Pay Yourself First

Now that we’re well into the new year of 2009, if you’re anything like me, you are probably starting to gather all of your tax records together to file your 2008 tax return.

I got an ad in the mail today from Jackson-Hewitt. The eye-catcher was a statement that “9 out of 10 Jackson-Hewitt customers get a refund.” That might be true, but it says a lot about how ignorant the average taxpayer is when it comes to withholding.

I am retired, so I don’t have an employer to withhold taxes. I do request that taxes be withheld from my retirement pay and from my IRA withdrawals. I also pay quarterly estimates. As a result, I will owe $124 when I file my tax return on April 15th. That’s right, it is that close to being dead even, even though I have paid in about $4,500 for 2008.

The average tax refund last year (2007 tax year) was close to $3,000. It will probably increase this year, since it has done so almost every year for the past three decades. Did you know that many people who get those refund checks after filing their taxes believe that they didn’t owe taxes. Since they receive a refund, regardless of the fact that it isn’t a full refund of all taxes paid, they actually think they didn’t have to pay anything.

The tax refund of $3,000 per taxpayer is a free loan to the government, and it is wasted money. You’re likely asking yourself how it is “wasted” since you get it back. Well, it could be saved in an interest-bearing account, or it could be invested in some stocks or bonds. It could also be deposited in a retirement plan like a 401(k) or even an IRA. In any one of these instruments, it could do more for you than it does as a misnamed refund. It isn’t a refund, it is your money and it always was yours.

You might not recall it if you’ve worked for the same employer for several years, but when you were hired you filled out a Federal Form W-4. On it you told your employer either A) how many dependents you had at that time, or B) how much of each paycheck to hold back for taxes. If you are married, I can almost guarantee that you checked the box that reads, “Married, but withhold at higher Single rate.”

The reason I can make the above claim is that all the instructions on the W-4 intimidate you into thinking you might have too little tax withheld. There is no explanation of what happens if you do have too little withheld, but the implication is that you could suffer “penalties” for underpaying. Nothing could be further from the truth.

That last statement has nothing to do with the strange cases of Tim Geithner and Tom Daschle that have received so much publicity in the past few weeks. They probably should have paid both interest and penalties, based on the guidelines I will tell you about shortly. But I digress...

Another source of overpaying taxes is that very few people take the time and effort to submit a new W-4 when life events occur, such as birth or death of a dependent, divorce, additional job, or working spouse. Any of these events that take place after you have turned in the W-4 should trigger a new and revised one. However, you don’t even have to wait for one of these to happen. You can choose to revise your withholding for any reason.

My recommendation is for you to take every legal deduction you can on the W-4 so that the very minimum tax is withheld. That might cause a shortage in your withholding tax. You can correct that very easily by sending in a check with the Form 1040ES four times a year. Anyone can pay quarterly estimates, and there is no penalty for doing so.

The real advantage of using quarterly estimates is that it gives you the opportunity to check your tax status at least four times a year, and it is very quick and easy to accomplish the checkup. You might have to send a check for $100 or so, but at least you have the use of that money until it is due. I use the 1040ES to send in $400 every quarter, and there is no late penalty or interest due for my underpayment during the quarter or the year. The 1040ES is due on April 15, June 15, September 15, and then on January 15 of the following year.

If you can use a calculator and you keep track of your income and the tax that has been withheld, it is very easy to file your final tax return with a minimum deposit or refund. And those penalties and interest only come into play when you A) owe more than $1000 with your return, and B) paid in, or had withheld less than your tax liability for the prior year, or C) did not pay in fairly even installments for each quarter of the year.

How do I know all this stuff? I worked as a tax preparer for H&R Block for several years, and I had to take refresher courses every year. I think I know even more than I divulged to you today.

Please stop giving the government more of your money than you owe, just so you can feel like you don’t owe anything on April 15th. Most important is that you take an active part in determining how much of your money is being used by the government as interest-free loans.

