Wednesday, July 27, 2011

Nanny State’s anti-McDonald’s campaign continues

On May 17, I wrote about the Happy Meal laws floating around the country. Then the very next day, I reported that there was a plot to ax Ronald. Well, it seems that the busybodies and Washington bureaucrats with too much time on their hands are at it again ...

They’ve pressured McDonald’s into adding more fruit and reducing the number of fries in its Happy Meals. It’s all in an effort to cut childhood-obesity. Whether kids will even eat the fruit is a different story.

But now parents have another dilemma: According to the Pesticide Action Network (PAN) many fruits, including apples, grapes and peaches are loaded with pesticides!

So I have a better idea that should appease the anti-fries crowd ...

Have your kids plant a garden.

Even if it’s only a few potted plants on the patio or balcony, imagine the possibilities:

• They’ll get off their butts, breathe some fresh air and get some exercise.

• They’ll learn that food doesn’t magically appear in a red cardboard box.

• It’s something you can do together.

• You control what goes on your veggies.

• And kids may actually acquire a taste for something homegrown!

Perhaps I’m biased. I love McDonald’s fries. And I think the company is a good corporate citizen. In fact, I own some MCD stock. And I completely agree the obesity epidemic is causing major heath problems.

But you can’t change kids’ eating habits by shoving a few slices of fruit in front of them and taking away a couple of fries. It has to come from a lifestyle change in which a parent’s personal responsibility comes into play.

Furthermore, I don’t like those small brains in our over-bloated government telling us how much of what, kids in this country should eat. After all, what’s on the regulators’ agenda next …

Banning goldfish? Been done

Banning yellow pages? Been done

Banning circumcisions? Been done

Banning sale of all soft drinks on city property? Been done

Banning all pet sales? Been done

Good grief!


Thursday, July 21, 2011

President Obama: "Were you lying then ... or are you lying now?"

Last week President Obama said Social Security checks might not go out if the debt ceiling isn’t lifted. Shortly thereafter, I received a flurry of e-mails from readers who are retired or about to retire wondering if they should start panicking.

Then over the weekend I heard Congressman Dennis Kucinich (D-OH), one of the most liberal guys in Washington, on Fox News. He reiterated the thrashing he gave the President earlier in the week:

"It’s A Fake Crisis, Social Security Did NOT Create The Deficit! It Will Be Able To Pay 100% Of Benefits Through 2037!"

That got me thinking: According to the Social Security trustees, there is enough in the trust fund to carry it through 2036. And I wondered if the President knew this. I did. In fact I wrote a column about this very topic back on June 5. And Kucinich did. So surely the President did.

After a quick Google search I found where he said less than a year ago at an Ohio fundraiser that the nation's Social Security system is "not in crisis" and doesn't need "any newfangled schemes" to keep it solvent for the next generation.

If I could meet President Obama face to face, speak to him on the phone, or even get an e-mail through to him, I have something to ask. I’d use a strategy trial lawyers like when they catch a witness with their pants down:

Mr. President: “Where you lying then … or are you lying now?” 

I’d put my question more diplomatically. But you get the point.

Of course I know I’ll never get to ask the President directly. But if he is one of your Facebook friends or Twitter followers, please ask him for me.

Best wishes,


Tuesday, July 19, 2011

Don’t let this derail your retirement dream

Back in May, I gave some ideas on what you should do before helping an elderly loved one. Then on June 18, I touched on it again. Now, a just-released report has kicked the importance of this up a notch.

Valuing the Invaluable: 2011 Update - The Growing Contributions and Costs of Family Caregiving found that in 2009, about 1 in 4 Americans provided care to an adult who needed help because of a disability or chronic condition.

The estimated economic value of their unpaid contributions: Approximately $450 billion in 2009, up from an estimated $375 billion in 2007 — a 21% increase. The report also explains the contributions of family caregivers; and details the costs and consequences of providing family care.

Besides the financial aspect, all this can take a toll on a caregiver’s mental wellbeing, too. According to the report, 69% of the caregivers said taking care of a loved one was their number one source of stress.

You can read the complete report here.

Staying at home to receive care is indeed the preference for most people. As I wrote in A Boomer’s Guide to Long-term Care

“… six times as many elderly people with disabilities live at home than in nursing homes.”

And I explain the options you have so you can make a choice based on your circumstances.

Life expectancies are increasing, health care costs are soaring and retirement accounts are floundering. So planning for the day when you or a loved one needs additional help doing the things you take for granted right now, has become even more important.

Don’t put it off.

Best wishes,


Thursday, July 14, 2011

Reader question on rental property deductions

In an article on tax deductions for real estate investors, I wrote:

“If you spend the majority of your time in the real estate business as a real estate professional, your rental losses are not passive. This means that your losses are fully deductible against all income, passive and non-passive.

