one for 90 straight days, 10 hours each day. I can’t promise you they’ll change their evil ways, but I’ll do my best to be loud enough to at least get you on page 3 of your local PennySaver.
  • Move to anywhere for a year. Perhaps you think it would be interesting if I lived in the ghettoest neighborhood of Baltimore for 52 weeks. Or maybe you want to see me survive a harsh Icelandic winter. Or you’d like me to try to get through a year in a poor, impoverished nation like the ones you see in those commercials that make you feel bad for not sending just 10 cents a day to those starving children. Or, perhaps worst of all, you could sentence me to live in a Wal-Mart for a year just like Natalie Portman did in that one movie. I’ll go for any of those as long as I can bring my wife, lots of guns (especially if it’s Baltimore), and the largest sack of food you’ve ever seen. You can even watch me suffer via webcam 24/7.
  • Babysit your children anytime you want. Believe it or not, I’m actually very good with kids, and children tend to be fascinated by me. For just a million dollars, I will be your permanent babysitter for up to three children (the fourth and beyond cost $10/hour each) anytime you want from now until they turn 18. A few conditions: no kids under 3 years old; pre-existing children only; and you must give 24 hours notice when you need me to babysit. Price includes me moving to your neighborhood so I’m always just a stone’s throw away. What a bargain!
  • Perform a one-man show of any movie. Just give me a few months to memorize the script, buy some props, and put together some rudimentary sets and scenery, and you’ll have yourself a private reenactment of your favorite film (up to three hours in length) starring me! I’ll do any movie (uh, nothing NC-17 though), but I would suggest some of my favorites: Star Trek II: The Wrath of Khan, Forrest Gump, or any of the first four Rocky movies. Yo Adrian, give me a million dollars!
  • Use me for target practice. Take out the frustration of running your multi-million-dollar empire by unleashing a storm of high-speed tennis balls at me. Play a game of “hit the Nick with a 85-mile-per-hour tennis ball machine” once a week, up to an hour at a time, for an entire year. I’m allowed to move around, and I get a helmet and other protective gear; but I’m not that fast, so you’ll get in plenty of hits and get to hear me scream like a girl each time. Price includes the tennis ball launcher (a $4,000 value) which is yours to keep in case you decide to pay someone else to do this after you’re done with me.
  • Legally change my name to “[Your Name] Presents: Nick.” Assuming the courts let me get away with this one, which they better—free speech and all that—I shall forever be known as, well, I just said it, but insert your name where it says “[Your Name].” People will still call me Nick for short, but if anyone ever asks for my full name, I will give it as “John Smith Presents: Nick,” assuming of course that your name is John Smith. No company or product names, please; I’ll only whore my good name out so far. Also, no fair temporarily changing your own name to something like “Boobieface McFatty” and then changing it back after I adopt it as part of mine.
  • Watch me eat 15,000 calories in one sitting. It’s no secret that I’m a big fan of large amounts of food, but even I haven’t tried to eat 10,000 calories worth of food at a time, much less 15,000. If watching someone make a total obscene pig out of himself will put a smile on your face, then whip out your checkbook because I’m your man. I get to pick the food, but you don’t pay a penny if I don’t manage to eat 15,000 calories in less than four hours.
  • Infinite sandwiches for a year. If I already had a million dollars, this is the first thing I’d buy. With this package, I’ll move to within a five-minute drive of you and will come over whenever you call (even if it’s at 3am) to fix you the sandwich of your choosing. Included in the price is the first $100,000 worth of sandwich ingredients. The only condition is that you have to eat the whole sandwich while I watch (no food wasters!). I’ll even fix sandwiches for everyone in your family at no extra charge. So if you can eat 20 sandwiches a day, I will come over 20 times a day and fix you a sandwich… a sandwich filled with my love… my love for a million dollars, that is.
  • Or choose your own event! I’m open to considering any proposals for things you’d like me to do, so long as they’re not highly illegal and you’ve got the million bucks to pay for it. So let your imagination run wild!

I will also gladly perform any of the above actions naked or in a woman’s dress at no extra charge if you so desire.

I’m sure I’ll have offers coming in left and right for this, so all you multi-millionaires out there better get cracking if you want to be considered because I’m only doing this once. Serious offers only!

And don’t worry, I’ll still keep writing Punny Money even after I get my million because, well, a million dollars just doesn’t buy you that much these days.

