Make Money and Save Money

Have you purchased a home for the first time in the past year? Do you plan on purchasing your first home before December 1st of this year?

The American Recovery and Reinvestment Act of 2009 includes a refundable credit you can claim on your 2008 or 2009 tax returns.

The 2008 credit is 10% of your purchase price up to $7500. This credit is more like an interest free loan because you must pay it back over a 15 year time frame starting in 2010. This is available to anyone who purchased their first home between April 1, 2008 and December 31 2008. 

The 2009 credit is 10% of your purchase price up to $8000. Unlike the 2008 credit you do not pay this money back unless you sell your home within the first 3 years. The IRS have added a provision that allows those who have purchased their home already this year to claim the $8000 on their 2008 return. If you have already your return for this year you may choose to Amend it and claim the credit or you can wait and claim it on your 2009 return.

An interesting fact is legal land contracts are eligible for this credit as well, it does not extend to the rent to own/lease to own contracts. This opens the door to many purchasers who have had to go the land contract route because of their credit scores or other situations.

Hopefully this will help many taxpayers in this unstable economy. Now if I were to claim this credit I have laid out a plan to pay my mortgage off early. I would put $4000 into a 32 day CD and keep rolling it over for 18 months. $2000 would go directly towards the principle. The remaining $2000 would go towards improvements of the home. After the 18 months are over I would split the money in the same manner paying off my mortgage as quickly as possible while building equity.

So here it is about two weeks after most everything is being broadcasted digitaly and Dish Network has shown their disguting greed. I have had Dish Network for over 3 years, my payments may be late on occasion but who hasn’t made a few late payments these days. I have never been turned off so I must be doing something right, or so you would think.

I turned my television on mid-afternoon to find that I had no satelite channels, thinking it must be some kind of interference or at worst one of my children unplugged something. I search and poke around looking for the source of my pictureless screen. Finding nothing out of place I begin to question myself on my last payment. Now I know I paid it less than a month ago so I went online to look up my debit card statement to see when it was paid. Found it and sure enough it was only 12 days ago that it went on my card.

I then call Dish Network to see how to fix whatever problem I was encountering. I get on the line with a snotty woman who tells me my bill is over $400, knowing that this figure was not correct I questioned her on the reason for such a balance. She starts babbling some nonsense about my April payment, confused I tell her that was impossible seeing as how it is only February. She then tells me it was April 2008’s payment and that on the 26th of February it was reversed. WHAT?!

How can my payment from 10 months ago be reversed now? Why would anyone wait almost a year to post a payment to a customers account let alone reverse it? This woman goes on to tell me how they had been trying to reach me by phone over the past two weeks. I pull up my caller Id and know she is lying through her teeth, no calls from any number that I do not recognize has come through in over a month. No message was left on my machine, no one in the house can recall getting a phone call from Dish Network and my last bill statement clearly shows my current balance at a reasonable $57.

She gets all huffy and puffy threatening this and collections agency that. I told that woman she was out of her mind if she thought I was going to give in to such a strongarm tactic as they were trying to pull. I know they think that I NEED their service with the recent digital switch, that is where they are mistaken. I have every resource available to me on the internet and tomorrow I will be building a tower that will hook me up straight to the internet through my television. Goodbye satelite and high monthly bills and hello internet freedom at no extra cost to me.

That is the beauty of technology people, when they create televisions with the capabilities they have today you are one cord away from cutting an entire bill out of your budget. That is my money saving tip for today, why pay satelitie or cable bills now that you can hook up your television straight to the internet and watch whatever you want whenever you want to watch it.

My husband and children are avid World Wrestling Federation fans, they watch every show. My house is overrun by wrestling figures posed and placed in random spots, at least it seems random to me. My two year old son can always be found with one sticking out of his mouth and few others laying here and there.

We own every movie that stars a WWE talent, most recently we purchsed “Condemned” with Stone Cold Steve Austin as the male lead (not bad at all really it was much better than I thought it would be). My husband owns 15 different T-shirts featuring the Texas Rattlesnake and every figure they have made. We also have a slew of Rey Mysterio, The Undertaker, Edge and the Hardy Boys thrown in there.

I found a few things this morning that are cool and cheap (hey, gotta find a bargain these days right). Hope someone else gets some use of this post, if you like the deals let me know and I will post different categories of things on a regular basis.

Five Bucks or Less

Between $5 and $10

Between $10 and $15

My local morning news show ran a small clip about a list of entities that will be getting some of the our state’s stimulus funding, I was appalled. Here I am living less than 30 minutes from Elkhart Indiana, you know the one President Obama talked about, and no mention at all of any money going to create jobs there.

However our local College, Notre Dame, will be seeing 1.2 million dollars (at least that’s what I saw). Our public schools get a pittance of less than $200,000 to work with, now where exactly is the justice in that? The college has many other avenues of funding available to them that the public school’s don’t get, how is that fair? I guess I just do not get the thinking behind the dividing of the funds.

