WalletPop

Don't spend my tax dollars to prove the Patriots are cheaters!

Tracy Coenen — 2008-05-15T10:00:00+00:00

The cheating was simple: New England Patriots staff members videotaped the signals of opposing teams. That's not allowed by the National Football League. The team got almost no punishment for their cheating. (A relatively light fine and the loss of a first-round draft pick.) End of story.

Unless you're a United States Senator. Then you must suggest that taxpayer money be spent investigating these football shenanigans. No, I'm not kidding. Senator Arlen Specter says he wants an investigation done because the NFL hasn't done enough about the cheating.

Is he serious? The cheating was bad. The lack of punishment was worse. But it's football, for pete's sake. Are any other teams really complaining? No. (Although I promise you if it was my beloved Green Bay Packers who cheated, we'd never hear the end of it... ever.)

But no one really cares anymore. So just leave it alone. There are plenty of other uses for our tax money. And the fact that there was a huge investigation into steroids in Major League Baseball does not mean that we should throw away more taxpayer money on an essentially meaningless "investigation" of professional football. Next issue of national importance, please.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Economic stimulus anticipation killing small banks

Josh Smith — 2008-05-13T10:30:00+00:00

Filed under: Banks, Tax

As millions of Americans are waiting to see that sweet sweet stimulus rebate appear in their bank accounts, many banks are feeling the pressure. My boss reported that as he was trying to manage his parent's finances last week he couldn't get into the local bank's online service. A phone call later and the problem was revealed to him by a friendly bank employee. The online banking system couldn't handle the repeated refreshes it was getting which could only be attributed to the throngs of people eagerly awaiting their HDTV allowance from the government.

We already received our stimulus package but today as a I tried to check the status of several automatic bill payments I was confronted with an error page. It's not that I don't understand the load that these requests are having on banks, I am just surprised that that many people are refreshing their bank websites in the wait for government cheese. It seems the many economic stimulus sales may be inciting consumers to spend spend spend.

If you haven't received your rebate yet and your social security number's time has come and gone be sure to check out several reasons your rebate may have been delayed. If you don't fit any of those categories and you still haven't received your money and you bank anywhere other than Citi or Chase do me a favor -- WAIT -- don't check your bank account like a meth addict in need of a hit. Some of us have important banking matters to attend to, like seeing if the PayPal transfer for selling my toilet paper roll collection went through!

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Another group of taxpayers surprised by an economic stimulus detail

Tracy Coenen — 2008-05-12T12:00:00+00:00

Filed under: Tax

Last week, fellow WalletPop blogger Julie Tilsner clued everyone in to this little known delay in receiving your economic stimulus money: "If filing or preparation fees were deducted from your 2007 refund, or you received a rapid refund, you will be receiving a check instead of a direct deposit."

Now word is out that a second group of taxpayers will be disappointed: those with spouses who do not have Social Security numbers will not receive any rebate money. The economic stimulus package was set up with this provision to prevent illegal immigrants from getting rebates. And I can't say I disagree much with this detail. While illegal immigrants probably would have put the money into the U.S. economy, it just wouldn't make any sense to give this money to someone who's not in the country legally.

But what about those foreigners who are here legally, and just don't have Social Security numbers? Unfortunately, they aren't eligible for this little perk received by those who do. Even the spouses of those without Social Security numbers won't receive a rebate check if they've filed their taxes jointly.

There are probably about 1 million legal residents of the U.S. who have green cards, but are waiting for paperwork for their spouses. It's hard to know how many others will be affected by this detail. Lawmakers have to continuously balance interests of many people when making their decision. This detail was an unintended consequence, and I think it's a small price to pay in order to make sure those in the country illegally don't benefit.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

What would a gas tax holiday really do for consumers?

Tracy Coenen — 2008-05-09T16:15:00+00:00

Filed under: Tax, Transportation

Presidential candidates Hillary Clinton and John McCain have both floated the idea of a gas tax holiday to "help consumers." Would turning off the federal gas tax for a period of time really help consumers? Or might it actually make our situation at the fuel pumps even worse?

The Roni Deutch Tax Center has a few comments about the issue. Currently the feds take 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel. A gas tax "holiday" would save the average consumer about $30 over three months (but there are varying calculations out there on this). This means consumers could save about $2 to $5 each time they fill up.