"Otherwise, your losses are passive and only deductible up to $25,000 against your rentals' income (deduction phases out if your modified adjusted gross income (MAGI) is between $100,000 and $150,000). However, losses of more than $25,000 can be carried over to the following year.”

A reader asked the following question:

"My wife and I are passive investors. My question: When you speak of losses being phased out at certain income levels, are losses in this context a synonym for deductible expenses, or does the term "losses" mean the amount by which rental property expenses exceed rental income? Many thanks, Peter”

And my answer:

“Hi Peter,

This refers to gross income from the rental minus deductible expenses.
Most expenses relating to owning a rental property are deductible. The big exception is repairs vs. improvements, which I discussed in the article.”

Click here if you would like to read the complete article.

Best wishes,


Tuesday, July 5, 2011

IRS boosts mileage deduction

What do you know? Geithner, or one of his minions, must have stepped out of the ivory tower and into the real world … the one you and I live in … and discovered that gasoline prices are shooting through the roof. As a result, the IRS upped the standard mileage rate used to deduct the cost of business-related driving to 55.5 cents from 51 cents.

The higher amount will only apply for miles you drive in July through December. But still, I’ll take a higher deduction anyway I can get it.

Also the mileage deduction for driving to the doctor and other medically-related purposes went to 23.5 cents from 19 cents.

The amount you can deduct for driving related to charitable work has been stuck at 14 cents per mile for years. Strange when you consider the cries for wealth redistribution and the calls to help the less fortunate coming out of Washington these days.

You can read the complete IRS announcement here.

Happy Driving!


Saturday, July 2, 2011

But when you screw up your taxes …

Back on June 23, I gave you a link on what to do if the IRS makes a goof and sends you a nice fat check by mistake. And if you read it, you found out how holding onto their money can cause you a heap of trouble.

But suppose you’re the one who make the error on your 1040? What then?

Well, that can get you in deep dodo, too, especially if you ignore the problem.

So the question is: After you find out you’ve made a mistake should you file an amended return or just hope the IRS doesn’t catch it? Well, don’t count on the government missing your mistake. With computers crosschecking everything such as 1099s and W2s, you don’t stand a chance.

And if you don’t take care of the problem?

There's a penalty for each month the tax remains unpaid. There can also be more penalties for big understatements or underpayments of estimated income tax.

The good news is that the IRS may waive a penalty if you can prove there was a reasonable cause for the error, and that it wasn't willful neglect.

In preparing an amended return, be thorough. The more information you provide to the IRS about the corrected item, the less chance there is that Geithner’s gang will do an audit.

Five Common Mistakes

According to the IRS, taxpayers often make these mistakes:

• Errors in adding and subtracting
• Forgetting to include interest and dividends
• Dependent Social Security number not correct
• Incorrect filing status
• Using the incorrect tax table

How to Avoid Making Them …

The IRS offers some ways to avoid common tax return errors:

File electronically

Filing electronically, whether through e-file or IRS Free File, vastly reduces the errors in a tax return, as the tax software does the calculations, flags common errors and prompts the taxpayers for missing information.

Mail a paper return
to the right address

Paper filers should check the appropriate address where to file in or their form instructions to avoid delays in processing. Fill in all requested information clearly, including Social Security numbers.

Check only one
filing status

Also, check the appropriate exemption boxes. When you enter Social Security numbers, make sure they are correct.

Double check all figures

While software catches can prevent many errors on e-file returns, math errors remain common on paper returns.

Get the right routing
and account numbers

Requesting a federal refund directly deposited into one, two or even three accounts is convenient and allows the taxpayer access to his or her money faster. Make sure the financial institution routing and account numbers entered on the return are accurate. Incorrect numbers can cause a refund to be delayed or deposited into the wrong account.

Sign and date the return

If you are filing a joint return, both you and your spouse must sign and date the return. E-filers can sign using a self-selected personal identification number (PIN).

Attach forms to the
front of the return

Paper filers need to attach W-2s and other forms that reflect tax withholding, as well as other necessary forms and schedules, to the front of their returns. Those claiming credits that require special documentation, such as the Homebuyers Credit or the Adoption Credit, are also reminded to include all the suitable records with their returns.

And a Couple of Tips from Me …

If you haven’t requested an
extension yet … do it now!

You had until April 18 to file an extension, which will let you put off filing until October 17. If you didn’t meet that deadline, requesting a filing extension for your return is easy and could still prevent late filing penalties. You can either use Free File or Form 4868. But keep in mind that while an extension will grant you additional time to file, you were still required to pay any taxes owed by April 18.

Do you owe tax?

If so, don’t wait another day to pay it. A number of e-payment options are available. Or send a check or money order payable to the “United States Treasury.”

Have a Safe and Happy Fourth of July!