I did not see any listing of new job creations, retraining of displaced workers or anything that would benefit the average Jane and Joe who find themselves unemployed. At best I see temporary jobs being created, once the project is finished the workers would be laid off again. That may be good for the now but what about later, they will find themselves looking at the same bleak scenario they are living with now.

Guess I need to step off the soapbox for now and wait to see if anyone else is as offended as I am by the list. Just tickles me the wrong way.

Whew! I have made it through the busy part of tax season, the first week after the 31st of January. As most knows every employer by law has to send out their employee’s W-2’s by January 31st. Now that I have slowed down a bit I took a look at the hours I have put in the last two months and realized I hate being salary!

I signed my contract not even thinking about the possibilties of working more than what my contract stated. In two weeks I put in 163 hours, making my hourly rate of pay a little under $6. Ughh, but I am not going to complain because at least I have a job and at least I am able to pay my bills.

Did you know that the percentage of people on unemployment right now is staggering, even more staggering than that are the amount of people out of work who don’t qualify for unemployment. I was in the hospital emergency room not long ago and the nurse was telling my husband and I she had been working there for 27 years, remarkable. However, she only had two weeks left before they “cut back” and she would be jobless.

I started this Blog to highlight the many ways I have earned some extra cash and how I have saved some money over time. What I did not expect or really understand at the time was that most are already doing everything I come up with. It is a scary time in our financial history here in America, not completely hopeless but looking bleaker each day.

I have seen alot of people that really need to get a clue and stop complaining that they took a paycut and be happy they weren’t laid off. Stop thinking that the government owes you something just because you breath air in America, forget about the new Stimulus that was passed and find a job. Any job, don’t get particular now take the first one that opens up to you. In another few months it will be paying at least $7.25 an hour when the increase in minimum wage goes into effect come July. Get in now and hope something better opens up to you soon, in the meantime pay your bills and feed your family.

Now I will sit back and take the pelting of vulgar words I know will be applied to this post. I can take it, come on give me a constructive dialog to feed off of.

I jumped online today really quick and the first thing I saw was an article written for the Wall Street Journal called Early Filers Pile on Errors. As someone who deals with taxes on a daily basis I have to agree with the statement  “As if doing your tax return wasn’t tricky enough, it’s particularly easy to make mistakes this year, thanks in large part to the economic-stimulus payments sent out in 2008…” .

The confusion began upon the first IRS drain on January 17th and is still afecting returns almost a full month later. Early filers either put in the wrong amount they received, eroniously claimed the credit or put the stimulus amount they received on the Recovery Rebate Line instead of the amount they are due if any. If your filing status did not change from last year to this chances are you already recieved your Credit in full last year. If you added a dependant or your income changed dramatically then you may be entitled to additional amount this year.

If you use a tax service professional that offers you the choice of receiving a loan off of your federal refund like Jackson Hewitt or H&R Block, then claiming an amount other than zero for the RRC will automatically disqualify you for those bank products. Their work around for this tricky situation is to leave the line blank and let the IRS determine your amount.

The problem that is arrising is this: electroniclly filed returns are historiclly funded somewhere within 8-15 days from the time the IRS acknowledges the return, but with the extra work involved tracking down filers who are indeed due a Recovery Rebate Credit can delay the IRS funding by about a week.

The problem this is presenting to the Tax Professional industry is anxious and annoyed Tax Filers who wanted their money yesterday. Many do not understand the tax filing process and believe that their preparer must have made a mistake on their return causing the delay. The automated messages the IRS has set up to help filers keep track of what is going on with their returns, makes it even harder to convine taxpayers that although the recording says a mistake was made on their return, the mistake was necessary in order to process their return with the bank.

The banks loan taxpayers some or all of their “estimated” tax refund IF they do not appear to be a “risk”; in some cases in as little as 1 day. It is costly but many do not care about the extra money as long as they can get their money today. The problem that is being encountered this year is the banks are denying more taxpayers than in the past and the taxpayers must wait until the IRS deposits their refund before they receive a check. Sometimes this can be closer to or beyond that 15th day.

Everyday I deal with angry taxpayers who did not pay attention when I explained the process and they selectively disregarded the “estimated” wait time. Just because we have estimated a 8-15 day wait does not mean the taxpayer will receive their refund in that time. Ultimately the IRS is in control of when you will actually receive your refund if you receive it at all.

Well I hope the taxpayers that read this will keep in mind that their paid tax preparers are just that, someone who “Prepares” your taxes. Once the tax return is submitted and accepted by the IRS the preparer can do nothing but wait just like you.

I have this mind set about money that tends to get me into some hot water with friends and family at times. I can easily recall a hand-full of “discussions” about personal finances that led to my close friends not speaking to me for long periods of time. See, I do not support frivolous spending and if asked my opinion I usually give it truthfully. I have watched too many stale situations go horribly wrong in very small amounts of time and this has caused me to be extremely frugal with my own finances.