But economists say this isn't a good idea. They say that this savings would do next to nothing for consumers. Why? A drop in the price consumers pay would lead to higher demand, which would probably end up pushing up the price of gas. So consumers would be put back in the same position as without the tax holiday.

There's also a complaint that oil companies would make more money on the higher demand and higher consumption. I don't care if the oil companies make more money on gas or not. They're in business to turn a profit and they provide a much needed (and obviously desired) product to us.

What I do care about is the fact that a gas tax "holiday" won't really do anything for consumers anyway. The government needs to get their hands out of our wallets permanently, and that's not going to happen with a three month "holiday" on one tax. The overall tax structure at all levels of government is unfair to consumers and taxes need to be cut across the board. That would be something to get excited about!

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Where's my economic stimulus check?

Julie Tilsner — 2008-05-09T14:00:00+00:00

Filed under: Borrowing, Budgets, Debt, Shopping, Tax, Relationships

I hate sitting by the phone, so to speak, but my mail carrier came and went today and there is no sign of my economic stimulus check.

I was a loud and bitchy critic of the economic stimulus plan from the start. It always seemed more politics than fiscal responsibility (but then when was this Republican administration ever about smaller government and fiscal prudence?). What's $600 going to do for the average debt-burdened consumer? Buy a month of groceries? Notch down one credit card? Yeah, I rolled my eyes and ranted and raved.

And then I figured out that I would be getting $1,800. That's $1,200 for being married and filing jointly, and $300 for each kid. My husband and I looked at each other sheepishly. Then we launched into the Happy Happy, Joy Joy dance.

According to the IRS, I should be receiving this windfall no later than today, May 9. This, I gleaned from the site, because of the last two digits of my Social Security number, the fact that I filed electronically in March and had my return direct deposited into my account.

And so we waited. "You'll probably see it earlier," my husband told me. "There were news reports that the first wave of people got theirs earlier in the week than expected." He then optimistically did his part for the economy by spending his half on a new laptop, since his old one had just died.

"President Bush thanks you for being a good American" I sneered. Then I went out last weekend and let myself get carried away at the mall, spending $160 on clothes I wouldn't otherwise have spent, all because I knew my economic stimulus check was coming the next week to cover me.

But where is the money? As a freelance writer, I'm used to the proverbial "check is in the mail" waiting game. But I also know that radio silence is cause for suspicion. So this morning I went back to the IRS site, and clicked on its tool, "Where's my stimulus payment?" I plugged in my information.

I don't expect much when it comes to forthcoming government information. But hope springs eternal. Alas, up pops this message: Not any information on this taxpayer."

Then I notice this cryptic note, "If filing or preparation fees were deducted from your 2007 refund, or you received a rapid refund, you will be receiving a check instead of a direct deposit."

So...the $30 electronic filing fee I paid Turbo Tax means I won't be getting my money today? That's the first I'd heard of that stipulation. I check the paper check payment schedule.

June 20.

I feel a little like a jilted date. He said he'd call and he didn't. Really, I should know better by now. Monies promised should never be anticipated or waited on. And I'm feeling a little foolish because hey, I thought this was a bad idea to begin with. That didn't stop me from quickly spending more than was in my budget though. I guess that makes me a "better" American than I thought I was.

So have you gotten your stimulus money yet? What are you doing with it. Really...

Ideas for spending your stimulus check:

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Stimulus check sales

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Middle East terrorism: Now fueled by nicotine

Bruce Watson — 2008-05-05T16:00:00+00:00

Filed under: Bargains, Extracurriculars, Shopping, Tax

Emphysema, heart disease, lung cancer, necrosis, crib death, bad smells...smoking has been accused of causing an almost endless list of problems. Recently, however, New York's outrageous taxes have added a fresh one: funding terrorism.

Because of recent tax increases, cigarettes currently cost approximately $9 a pack in New York city. On the other hand, they cost roughly $3 a pack when purchased at Indian reservations on Long Island. For years, New Yorkers have used reservations to help fund their habits by purchasing cartons of cigarettes, either in person or via the internet. The recent tax hike, however, has made cigarette smuggling an easy and relatively safe way to make a lot of money.