Singing Valentines

I am writing this column on February 16, 2008, but I won’t be posting it on my blog until the end of January in 2009. The topic is only good once a year for the two weeks preceding Valentine Day.

I had the privilege of singing Valentines this year for the first time, and it was one of the most rewarding experiences I’ve ever had. If you’ve never bought a singing valentine for your wife, or girlfriend, or fiancé, or other significant loved one in your life, you don’t know what you’re missing. I doubt that there is anything else you can do on Valentine Day that will equal the experience she will have when four tuxedo-clad men show up at her home or in her workplace, present a long-stem red rose and a card with your personal greeting on it and then sing two love songs to her.

Our quartet sang about 30 times this year, and the response was phenomenal. The ones we sang in the home were the most personal, and the tears flowed every time. But the ones we sang at the workplace, especially at schools, were the most fun, because our audience was larger, and the school children were so impressed.

We sang to women and men—that’s right, we’re gender neutral—and our audience included teenage girls, widows, mothers and daughters. We started at 7 AM and didn’t quit until 7 PM. Several others went on until 9 o’clock.

We were one of six quartets that circulated throughout the metropolitan area singing, and we presented 148 Singing Valentines. It wasn’t inexpensive for the senders, but I bet every one of them felt it was worth every penny.

If you would like to send a Singing Valentine to your sweetheart this year, most cities have the service available. You can usually place an order online or by phone. If you order early and you allow a four-hour window, you can probably get a discount. The extras, like having the presentation at your Valentine dinner at your favorite restaurant are a little extra money, but are always worth it.

Like most quartets, we will be singing for two days this year, since Valentines Day falls on a Saturday. You can choose between Friday or Saturday, so there is a large window of opportunity to surprise and romance her.

So here it is fellas. If you are trying to come up with a good gift for Valentine Day, I guarantee that you cannot do any better than a Singing Valentine. If you don’t score big with your honey, it won’t be our fault.

Here are the lyrics to the two songs usually sung for the ladies:

Let Me Call You Sweetheart

Let Me Call You Sweetheart, I’m in love with you.
Let me hear you whisper that you love me too.
Keep the lovelight glowing in your eyes so true.
Let me call you sweetheart, I’m in love with you.


Heart Of My Heart

Heart of my heart, I love you.
Life would be naught without you.
Light of my life, my darling,
I love you, I love you.
I can forget you never.
From you I ne’er can sever.
Say you’ll be mine – forever.
I love you.

How can she resist?

WTC Photo

Shortly after the attacks on September 11, 2001, I received a picture of the WTC towers that had been taken just after sunrise on a date prior to the their collapse. I was very impressed with the image it presented, especially the illusion that you can see between the twin towers.

I don’t recall who sent me the photo, and if it was one of you, my correspondents, I hope you will not object to my using it today as the centerpiece of the column. I want to share this photograph that has an almost sacred image on it. Of course, it is an illusion caused by the filtration of the sun and the lens of the camera. Even so, it resembles a cross.


I took the liberty of altering the photo slightly. I view it as a reminder of the horror of that day. I hope it inspires you as much as it did for me.

These photos were not photo shopped or enhanced in any way except to insert the words at the bottom of the second one.

I welcome your comments.

The Water Drip Solution

No, this isn’t a treatise on torture methods, though God knows, we need one. This topic concerns an annual practice that I question: dripping water from faucets during the winter.

Am I missing something? I am a Yankee transplant currently living in Augusta, Georgia, in the heart of the South. I grew up in Kenmore, New York, just north of Buffalo. I moved from there in 1975 and have lived in New York City, Omaha, Kansas City and El Paso prior to moving here in 2006. All of those with the possible exception of El Paso are cold weather cities. El Paso has its own cold issues, due to elevation.

This is the third winter I’ve spent in Augusta, and all three of them have been marked by several cold snaps. However, a cold snap here is the equivalent of a day in late fall or early spring in any of those northern cities.