Money is not something you should feel entitled to, by that I mean just because you work for it does not mean one should spend it any way they choose. If one has financial obligations like rent, mortgage and car payments one should pay them BEFORE one buys that new CD or pair of shoes. If one feels as if they need to choose between needs and wants then one should rethink their current employment. My advice to everyone and anyone will always be: Pay for your needs first, if you have money left over pick up that CD. If you do not make enough money to pay for your needs, then choosing to not pay for those necessities will only make the situation worse in the long run.

Think about this one; bills grow over time if not paid but that CD will become cheaper as time passes. Sure, you may not have bought it when you wanted it badly but at least you still have hot water.

My stance is even hardier if one has children, never should one think of themselves before ones child when it comes to finances. That does not mean I think a child should be financially spoiled. If ones child needs glasses and one decides to purchase a Playstation 3 instead of improving the child’s eyesight, I see that as an ultimate example of selfishness and poor financial judgement. Skipping the water bill to splurge on fast food is in my own opinion almost neglectful when one has children.

Sorry for the tirade today, I have been bombarded with poor me sob stories lately that come to light later being an example of wasted money and twisted financial thinking from adults who should know better. In the end they had the money to pay the bills and decided they worked for that money hence they should be able to blow it if they want and should have no negative consequences.

I know I have been quite over here for a few days, what with my work schedule and the PC recovery I performed this week I just seem lost in update land. I want to address the fact that most of my posts on taxes are US specific; I am not forgetting that many readers are from different countries I just need to do my research before I feel comfortable posting contry specific information. I am currently looking into Canadian income taxes and will share helpful links as I put a few more together.

I don’t want to share a site unless I am comfortable that they share relevevant and helpfull information. At the moment I am surfing and saving links as I come across them, my next country to research will be Germany.

I will release the second part of my Financial Planning series as soon as I complete the worksheets I want to share.  I will also be posting tips on tracking your self employment records easily and accurately. I plan to create a few worksheets for you that will help make it simplier to track your income and expenses with a tutorial on how to use each one.

I hate to cook, I am not sure what about it makes me detest doing it, I just don’t care to spend my time at the stove for long periods of time. I however get tired of eating the same set of meals repeatedly, and love him as much as I do, my hubby only has so many meals he can whip up. I learned a long time ago that just a little extra tweak, or love, put into a meal can make it seem like an extravagant difference.

My children love cold sandwiches, they request them often in fact. Two or three days later they will pick at the sandwich they so eagerly requested days before. If I want to keep to something easy and cheap I whip out my Forman grill and treat them to a gourmet sandwich (at leaste they think so). I am not sure if it is the melted cheese or the fact that it is warm, either way they eat every bite and savory it while they are eating it.

Turkey Melt

Take two pieces of bread and lightly butter the outside of them. Heat your skillet or in my case Forman grill and warm the meat for about a minute depending on thickness. Lay the bread on the surface and put a slice of cheese on each one. Let it melt into the bread and add the meat. Put the top piece of bread on and continue to cook until the breads turns a nice crunchy (not burned) golden brown. Add a dill pickle spear and some cottage cheese as side dishes and you have a filling and tasty meal.

The IRS requires that you claim any self employment income that meets or exceeds $400 in one year. That includes the money you earn online through PTC, article and review publishing, Adsense and other advertising earnings,  paid Blogs (like Today.com) and digital sales. This is reportable on a Schedule C: Income or Loss From Your Business or Profession.

You should receive a 1099 MISC (Independent Contractor) if you made $400 with any one company, if you do not receive one that does not necessarily mean you do not have to report your earnings. As an independent contractor, which is what the IRS considers someone who is not paid as a W-2 employee, you are solely responsible for keeping records of income and expenses.  It is in your best interest to keep diligent and accurate accounts of your business activity, the IRS can require that you provide these in the future to prove your income and expenses.

The most confusing part of self employment can be deductions, what is and is not considered a legitimate deduction. The simplest determination is this: Is the expense ordinary and necessary in your business? Ordinary is defined as one that is common and accepted in your business, and necessary is defined as one that is helpful and appropriate to your business. A farmer would not reasonably deduct the new copy of Photoshop he purchased but a Graphic Artist would.

Basically, just because you purchased it does not mean you can deduct it; and just because it is listed on the Schedule C does not mean you can claim it. Most online earnings do not incur mileage expenses, this is one example of a deduction that although it is listed on the Schedule C, I as a Digital Scrapbook Designer can not legally claim. I also can not claim printing expenses; such as photo paper, toner or ink because it is not necessary to my business.

I will leave the floor open for any questions you may have at this point and return with more information on this subject tomorrow. If anyone has a specific question they would like answered please leave a comment and I will answer it in the next post. For those who are visiting for the first time, I am an Office Manager for a Tax Service with 6 years of tax preparation training and experience. If I feel that I can not answer your question I will seek the appropriate response from my colleagues who have experience in that area.