According to a recent report, the Bureau of Alcohol, Tobacco, and Firearms is currently investigating over 300 smuggling rings that are purchasing cigarettes from Indian reservations or southern states with lower taxes and reselling them in New York City. Some of these smugglers supposedly have links to Hamas, Hezbollah, and Al Qaeda.

In an opinion piece in the New York Post, Congressman Peter King (R-NY) cited the case of cigarette smuggler Mohamad Hammoud, who allegedly made $8 million from 2000-2002 and donated $100,000 to Hezbollah. Congressman King noted that the operational cost of the 9/11 airstrikes was approximately $500,000, a sum that could be generated with only a few cigarette runs. Of course, from the perspective of international terrorists, this is a win/win situation: if the Camels don't get ya, the fundamentalists will.

While I'm sure that cigarettes will end up bearing the brunt of outrage over this issue, it might be a good idea to look beyond the obvious. Congressman King is calling for a repeal of the "forebearance" that allows Indian reservations to sell cigarettes without charging tax. As a student of history, I feel like we've cheated the Indians enough, but I agree that something must be done about this. May I humbly suggest that we stop using cigarette taxes as a way of dictating our health policy, try to treat smokers like humans and, perhaps, find another way of filling our public coffers?

Bruce Watson is a freelance writer, blogger, and all-around cheapskate. As a former smoker, he doesn't like the smell of cigarettes, but tries to not be a jerk about it!

God wants your tax rebate check

Tracy Coenen — 2008-05-02T16:30:00+00:00

Filed under: Ripoffs and Scams, Tax

According to Pastor Steve Munsey on Trinity Broadcasting Network (TBN) in the clip below, God apparently created "...seed in their hand with their income tax." And apparently we should give that income tax money straight to Pastor Munsey. He says you can "start giving your way out of trouble." Give Pastor Munsey money, get out of trouble. Sounds good to me! Where do I send the check?

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Economic stimulus stimulating lots of fraud

Julie Tilsner — 2008-05-02T10:30:00+00:00

Filed under: Ripoffs and Scams, Tax, Wealth

The economy isn't the only thing getting a (alleged) boost from the government's economic stimulus checks, being sent out to taxpayers beginning this past week. The political windfall is also stimulating a lot of creative fraud as well.

According to story on MarketWatch, scammers are calling and emailing consumers posing as the IRS or the Social Security Administration. The callers tell consumers they need detailed bank account information or Social Security numbers in order to process their economic stimulus checks. Those consumers who fall for the scam and reveal this information are then subject to identity theft.

The story recommends some steps consumers can take to prevent getting so scammed.

Don't ever give out personal information such as bank account numbers, Social Security number or Mother's Maiden name to unsolicited callers.

Keep in mind that the IRS will NEVER call you in regards to the stimulus package. The Social Security Administration is unlikely to call you out of the blue, either. Also, remember that you'll only get a check if you filed a tax return this year.

Don't click on any links in unsolicited emails -- they may take you to a fraudulent site. Fraudsters these days can create very sophisticated websites that look almost like the real thing. Once there, they will prompt you for information. Don't give it out. If you want to go to the actual IRS site, go to www.irs.gov.

If someone calls you and says they're from a government agency, hang up, and call the agency yourself. The FTC keeps a list of government agencies and contact numbers here.

If you filed a tax return this year, be patient -- the check is in the mail, as they say. Wondering when you'll get yours? Check here to find out.

Tell George Bush I have his economic stimulation package... right here

Gary E. Sattler — 2008-05-01T17:30:00+00:00

Filed under: Borrowing, Debt, Shopping, Tax

If George W. Bush wants to do something to stimulate the economy and cement a positive legacy for himself, I have his magic solution right here. If he could get this done, he'd salvage his entire presidency. I'll warn you right up front though, Democrats won't like this idea. So, if you are of the progressive socialist ilk, you may want to move to the next blog post right now. Here's my plan.

If even only temporarily, we need to make the interest charged on consumer debt tax deductible. If I'm not mistaken, didn't they do away with that consumer perk sometime in the mid seventies? If I'm right, and that was part of the old tax code, we should reinstate it immediately. If it's a new and original idea of my own, please leave a dollar in the hat on your way out.

By making consumer credit interest charges tax deductible (again), we'd get an economic triple play. First, consumers would get excited knowing they could finance stuff again, Second, they'd get those interest charges back as tax credits. Third, banks could get a helping hand because consumers might step up their borrowing activity again. The government would just have to bite the bullet and tighten it's belt.