Tuesday, March 25, 2008

The Top 10 Things You Should Do With Your Tax Refund or Rebate

Author: Nick
Category: Money
Topics: , ,

comic 5 - how americans spend their tax refund

It can be very tempting, even for a cheap-skate savings freak like me, to blow that massive tax refund or economic stimulus rebate on stupid crap. Sadly, that’s just what millions of Americans are doing this time of year when those big checks come rolling in from the IRS.

But for those of you out who aren’t content with merely saving that four-figure tax refund for the future, there are several less idiotic ways you can spend that money and derive both an immediate satisfaction payoff and long-term benefits. Here’s a look at some of those ways, starting with the most least stupidest.

  1. Save it anyway, dingus. Okay, I’ll make a deal with you. Even though this is supposed to be a list of smart ways to spend tax refunds, I’m still gonna top the list with saving it. But on the flip side, everything else on the list will be pure spending. So this item includes every possible way to save your money including long-term savings, retirement savings, emergency savings, investing, paying down debt, and sticking it under your mattress.
  2. Start a home-based business. If you’ve been itching to start a part-time business in that empty room upstairs but the only thing keeping you from doing it is the startup cost, devoting some of your tax return to getting it going can pay off big down the road.
  3. Make money-saving home improvements. Switching to new, energy-efficient windows is a smart home improvement that can pay for itself over time. Having your toilet bronzed—not so smart.
  4. Fix your car. Bad idea: using your tax refund to buy a new car you can’t afford. Good idea: using your tax refund to fix your existing car so you don’t have to buy a new one for a while.
  5. Get cultured. Grab yourself some tickets to a Broadway show, a symphony, or something else entertaining and sophisticated. Or make the trek to Burning Man. Totally your call.
  6. Invest in your health. There are a variety of small purchases you can make that won’t necessarily exhaust your whole refund but will help your body and mind in the long run. For example, if you sleep on a bed of straw, upgrade to a decent mattress. Or if your jagged teeth are digging into your brain, go to the dentist. Or if your last vacation was that weekend you spent in jail in Vegas, go on a mini-getaway to a nearby destination to recharge your internal batteries.
  7. After much consideration, purchase entertainment equipment with long-lasting appeal. This does not necessarily mean to rush out the door and buy the first giant TV you see. Nor does it mean to buy a 12-speaker, surround-sound, sub-woofing, flux-capacitator sound system. It does, however, mean to buy a Nintendo Wii because it is awesome and everyone should have one, even homeless people. Which leads me to the next item…
  8. Give it away. Handing a chunk of your refund or rebate to a worthy charity will not only help someone who might not be getting a refund this year, but it’ll also make you feel really good. And don’t forget to take the tax deduction on next year’s return.
  9. Stock the cupboards. Over the course of a few weeks, keep an eye out for incredible bargains at your local supermarket—sales that are designed to draw you into the store to get you to buy other stuff. Then go buy only those bargains… in enormous quantities. Cereal 10 for $10? Buy 100 boxes! Steak for $2 a pound? Buy the cow! You’ll save money as well as time you won’t have to spend looking for deals on those items for a while. Just make sure your family can consume what you buy before it goes bad.
  10. And for the eternally single folks out there who, through no fault of their own (*cough*incredible-unattractiveness*cough*), have not found the right person for them, I have just two words: Russian brides. This works for the ladies too; simply request one of the “strong, big-boned” types.

Monday, March 24, 2008

Nick’s Adventures in Tax Land, 2007 Edition

Author: Nick
Category: Money

comic 4 - tax telepathy

After an adventure-filled first quarter of the year full of Wii hunting, economic stimulation, and financial apocalypses, it was finally time to sit down this weekend and sort out my tax situation for 2007.

For the last few years, tax time has been pretty much the same picture: do them the first week in February, go the cheap route and pay $0 for Tax Act’s software, and have my painfully large refunds in the bank in time to bet it all on Duke in the Final Four. And yet here it is, the last week of March, and I’m just now getting around to filing my taxes for 2007. Was it clever strategy on my part, designed to lull the IRS into a moment of weakness so I can sneak in my deductions for gold-plated toilet paper? Or was I just a lazy bum who just didn’t want to dig through that shoe box full of receipts which was at least 10 times bigger than before this year?

A little from Column A, a little from Column B.

