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By Rosemary White, March 30, 2010 9:29 am

It’s not something I hear very frequently, but it can happen.  You e-filed your tax return early because you want to get your hands on that refund.   But your return gets rejected by the IRS because someone else has claimed your 10-year-old as a dependent.  That person would have had your kid’s name, date of birth and Social Security number.  If you’re divorced, chances are really good you know who the culprit is:  your ex-spouse.

If your child lives with you for most of the year, this should be a slam dunk.  So, unless you filed a Form 8332, releasing your claim to deduct the child, I’d say your ex had a bad year and is desperate for tax deductions.  So, you’ll now have to mail in your tax return and the reasons why you are entitled to the deduction.  The IRS will follow up with both of you and there will probably be an audit.  That’s just great.  Just another reason, this one most obvious, why you’re glad you got extracted from that marriage!  If this issue raised concerns, check out IRS Publication 501 in the exemptions of dependents section.  Good luck.  Until next time, here’s to good planning!

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By Rosemary White, March 26, 2010 1:25 pm

So, this is your chance to get some of your financial questions answered on a Boston-area radio station (come on you guys in Texas and Arkansas….).  Next Monday, March 30^th, at 5:00 p.m. Eastern, I’m going to be the guest on “Money Matters with Scottie McCall” on WBNW-AM 1120.  You can stream the audio and video on their web site, http://www.moneymattersradio.net.   Some of you may know that my first career was as a broadcast journalist.  In fact, I started out doing radio back in 1973.  Radio is great fun and I’m looking forward to my conversation with Scottie because his on air style is very upbeat and entertaining.  I love upbeat and entertaining.  WBNW-AM is known as Boston’s business radio station.  It’s part of a network of other radio stations in Massachusetts:  WPLM, Plymouth, MA and WESO, Southbridge, MA.  Together, the stations reach roughly 3.5 million people.   So, any questions?   Until next time, here’s to good planning!

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By Rosemary White, March 23, 2010 9:51 am

That’s when Theodore Roosevelt ran for president and called for a national health plan. I put this new law, signed less than an hour ago by President Obama, on the same pedestal with Social Security (1935), Medicare and Medicaid (1964).  Opponents,  back then, yapped about the cost of these programs or how their passage would destroy the very fabric of American life.  Looking at American society today, however, it’s hard to imagine how our country could exist without them.  Tens of millions rely on the security each month that these federal programs provide.  The Baby Boomers are counting on these programs, too.

I suspect there will be details about The Affordable Health Care for America Act that will dribble out for weeks.  The mainstream media, bless their hearts, have focused on the obvious provisions:

  *  No denied coverage for children with pre-existing conditions

  *  Healthcare coverage for 32 million additional Americans.  This should keep tens of thousands out of emergency rooms

  *  No lifetime or annual limits on healthcare benefits

  *  Dependent children under 26 can stay on their parent(s)’ health plan

  *  Tax credits to small businesses to buy health insurance for their workers

Part of the new law, a companion bill, will do more for those hoping for a college education than anything that’s been done in the last 40 years:  the Student Loan Reform Act will eliminate the involvement of banks in the student loan process.   There will be roughly $500 billion in the next ten years for students that want to borrow money directly from the U.S. government (that’s how we did it in my day).  In the current school year, banks are taking their cut of the $67 billion in loans.  Bypassing them will save billions in fees.  The banks, of course, are still trying to keep this gravy train….they’ve spent millions on lobbying.  I guess Congress is finally not impressed.  Now, if we could only get financial reform.  The legislative session is far from over.   Until next time, here’s to good planning!

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By Rosemary White, March 19, 2010 4:58 am

The countdown has begun.  If you haven’t filed your 2009 income taxes already, you’ve got just under 30 days to do so.  Here’s a few things to consider which may help cut your tax bill:

  *  If you have any kids in college, the American Opportunity Tax Credit lets you claim a $2,500 education credit per student per year for the first four years of college.  This is much more generous than the Hope Credit which is $1,700 for the first two years and the Lifetime Learning Credit, $2,000 per return.   You can only use one credit per year

  *  Bought a new car, light truck, motorcycle or motor home after February 16, 2009?  Then deduct the sales tax you paid on the purchase, on the first $49,500 of the vehicle’s cost

  *  If you collected unemployment in 2009, the first $2,400 will be income tax-free, something that will help millions of Americans, and may save up to $672 per taxpayer.  In a household where both spouses collected unemployment, the first $4,800 is tax-free

  *  If you were looking for a job in the same field as your last position, then your expenses for career coaching, resume services, travel, etc. can be deducted as a miscellaneous expense.  Your total miscellaneous expenses will have to exceed 2% of your adjusted gross income (AGI), so make sure you don’t forget a thing

  *  If you were unemployed last year and had to pay for health insurance costs (like COBRA), you may find that your health insurance expenses will put you over the 7.5% of AGI that you need to deduct such costs.  This may also be true since your income was probably way down.  Again, take the time to find every expense and check out IRS Publication 502 for a list of other qualifying expenses (eyeglasses, etc.)

I hope this helps.   More tips next week.   Until then, here’s to good planning!

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By Rosemary White, March 16, 2010 6:44 am

I’ll do virtually anything for a good photo.  Despite being acrophobic, several years ago I climbed more than 75 steps to get to the top of Boston Light, the oldest lighthouse in America.  (I’ll add some of those shots to this blog as the weather warms.)  My photo shoot budgets average somewhere between zero and the cost of batteries.   For Annie Leibovitz, the famous photographer, it was lavish photo shoots that, reportedly, put her in a $24 million hole.  She almost lost her home and the rights to all of her 100,000 photographs.  Last week she cut a deal with a private investment firm that will help her market her photographs and manage her debt.  She’s the best example I’ve got of late for why it’s important to have a budget and live within your means. 