There are only two facets to this plan which would require some serious attention in order to make it work. First, we have a majority of society which needs to be schooled in responsible credit usage. That means we have to teach them how to understand budgeting and what it means to over extend yourself. Second, we need a complete overhaul of the tax code from top to bottom. In fact, the enactment of a "Fair Tax" system might render this entire blog post moot.

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An economic stimulus payment oops...

Tracy Coenen — 2008-05-01T15:30:00+00:00

Filed under: Tax

You're waiting patiently for your money from the now-famous federal economic stimulus package. You're happy, because you'll get your payment a little sooner because you used direct deposit. You're waiting. And waiting.

Oops. You had your 2007 tax refund direct deposited into your retirement account, not a bank account. Now what? You guessed it... Your money for the economic stimulus is also going to be deposited into your retirement account too. This, of course, can create troubles for those who aren't eligible to contribute money to that account or those who didn't want their money to go into the retirement account.

The good news is that you can get your money out of that retirement account with no tax problems. The bad news is that it may take you a little time and effort to do so. This is one of the unfortunate consequences of distributing money in this way.

I, of course, wish these payments wouldn't be going out at all. The government should just reduce taxes for the rich who pay a disproportionate share of the tax bill as it is. This silly redistribution of money through a process that sends a bunch of checks to people who don't pay any income tax to begin with is completely unfair... especially when those who pay most of the taxes to start with aren't "eligible" to receive this money because they "make too much money." Oh well. Have fun spending!

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

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Recession watch: We've lost some competitors... and it hurts

Gary E. Sattler — 2008-04-29T15:00:00+00:00

Filed under: Debt, Entrepreneurship, Tax, Career, Wealth, Recession, Bankruptcy

This post is part of a series about real-life signs we're in a recession.

Normally, the loss of competitors in your field of business could possibly be considered a good thing, giving a boost of orders and income to your own business or employer. In today's economic climate however, the loss of competitors gives me cause for concern. Even as we struggle to accommodate growth in our facility, I'm worried by the downfall of some of our wood products compatriots. I know I've written that it doesn't pay to cry over lost manufacturing jobs, but that doesn't mean we should be without compassion either.

The National Federation of Independent Businesses (NFIB) reports for March that its Small Business Optimism Index is at its lowest point since the second quarter of 1980. Businesses are complaining that increased selling prices are not keeping up with overhead inflationary pressures. Nearly one-quarter of the NFIB survey respondents indicated that they raised employee compensation by a margin which is outstripping profitability increases. I believe that therein lies the downfall of my company's fallen competitors.

One of the biggest concerns I have with these job losses is that they tend not to be felt outside their own regions. We as a country lose a hundred good jobs here or there every day, in a hundred unnamed places. But it doesn't make the headlines because it doesn't sell advertising space. Government statistics never paint the whole picture either. The government bean counters expect that we're too dull to understand that the loss of a well-paid machinist is not mitigated by the addition of yet another undocumented food service worker. They only give you the bottom line numbers, painted with a broad and blurry stroke of the brush.

So, my employer's loss of competitors has a core which tastes quite bitter. As I work my long hours I sometimes pause to think; Was that competitor we lost as much a buyer of my goods as it was a rival? Could my employer be the next to go under, or my neighbor's, or yours? Please say a quiet prayer for the unemployed among us, then get back to work. That is, if you still have it.

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Tennessee already taxing digital downloads

Tracy Coenen — 2008-04-25T17:30:00+00:00

Filed under: Shopping, Tax

One treasure trove for money-hungry politicians who haven't found a tax they didn't like, is digital downloads. There has been a constant argument over internet sales for years, as consumers have found many of their online sales haven't had sales tax applied. Governments wouldn't want to waste such a lovely opportunity, would they?

Instead of managing budgets and cutting the outrageous levels of spending, politicians seem to always be looking for a new tax to levy. So taxing digital downloads seem to be the next frontier. After all, the states should be getting a cut of every penny we spend anywhere, right?

Tennessee has apparently already been taxing digital downloads, and no one even noticed. State laws currently say that only "tangible goods" had sales tax applied, and politicians wanted to change the law so that digital downloads fall under the definition of "tangible" (and are therefore required to be taxed).