We are currently in one of those cold snaps, and the temperature during the night drops to the low 20s or high teens. During the day, temperatures go back up to above freezing, and sometimes even get into the 40s and 50s.

Now, here is the part that confuses me. On nights when the temperature goes below 32 degrees, we are warned to keep a small stream of water running in all sinks and outdoor faucets. The reason is obviously to keep water pipes from bursting.

In all of the 65 years that I lived in those cold weather cities, I don’t recall ever hearing any warnings similar to those we get every winter here. Oh, I do remember that the drip-method was recommended for those outdoor faucets and any sinks on outer walls. And we did open doors on the cabinets below those sinks. However, those recommendations were usually given when the temperature was expected to be below zero for extended periods.

Even allowing for the increased insulation in homes built in northern cities, I fail to see any danger of burst pipes in a southern home as long as the sink is not by an outer wall.

I know, you are probably thinking to yourself, “I wonder if he heeds the warning and turns a low stream on from all sinks and outdoor faucets?”

Well, I have the exterior faucets covered with the foam insulators, so I don’t turn those on. I do drip the water in the interior sinks when the temperature goes below 15 degrees, but that’s due to the fact that the idiots who built this town home put the hot water heater up in the unheated attic. It is completely unprotected, so I worry that it could freeze up those pipes.

My only other question about this weird water practice is, “How are we supposed to rectify this with the environmental/conservationist movement in this age?” It flies in the face of all those dire warnings that we are running out of fresh water.

I’ve read that a dripping water faucet wastes fifteen gallons a day. Since I have a hobby of brewing beer and fermenting wine, I think I know a little about water volume. I guarantee that that number is grossly exaggerated. I tried a drip method once, and overnight (8 full hours) I had less than a gallon of water in the jug. At that rate, it would have taken about a week to “waste” fifteen gallons.

Oh, as a little addendum to this column, the temperature here was predicted for an overnight low of 12 degrees, which spurred all the warnings in the first place. When I got up this morning it was almost double that—23 degrees, so I doubt that the precautions were necessary anyway.

Have a nice day!

Little Disorder - Big Name

Have you ever noticed that most medical conditions have really long unpronounceable names?

I went to visit my doctor the other day and one of my complaints had to do with fluid in my lungs during the night. This condition wakes me up with shortness of breath and sounds that I can hear at the end of each exhalation.

The doctor said he knew exactly what was causing the problem. Then he gave me the medical term for my condition. Awakening at night due to accumulation of fluid within the lungs is call paroxysmal nocturnal dyspnea. It may be associated with orthopnea, breathless while lying flat or need to use several pillows at night as well as swelling in the feet or ankles. It is usually due to congestive heart failure. It is caused by edema fluid translocating from the lower extremities into the lungs on changing position from standing to lying down.

I do have congestive heart failure, I sleep with two pillows, and I experience swelling in the feet and ankles. I wear pressure sock to keep the swelling down, but still always have some.

I suppose there is a shortened name for paroxysmal nocturnal dyspnea, like maybe PND. I like the long name, since it makes it seem even more serious than it really is. In fact, the easy treatment for it is a prescription drug called furosemide, a water pill. Taken in moderate doses, it keeps fluid levels in the body down. But it does make trips to the bathroom more frequent.

I have another little disorder with a huge name. I also share that disorder with some pretty heady—you’ll soon see that “heady” is my first pun of 2009—big-name celebrities. However, I have mine under control (finally) and I don’t think they have that distinction.

Are you ready for this? I suffered for years with a strange and subconscious habit of pulling my eyebrows. The condition is called trichotillomania, “trich” for short. I never knew how many people have this problem until I was reading a Dear Abby column one day and she addressed it for one of her readers who had mustered up the nerve to write to her about it.

If you don’t have this OCD behavior, and you don’t know anyone who does have it, you might think it is a minor malady and not very dangerous or serious. If that is the case, then I have news for you. It is disfiguring when there are no eyebrows, eyelashes, and in some instances, no nose or ear hairs visible. Those are the most frequent hairs that come under attack, but there are some people who pull body hair from other places.