Unfortunately, as I found out rather quickly, going with el cheapo Tax Act wasn’t going to cut it for Nick Tax Year 2007. That’s because, believe it or not, I somehow made money from operating this and other websites. And as I quickly discovered, America’s tax system rewards you for your entrepreneurial efforts by burying you in 86 pages of tax paperwork. While there are business versions of Tax Act, I couldn’t tell if I should get the 1065, 1120, or 1120S package. On the other hand, Intuit (the makers of Quicken, to which I am a slave for life) sells a Home and Business Edition of TurboTax which very clearly spells out that it’s for me because I have (1) a home, and (2) a business. Home and Business. Very nice. If only everything were that simple.

Of course, simplicity has a price, and this time it cost $61.99 to download the tax software I needed, whereas the non-business edition of TurboTax that normal people will want to use only costs $40. So you better believe that, come next year, I’ll be deducting $21 for the business portion of my 2007 tax return. (Crap, now I have to haul out my expenses spreadsheet just to enter that. One second…)

So for those of you still undecided as to how you will file your taxes this year, or if you’re just really bored, or if you’re hoping I’ll use exact figures so you’ll find out just how much I make for writing crap like this, here’s a quick little recap of how things went down during my Adventures in Tax Land.

Welcome to TurboTax, Now Take Off Your Clothes

It took me a good day to sort through my shoe box of receipts to separate the business, education, charity, and volunteering receipts (that’s what I get for being a slob the other 364 days of the year). I also downloaded a lot of 1099s and other files that were available online and organized them into folders on my computer like you see below.

my tax folders

Installing and loading TurboTax Home and Business was as easy as deducting prostitute expenses on a gubernatorial tax return. I was expecting to have to enter a lot of personal and prior-year information, but TurboTax rather surprisingly located and imported my tax file from last year—the one from Tax Act, its competitor! Kinda freaky if you ask me, but it only got freakier later.

Skipping ahead a bit, TurboTax also imported my W-2 from who-knows-where, and it even offered to scour through Quicken to locate possible tax deductions. I passed on that offer as well as a later offer by TurboTax to automatically download information from my banks. Sure, it could’ve saved me from having to enter that data manually, but all of this automation was making me feel a little naked. After putting on some pants, I proceeded to the next section.

Fun Fact: Internet Publishing is the Same IRS Business Code as Atlas Makers

TurboTax directed me to complete my business tax return first—something I thought was a little weird, but it ended up being the right choice in the end. It guided me through a series of expense and income calculations in the classic question and answer format. I had expected the business part of my taxes to be long and painful, but it turned out to be relatively straightforward.

Of the five business income and expense categories, I only had to fill out items in the first, Business Income and Expenses, which turned out to be just a fancy interface for inputing the IRS Schedule C and my various 1099-MISCs.

turbotax business screenshot

TurboTax and other tax software regularly advertise that they can help you find deductions you wouldn’t normally spot. I was hoping TurboTax could find some bizarre tax laws to let me deduct my ceramic rooster collection as a business expense; alas, deductions for rooster collecting are limited to porcelain only. In the end, I did save a good bit of money with deductions for things like:

  • My home office (a room upstairs I use exclusively for business work). You can deduct all sorts of regular home expenses—utilities, whole-house repairs, homeowners insurance, and some other things—based on the percentage of your home that is used only for business. TurboTax walked me through calculating the area of my home office and determined it to be about 9% of the total area of our house. This ended up saving me a ton on business taxes, so I’m glad I put that tiny room upstairs to good use.
  • Business startup fees. I started a Limited Liability Company (LLC) for this and several other websites last year, and Maryland charged me $150 for the honor. Every penny was deductible as a business expense.
  • Web hosting. This is the only expense for a lot of personal finance writers I know, but it didn’t turn out to be that big of a deal to me. Still, it saved me about $30 in taxes.
  • P.O. box. Boy are these things expensive, but at least I recouped some of the cost at tax time.
  • Various other small expenses. Legal fees, subcontractor expenses (from back when I experimented with paying writers), and some light travel for business purposes rounded out my business deductions.

About thirty minutes later and a few offers to “purchase QuickBooks to make your taxes easier next year” later, TurboTax displayed a number in red letting me know I owed some tax money for my business. Since I didn’t file quarterly taxes like many business owners do, this didn’t come as a surprise. But I purposely didn’t file quarterly taxes in 2007 due to various complicated tax rules that I half-understood then and 3/4-understand now. I finished the business part of my tax return hoping that the personal side would cancel out that red number (but not by much! no tax-free loans to no gubberment from Nick!) so I didn’t have to write my first check ever to the IRS.