But a consumer has informed the world that digital downloads have already been subject to sales tax in Tennessee since the beginning of 2008. Sure enough, consumers took a look at their iTunes purchases, and found that Tennessee sales tax had been added to their bills. This is a slippery slope. Governments expand their ability to tax each year, leaving consumers in the position of turning over more and more of their hard-earned money to politicians. When will it stop?

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Tax rebate checks coming early!

Tracy Coenen — 2008-04-25T16:00:00+00:00

Filed under: Shopping, Tax

I'm generally opposed to this whole idea of sending checks to people courtesy of the IRS. I don't care if you call them "tax rebates" or "economic stimulus." It's a crazy redistribution of money that isn't fair to those who really pay all the taxes.

Half of all American households pay no income tax, but most of those are going to get the checks anyway. How can it really be a rebate if you haven't paid anything in the first place? It can't, but that's not stopping anyone. And many of the households who do pay a large proportion of the income tax won't get one of these checks because they "make too much money" to qualify for one. I know there's nothing I can do about it, but I at least feel better if I publicly complain.

So for those who are lucky enough to be getting a check, you should know that they're going out early! Checks will be mailed starting Monday, a full five days before their planned mailing. And if you had your tax refund direct deposited this time around, you'll get your economic stimulus money even faster because it will be direct deposited to your account.

The government is hoping that you spend your $600 or $1500 or whatever your family is receiving. I'm hoping (not so secretly) that you do something responsible with it like pay down some debt, establish a savings account for emergencies, or otherwise buy something that your family really needs (not just something that they really want).

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Wesley Snipes gets 3 years for tax evasion

Zac Bissonnette — 2008-04-25T09:00:00+00:00

Filed under: Tax

Actor Wesley Snipes was cleared of the most serious charges in his criminal tax evasion trial, but he's still going to do spend some time in the pokey.

Yesterday, a federal judge William Terrell Hodges of Federal District Court.sentenced him to 3 years in prison for willfully failing to file a tax return. That's the maximum sentence for the 3 misdemeanor counts, and it seems that the judge is looking to make an example of Snipes. He also must pay $17 million in back taxes plus interest and penalties.

Mr. Snipes' lawyer said he would appeal.

Wesley Snipes is the most prominent example in years of the government's efforts to crack down on tax deniers -- people who claim that they are not obligated to pay taxes.

For some examples of the arguments tax deniers use -- and why they don't work, check out this great series from Tracy Coenen.

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Wanna take a $3 trillion shopping spree?

Anne Gelhaus — 2008-04-25T08:00:00+00:00

Filed under: Debt, Extracurriculars, Tax

Since co-authoring The Three Trillion Dollar War with Linda Bilmes, Nobel Prize-winning economist Joseph Stiglitz has tried to help American taxpayers wrap their heads around just how much our government is spending on the conflicts and subsequent occupations of Iraq and Afghanistan by doing some comparison shopping.

"Try filling your shopping cart with what the cost of the Iraq War could buy: health care for every American? A new home for every subprime borrower now facing foreclosure? An Ivy League degree or two? You haven't even gotten started," Stiglitz said.

To illustrate Stiglitz's assertion, the folks at True Majority and Brave New Films launched the Three Trillion Dollar Shopping Spree, where consumers can fill their carts with $3 trillion worth of virtual items that could save the world or just make their own lives easier.

I barely broke the $1 trillion mark on my shopping spree, even with a cart full of goodies like fighting AIDS in developing nations ($15 billion), worldwide compliance with the Kyoto Protocol ($400 billion), worldwide no-kill animal shelters ($7 billion), achieving universal literacy ($5 billion) and a vacation in space for $20 million (hey, altruism has its limits).

Apparently, it's a lot easier to spend the big bucks on armed conflict. According to Stiglitz and Bilmes, this is how $3 trillion is being spent by the Bush administration in its war efforts:

$526 billion - borrowed money poured into Iraq so far
$615 billion - total interest costs for taxpayers
$280 billion - to rebuild our military
$590 billion - disability benefits and health care for Iraq veterans
$1.5 trillion - estimated costs through 2017

So while it's fun to fill your virtual shopping cart with items like universal health care for all Americans (about $6,000 per person), It's hard not be infuriated when you see where this money is actually going. The Three Trillion Dollar Shopping Spree gives people a clearer picture of how their tax dollars could be better spent.

