Welcome!

I am now a regular contributing columnist to Queercents, the nation’s leading personal finance blog for the LGBTQ community. Look for my posts there every other Tuesday. Have a look around my personal site, Affine Financial. I hope you’ll find additional tips on financial planning and tax reduction that are useful and perhaps even entertaining. Let me know what you think.

Thanks for stopping by.

Like much of the American way of life, the tax code was set up assuming that a family = two adults + 1.5 children + a house in the suburbs with a white picket fence.  It further assumes that one of those adults stays home while the other goes out to bring home the bacon.

Fast forward 200 years, and only about half of Americans fit this scenario.  Today, a couple of professionals each with $120,000 in taxable income would pay a total of $55,158  if they file as two singles.  The same couple would owe $57,989 if they file as a married couple — a “marriage penalty” of $2831.  It also bumps them into the next tax bracket, changing their marginal rate from 28% to 33%.

Let’s say the couple has a newborn infant.  If they invest the tax difference, $2831, every year for 18 years at 5%, they will have $79,642 — a tidy sum to help pay for college expenses.

Why can’t Uncle Sam fix this problem?  A couple shouldn’t be penalized just because both choose to work outside the home.

Tax rates can be found on p. 80 of the IRS 1040 instructions.

Doncha wish that when you finished the exhautive (exhausting?) TurboTax interview that you could just press that enticing “File Return” button, and all would be complete?

Yeah, me too.

Yet every time I think I’m finished, another issue pops up and nags at me to investigate. Continue Reading »

This is the third post in a series on non-governmental initiatives to improve a local community.

We live in a time of tremendous economic uncertainty.  Newspapers shout about what the government is doing (or should be doing, or should not be doing…) to fix the situation.  But surely there is something that the average Joe (or Joanne) can do, too.  We have empowered our government to spend trillions on our behalf, but have we, in the process, disempowered ourselves?

Here, then, is a link to the history of local scrip — currency printed, circulated and traded like dollars, but backed only by the good faith and credit of the local townspeople.  The purpose of the scrip is to keep transactions local, stimulating the local economy.  Continue Reading »

E-filing seems like such a good idea.

It saves me a trip to the post-office to buy postage for my ridiculously heavy return(s).  It saves a tree (or at least a fraction thereof).  It eliminates errors due to printing and rescanning.  It eliminates the potential headache of my paperwork getting lost or soggy or shredded.  It saves the government so much manual labor that they’re closing processing centers that used to hire hundreds of seasonal workers.  The government is saving a bundle.

So why do they charge for e-filing?! Continue Reading »

About a month ago, I posted on the tax deductability of the excise tax paid on cars in Massachusetts.  Over 50 folks have read this post.  Maybe everyone already knew about this deduction, but let’s say that it was new to half of them.  The average car is worth, perhaps, $10k, and at an excise tax of $25/$1k, that would be a $250 deduction.  Assume a 25% marginal tax rate, and that post might have saved the readers over $1500.

Hey, that’s some good!

Let me know if this was a new deduction for you.

When I first used TurboTax, I thought it was about the best thing since sliced bread. But that was about ten years ago, and boy, has the product gone downhill. The interviews used to be easy to follow and they took you down all the right paths to complete your return in one swell foop. This year, it’s different.

#1 The long and winding road. The interview didn’t follow the correct path. On my W-2, there’s an entry that indicates pre-tax money that I set aside for dependent care. It helps pay for my son’s daycare while I work. Turbo didn’t tell me that I needed to fill out Form 2441 until I went to check my return (just before filing).  A small window opened.  I was asked to enter an obscure code and amount.  There was no help offered.  I went to the IRS website to download the form and instructions.  When I returned to Turbo and entered the requested data, the amount of my return suddenly jumped (ok, that’s good news), since the amount set aside for daycare was now actually not taxed.

#2 I get to enter all my data twice. I live in Massachusetts and am legally married to my same-sex partner.   The Commonwealth recognizes us as married, but Uncle Sam does not (at least not yet).  Therefore, for the Federal tax, one of us files Single and the other files Head of Household, claiming our son as dependent.  For the State tax, we fill out a bogus Federal return as married (I’m not making this up — these are the TurboTax instructions), and then use it to compute the Massachusetts tax.  Wouldn’t it have been simple for TurboTax to let you merge the tax info from Person A and Person B and create a married form?  But, nooooo.  I have to start with one of our forms and manually add to it all the data from the other person.

#3  Creates deforestation.  My taxes are really not that complicated (despite the issues raised in #2), yet TurboTax creates 99 pages for my return.  Ninety-nine!   Seventy-five for the Federal government, and the rest for the Commonwealth.  And, of course, there’s another 99 for my partner’s return, and another 99 for the aforementioned bogus Federal “married” return.  If I actually printed it out, that’s a good inch or so of paper.   Thankfully, they included a pdf version a few years ago, so I keep an electronic copy of the full return, and I just print out the eight or so pages that I actually might want to read later.

TurboTax, are you listening?

Keep Out Of Debt

In the 1930’s, during the last Great Depression, financier Roger Babson personally funded the carving of moralistic slogans into boulders in his boyhood stomping grounds near Gloucester, Massachusetts.  By employing several rock carvers, he helped support the local economy.  Judging from the messages he chose to carve, he preferred to spread his largesse through employment rather than donations.  Sort of a personal WPA project.

Do you think we’ll see such civic support soon?

Photo from The Dacrons.

Danny Cottrell, a pharmacist in Brewton, Alabama gave $700 to each of his dozen employees.  The catch?  He handed it out in $2 bills.  He asked them to give 15% to a person in need and then spend the rest locally.  Since $2 bills are unusual, the town could see the effect of the money circulating around town.  What a fabulous idea!  Let’s just hope someone doesn’t try to recreate it with Susan B. Anthony dollar coins, or our pockets will be sagging.

Tip o’ the green shade to J.D. at GetRichSlowly.

In Massachusetts, you may be able to deduct your FastLane tolls and the amount you paid for MBTA weekly/monthly passes to commute by rail, bus, or boat.  Continue Reading »