Personal Taxes: The Hard Part

The fact that TurboTax has eight categories for personal income…

turbotax personal screenshot

…and ten for deductions…

turbotax personal deductions screenshot

…(versus just five categories for business income and expenses) just goes to show you how screwed up U.S. tax law is. It also took me three times longer to complete the personal section than the business section. And while the business component of TurboTax was nothing short of awesome, I had several gripes with the personal part.

For one, the donations section is more a commercial for Intuit’s ItsDeductible service than it is useful for calculating your charitable contributions. This section did not address a huge deduction area for me: expenses incurred while performing volunteer work for a qualified organization. I had to look up tax law and IRS publications myself to determine what part of TurboTax I should squeeze these numbers into.

Another big problem area for me: I received a corrected W-2 form from my employer after I uncovered a big error on its part, but TurboTax’s way of letting you input the changed values is simply to run you through the whole W-2 input process from start to finish again. This wasted a good amount of time I could’ve saved if TurboTax simply presented a checklist from which I could choose the one or two values that needed to be corrected.

Perhaps most importantly to me was the Educational Expenses section which I was accustomed to being very simple to complete from my experience with Tax Act. TurboTax presented it in a completely bass-ackwards manner that forced me to double-check my own math a few times. It’s important that this part be easy to understand because my wife typically has tuition expenses that translate into a $1,000+ tax credit.

I finally limped away from the personal section, whizzed through a section simply called “Other”—only to be trapped in Retirement Deduction Optimization calculations for another 15 minutes. TurboTax encouraged me to open all sorts of lettered things—IRAs, 401(k)s, and the NAACP—for tax benefits, to which I said “thanks, but no thanks for now.”

What, You Thought You Were Done Spending Money?

I was coming down the final stretch, and only a few obstacles stood in my way.

TurboTax performed its ominous-sounding “error checking,” which makes me wonder what the hell it was doing for the last four hours that it didn’t spot any errors as I was making them. Sure enough, I had two errors: the residency section for my wife and me were blank. Apparently these parts get filled out at the beginning, but I skipped that section because TurboTax imported most of that data from last year’s Tax Act file. I don’t know how TurboTax didn’t conclude automatically that we were Maryland residents seeing as the only state I had referenced in the whole damn return was Maryland. Why can’t you import that, stupid software???

Next TurboTax assessed my audit risk. I suspected it would be high simply due to my business and volunteer tax deductions, but I was pleasantly surprised when TurboTax showed me this:

my audit risk level - irs can bite me, a.k.a. low

To help me feel even better about my audit risk, TurboTax allowed me to download its free Audit Support Center software. I was instructed not to install or run it now; just to put it in a safe place in case I’m ever audited. It’s sort of like a birthday gift someone gives you a few weeks ahead of time, except in this case birthdays are bad.

The state tax component of TurboTax was a breeze. Time to download and install to completion was less than 15 minutes, mostly because TurboTax simply used all of the numbers from my Federal section to complete the Maryland state forms. I did have a few extra questions to answer though, but as soon as I confirmed that I had not received any reparations from Nazi Germany for my experiences during the Holocaust, I was done with the state return.

TurboTax tried to sell me a few more products near the end—professional audit support, tax advice from a real person, and Girl Scout Cookies in the shape of Form 1040. I passed on all of them, but that didn’t mean I was done giving Intuit my money. Indeed, I had to cough up $17.95 for each of the Federal and State returns to file electronically. I could have filed on paper for free, but as I later discovered, I would have needed to print and mail 86 pages of tax documentation. As easy as business taxes were to compute, it apparently takes 53 pieces of paper to do it.

So I gave in to TurboTax’s extortion and paid the $35.90. For comparison purposes, Tax Act charged me nothing to file my Federal return last year and just $7.95 for my state return. When it came time to enter my payment information, TurboTax offered to take its fees out of my tax refund—for about $30 more. Having sat in my chair for four hours, I almost relented because I didn’t feel like getting up. I think Intuit plans this, but I was tired of dirty tricks, so I asked my wife to grab my wallet for me.

Did You Say “Refund?”

Yes, even though I often cry “interest-free loan to the government” on tax refunds (though sometimes I don’t), and even though I adjusted my W-4 numbers again this year, we’re still getting back over $5,000 from Uncle Sam and his Maryland cousin, Aunt Susie. I’m going to have to spend some serious time with my W-4 this week because I’d rather get higher take-home pay now than a refund later. I think.