How to deduct your home theater from next year's taxes

Josh Smith — 2008-04-23T16:30:00+00:00

Filed under: Tax, Technology

I didn't know you could attempt to deduct THX from your TAX return but the good folks at Sound and Vision Magazine have covered many of the issues related to deducting home theater equipment.

As an amateur audiophile and gadget addict, this guide is of particular interest to me, however its usefulness may be questionable for the majority of individuals. If you are up to the challenge, the rewards of home theater deduction may be worth the hassle for anyone ponying up for 7.1-surround and a screen larger than 50 inches.

This process's worth to an average Joe is questionable due to the many requirements a deduction of this type requires. First and foremost you'll need to set up a business for which your home theater is needed. If you can manage to do that, you also need to make sure your home theater gets more than 50% of its use for work related activities. On the upside, if you meet all of the requirements -- including generating income from your business -- you can go all out claiming anything related to your haven of sound and video, even furniture, so long as it all meets the 50% rule.

If you need more help determining if your "movie quotes on demand" service is a business or just a hobby to annoy those around you, check a recent post by Tracy Coenen, Is it a hobby or a business. I wish I could start claiming items I purchase for business use but in all honesty I can't imagine anything I do use in pursuit of blogging being used more than 50% for business, if you can, more power to you. Just don't point your finger at me if the IRS comes a knockin'.

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Economic stimulus scams have arrived!

Josh Smith — 2008-04-21T14:30:00+00:00

Filed under: Ripoffs and Scams, Tax, Fraud

This weekend I read in our local paper about an individual who almost got caught up in a scam to drain her bank account. The scammer was using the upcoming economic stimulus package to solicit personal and bank account info under the guise of the IRS.

Even though she had already provided the information she was lucky enough to change her bank account info before any funds were drained. The local IRS contact warned individuals that the IRS will not make contact via email and that scams like this are a common occurrence.

WalletPop producer Amey Stone had warned of the tax rebate scams before congress had even approved the stimulus package, but as May 2 approaches, the frequency of attempted rip-offs will only increase. The IRS already spent $42 million letting citizens know that the checks are coming, and the only requirement is to fill out a 2007 tax return. Despite the Super Bowl-sized campaign and nonstop news coverage it seems individuals are still falling for these scams.

I don't think I can put this any nicer, don't give out your personal information online! It is really that simple, if everyone stops answering these "demands" for banking info, the spammers and con artists will at the least have to move to a new medium. I understand that at times the emails appear to be legit now that the bad guys hired an English major to write them, but just delete it.If you are really concerned that the IRS is auditing you, withholding your rebate check or sleeping with your sister -- Call them. Same goes for banks, colleges, and any other entity trying to "confirm" some piece of personal information so that your account isn't shut down. When you do make the call, use the number on your membership card or local yellow pages, not the one in the email they sent you.

Remember, only you can prevent identity theft, well that and the IRS fixing its vulnerable computers, but mostly you.

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Sizing up the tax returns of the presidential candidates

Tracy Coenen — 2008-04-21T10:00:00+00:00

Filed under: Tax, Wealth

Income tax information is generally private, but in the case of presidential candidates, it's not. Their invasion of privacy makes for hours of fun for those of us interested in how much money others make. Here's how the numbers shook out for 2007 tax returns:

John McCain:
Adjusted gross income $386,527
Charitable contributions $105,467
Federal income tax $118,660
Actual tax return here (large file).

Other interesting information: McCain gave $105,467 to charity, which was 27% of his income. He also made just over $110,000 from books he's written.

Barack Obama:
Adjusted gross income $4.14 million
Federal income tax $1.4 million
Actual tax return here (large file).

Other interesting information: Obama gave $240,370 to charity, which was a measly 5.8% of his income. $3.2 million of his income was from Random House, presumably for books by or about him. (Nice work, if you can get it.)

Hillary Clinton:
The actual numbers aren't available yet because the Clintons filed an extension, but their estimates include:
Income $22 million
Estimate document here.

The Clintons estimated their charitable contributions $3 million, 13.6% of income. The bulk of the income, $10 million, comes from paid speeches made by Bill Clinton.