There are cures for the behavior, but I seem to have cured mine without help. In fact, I grew a mustache for exactly a year, from July 1, 2007 to June 30, 2008. My wife hated it, but I never told her that a major reason for it was to distract myself from hair pulling.

(I guess I should tell you here that it is pretty difficult and painful to pull mustache hair. I tried it once, just to test it, and I never did it again.)

There has been a lot of research into OCD behavior, and trichotillomania is one of the ones where great strides have been made to change it. If a person really wants to take the cure, it can be done.

Okay, who are those stars who share “trich?’ Two of them are Whoopi Goldberg and Chris Kristofferson. Go ahead and Google them and look at their photos; not a brow hair between them. They are pretty “heady,” aren’t they?

I have never seen either of these stars up close, so I don’t know whether or not they pull eyelash hairs (I never got into that) or hair from other parts of the body.

One of the bad remnants of trichotillomania—I like that word—is that my now visible eyebrows are not only grey, due to my age; they are also growing wild and have to be trimmed frequently. Of course, I could let them grow like Andy Rooney’s, but that is worse, I think.

Well, now you know. If you learned something about yourself, and if you would like more information about it, there are numerous sources on the Internet. You no longer have to suffer from this “nasty habit.”

Missing Money

Well, here we are in 2009 and good riddance to 2008! That was not one of our finest years, was it?

I’m going to start off the new year for you by possibly giving you money you didn’t even know you already owned. No, it isn’t a magic trick, and there are no gimmicks, no up-front money you have to send me as a “good faith” token. This is good, clean and clear cash that is just waiting for you to claim it.

Have I teased your brain cells enough by now to intrigue you?

Okay, let me tell you a short story of how I earned $78.70 for the price of two postage stamps. That’s all it took to get me money I had apparently abandoned.

A few months ago I was reading one of the Kim Komando newsletters online, and she gave a tip about claiming lost property. I followed up with a quick look at the Website she had linked to the tip, and I found my name and a former address I had lived at among the other hundreds and thousands of names.

I got really curious then and, although I had no inkling of any property I had left behind when I moved, I composed a letter to the address listed. There was even a property ID number for me to include in my inquiry. I put a forty-two-cent stamp on the envelope and mailed off the letter.

I received a return letter in the mail, and was required to provide a copy of my driver’s license and my Social Security card to claim my property. There was no indication of what the property was or how much it was worth. I was really curious, so I complied with the request and mailed in the proof. That all occurred on September 23, 2008.

Time passed and I nearly forgot all about the letter and the missing property, whatever it was. Then, last week I went to the mailbox and retrieved a letter from the Missouri State Treasurer. Inside was a check for $78.70 and a brief pre-printed memo. The check stub only had “abandoned fund” as the category for issuance, so I still have no idea what or where I abandoned this money.

I am not about to question any further the source of my good fortune, but I consider myself pretty meticulous about keeping track of my savings, so I am still in a state of shock over this windfall.

Now, here is all you have to do to see if you might also qualify to claim some lost or abandoned property. Merely log on to the Internet and go to www.missingmoney.com. There is a box near the top where you can type in your first and last names. Then move the cursor over the GO magnifying glass and click on it.

You will get a list of names similar to yours—hopefully with yours among them—and all the states where these individuals have lost property to be claimed. You can narrow the field by checking the street addresses, also given, to see if you are one of the claimants.

If your name and a current or former address appear on the listing, click on the name and it will give you some details along with the state where the property is held, a property ID number, and the state contact information for inquiry. Just follow the directions on the page and send off a letter.

If you are married, you should also try the name inquiry with your spouse’s name. There might be something that he or she left behind, too.

I hope you are as fortunate as I was and can reclaim something you left behind. This is one time when I can say and truly mean “Good Luck!”