That $5,000 should hit our bank account in a couple of weeks, and our $1,200 economic stimulus tax rebate shouldn’t be far behind. We’ve decided that the $5,000 will go straight to savings; and after some discussion, my wife and I have agreed to spend all of that $1,200 to help stimulate the economy. We’re not sure yet if that money will go to a vacation, a giant TV, or maybe just barrels of delicious, tax-ridden booze.

Thursday, March 20, 2008

If You Don’t Like The Economy, Just Wait 15 Minutes

Author: Nick
Category: Money

3 - economic news overload

Guess what, everyone? The economy is recovering! Oil is down, the dollar is up, and once-dead stocks are set to come back to life. So start buying houses again, bring your money invested overseas back home, and throw caution to the wind.

Wait wait wait! This just in. The economy is shot to hell again. Stock prices are plummeting, inflation is skyrocketing, and the price of a slice of pizza is soaring. Walk away from your mortgage, trade in your car for a bicycle, and stash your cash under your mattress.

No wait, I take that back…

Depending on where and when you get your financial news, you may get a completely optimistic viewpoint that promises the economy is on the path to recovery—even though it hasn’t officially entered recession or depression or any other unhappy words. But 15 minutes later, that optimism turns to despair and hopelessness as some company somewhere lowers its profit forecast by 3% and takes out half the U.S. economy in the process.

Trying to read the pulse of the economy has gotten a lot harder lately. That’s because, in this age of instant news transmission and media sensationalism, the health of the economy has changed from a day-by-day vital sign to one that is switching directions every few seconds. Just look at this graph of the Dow Jones Industrial Average for the last 38 years. Gone is the relatively flat line of the 1970s and 1980s. In its place is something that looks like a roller coaster built by a crack fiend.

For the typical American consumer, hearing about things like “rampant inflation” and “looming recession” can be very scary, especially if you know what those things actually mean for you. But you shouldn’t worry too much about 99% of the everyday economic news you hear. Here’s a quick guide to scary-sounding financial events you shouldn’t panic over personally:

  • [Insert company name] [bad news goes here]. Yeah, some big companies reporting major losses can have an immediate impact on the economy in general. Fortunately there are lots of big companies out there, so the investors driving most of the big financial news lately will get over it in 10 minutes when another company reports record profits.
  • Unemployment is up. All this means is that across every job field in existence in the whole country, there are slightly fewer people working than before. This doesn’t necessarily mean your job is at risk. If you’re in a high-demand field and you’re a hard worker, you don’t really need to worry if Burger King replaces half its drive-thru workers with robots in India.
  • Stocks are falling. Don’t start checking your 401(k) balance compulsively. And even if it sounds like there are more down days than up, the news just gets louder when the stock market takes a hit.
  • The dollar is at record lows. Unless you and your life savings were planning to move to Europe next month, you shouldn’t worry too much about the falling dollar. Yes, things here might get more expensive faster, but you’ve got 300 million other people alongside you in the same predicament, so it’s not like you’re alone in this.
  • Interest rate are [doing whatever]. Whether it’s the Fed rate, your mortgage rate, or your savings account rate, you shouldn’t panic if 6% turns into 4% turns into 3%. If your high-yield savings account rate drops too low for your tastes, it may be time to start playing the stock market a little more which will probably see gains when the cost of borrowing money declines.

And while there are plenty of economic indicators over which you shouldn’t get in a tizzy, there are a few things you’ll want to watch out for that may have a more direct impact on your financial picture.

  • [Insert YOUR company name] [bad news goes here]. Depending on where you work, your company might not be big enough to make broad financial waves, so you may have to look to closer sources for news on the financial health of your employer. If things look bad, start planning appropriately for potential layoffs and other bad news.
  • Your individual investments are heading downhill. If you’re into dropping large amounts of money on the latest “sure thing,” you’ll need to be much more paranoid than people like me whose only risky investments are index funds.
  • Your direct expenses are going up. Yes, you should be a bit concerned when gasoline prices go up (not crude oil prices; you don’t use raw crude oil for anything). But rather than pacing around the room pulling your hair out, you should think about ways to decrease those expenses (cutting back or switching to a cheaper alternative, for instance) to address such changes.
  • McDonald’s Dollar Menu now costs $1.10. If this ever happens, I will dump my life savings into gold and hide out in the mountains for a few years.