Politics, books and speeches can be good gigs if you can get them, apparently. I'm not so sure I'd want the rest of the world in my financial business, though. On second thought ... if my income was $22 million, I wouldn't mind letting all of you take a peek. It would be a small price to pay.

Tracy L. Coenen, CPA, MBA, CFE performs fraud examinations and financial investigations for her company Sequence Inc. Forensic Accounting, and is the author of Essentials of Corporate Fraud.

Supercharge your stimulus rebate at select retailers

Josh Smith — 2008-04-18T17:00:00+00:00

Filed under: Debt, Shopping, Tax

In the next few weeks, economic stimulus checks will begin hitting mailboxes and bank accounts across America. Like all good Americans, you should be ready to spend your check as soon as it arrives in order to stimulate the economy. Several retailers have already announced programs to lure shoppers through their doors with stimulus incentives.

Both Kroger and Sears are offering 10% bonuses, in the form of gift cards to anyone who signs over their stimulus check. If you want to get in on the spending but received your economic stimulus check via direct deposit, you can still take part in the "deal" via check or debit card.

I'm going to go out on a limb and predict the future, in May and June, we will see loads of check fraud as retailers have untrained clerks accepting checks for over $1,000, just wait and see.

The real question which you need to ask yourself is, whether this additional 10% bonus is worth spending your government windfall, rather than tackling debt. While these gift cards have no fees or expiration dates, cards are easy to lose and misplace, costing you a nice chunk of change. Also even though gift cards tell the holder to, "treat the same as cash," in my case, a gift card gives me a feeling that I can buy whatever I want since it isn't really money, often leading to frivolous purchases. If you find that you had similar feelings with the last gift card grandma sent you on your birthday, this deal may not be for you.Personally I am going to forgo stimulating the economy. That's right, much to my wife's disappointment, we won't be spending the rebate on scrap-booking supplies and a flat screen TV. Our stimulus check will be heading straight to our credit card debt, which last time I checked, we were paying more than 10% interest on. Even though the debt is on its way to a 0% card in the next month, knocking over a grand off of our debt is way more satisfying than any shiny, beautiful, sexy new HDTV is. Right? Right?

Unless you have a killer interest rate, your stimulus check may be best spent on what you purchased last year, rather than what you want to purchase this summer.

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Stimulate this! Spending your Economic Stimulus tax rebate check, 10 great ideas

Sarah Gilbert — 2008-04-17T23:42:00+00:00

Filed under: Simplification, Tax

While there are lots of opinions pro and against the Economic Stimulus Package checks (hitting your bank account beginning May 2!), the fact is: they're coming no matter what you think. We all have heard the prevailing skepticism as to whether $300 - $3,000 a family will do anything to help the failing dollar or to create jobs; in the end, who knows? But we have some ideas about how we could spend together to create the change we want to happen. And we'd be remiss as a personal finance site if we didn't come up with some ways you can truly stimulate your own personal economy.

Let's start with a couple of Don'ts. Don't use your rebate check for conspicuous consumption -- TVs, DVD players, large bottles of Champagne, imported Kobe beef, a trip to Cancun. Don't use it to create a greater need for fossil fuels; not as a down payment for a new car (if your very survival depends on a car, at least get a used one), or to trade up to a bigger gas guzzler, or for a power mower, or to put a new hot tub in. Do this and you'll help stimulate us into the worst possible direction.

Here's a better idea. Do try to spend it locally on something that will benefit your financial future! I've been reading a lot of smart people's musings about this (and coming up with some of my own), and have identified some areas of absolute crisis in our economy. Our country's farmland is being stripped by the wrong-headed over-production of corn and soy (in complete ignorance of sustainable farming practices). Our limited fossil fuel resources are being frittered away unnecessarily so we can continue to cling to our isolated, wasteful car culture. Our healthcare expenditures are reaching a panic point, while we are eating ever-more-expensive, ever-more-damaging food. Life as we know it is not sustainable, and no one seems to have the willpower to reverse the societal tide.

Doing something radical with your Economic Stimulus Package check can be both fun and good for your own financial bottom line. You'll end up with more money left after your pay your bills, you'll be healthier, and you may just spur a tiny bit of social change. At the very least, it can't hurt you. Here are some ideas:

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