That investment firm, Colony Capital LLC of Santa Monica, CA, will be her sole creditor.  In addition to her home, there are two additional Manhattan town houses. The real estate alone is valued at $20 million.  No other details have been released.  I hope Colony Capital can help keep her on track so she can focus on her photography.  Remember the magazine cover with a nude and pregnant Demi Moore or Whoopi Goldberg in a tub of milk?

This economy continues to be very tough for many people.  Cash flow is tight and millions of Americans are still struggling.  Please cut your expenses and keep working to pay down your debt.  Let me know if you need a budget form.   Until next time, here’s to good planning!

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By Rosemary White, March 12, 2010 4:28 am

File this under “Securities and Exchange Commission Looking under Every pebble Since they Missed the big Bernie Madoff Boulder.”  OK, they’re doing their job.   The agency filed a lawsuit last week in U.S. District Court in New York against one Sean David Morton and his wife Melissa, charging them with securities fraud.  Starting in 2006, Morton (a self proclaimed psychic, intuitive consultant, screenwriter and TV producer) told prospective investors he would use his psychic expertise to provide investment guidance to his investment team.  In addition, the suit alleges that he fibbed about his past success in psychically predicting the numerous ups and downs of the market.   He raised $6 million from 100 investors, but, the SEC says, only used half the money to buy the foreign currencies his investors were expecting.  At least $240,000 of investor money was diverted to the nonprofit religious organization that he and his wife run, the Prophecy Research Institute (PRI).

There is no substitute for solid, old fashioned investing principles.  Nobody knows what will happen in the future.  I’m astounded that anyone would hand over any money to someone like Morton.  Here’s hoping the SEC lawsuit ends successfully.  Until next time, here’s to good planning!

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By Rosemary White, March 9, 2010 2:54 pm

I’m used to being in the minority.   Years ago, it wasn’t always so cool.  But now, at least when it comes to alternative energy, I’m hoping us green types will eventually become the majority.  Since signing up for NStar’s Green Program last year, 100% of my household’s electric comes from a wind farm in upstate New York.  I’d prefer a wind farm somewhere in Massachusetts (it’s that Red Sox vs. Yankees thing) but we’re still battling over the proposed wind farm in Nantucket Sound.  That will get sorted out…hopefully soon.  Our cost per kilowatt has been a few pennies more, although I can’t really say I noticed much of a difference on our bill.  We’re on the level billing program since it provides for easier budgeting. 

Of the more than one million NStar electricity customers, fewer than 1% (8,000) signed up for the Massachusetts Green Program since it started in July of 2008.   I don’t think they promoted it nearly enough.   And now, the utility has applied for a rate increase to the Massachusetts Department of Public Utilities citing “rapidly changing energy prices”.  If approved, the rate hike will kick in next month.  Those getting 50% of their electricity from wind will pay an additional 1.52 cents more per kilowatt hour of power, or roughly $7.50.   Those getting all of their electricity from wind will pay 3.04 cents more….roughly $15 per month.   It’s not a deal breaker, as far as I’m concerned, but it may discourage thousands from enrolling in the program in the future.   That’s too bad, since I believe this country has to shift to multiple forms of alternative energy to meet our needs in the future and make us less dependent on foreign oil.   Check with your utility company and see if you can make the switch.  Long term, it’s the right thing to do….like paying more for fresh fruit vs. getting it in cans.   Until next time, here’s to good planning!

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By Rosemary White, March 5, 2010 6:09 am

I get weekly emails from the city where I live, Cambridge, MA.  It’s a great way to keep up on what’s going on and what’s coming up.   Part of last week’s email told of the nearly $6.5 million Cambridge has received from the American Recovery and Reinvestment Act (the stimulus).   I hear plenty of people complaining about the cost of the stimulus program, so was curious where the dough was going.   Here’s some of what I found:

  *   $1,224,854 to improve programs for children with disabilities (and their families)

  *   $380,199 to support and expand the teaching and learning for students at schools in high poverty areas, most at risk of failing to meet the state’s academic achievement standards

  *   $674,070 to improve streets and sidewalks

  *   $162,000 for job training programs

  *  $995,000 for homeless prevention programs.  This consists of financial assistance, housing relocation and stabilization services

  *   $759,600 for a municipal building energy efficiency program

  *   $100,000 for an energy efficiency program an 1-4 unit multi-family homes

Real money affecting real people.   If you live in Massachusetts, check out how much of the stimulus money is coming to your community.  Here’s the link: http://www.mass.gov/?pageID=stimhomepage&L=1&L0=Home&sid=Fstim .   Until next week, here’s to good government and good planning!

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By Rosemary White, March 2, 2010 5:51 am

I love Warren Buffet.   He strikes me as the closest thing we’ve got to Harry Truman, the ultimate straight shooter.  Buffett has been the chairman of Berkshire Hathaway since 1965 and has had an annual salary of $100,000 for the last 25 years.  In a letter last Saturday to his shareholders, he was very critical of those “too big to fail” banks.  According to an article in Fortune Magazine, Buffett said there’s one easy way to fix the problems with these banks:  make sure the high-level execs have some skin in the game by putting their bank accounts on the line.  What a great idea!

Fortune quotes from Buffett’s letter: “It’s the behavior of these CEO’s and directors that needs to be changed.  They have long benefitted from oversized financial carrots; some meaningful sticks now need to be employed as well.  The CEO’s and directors have largely gone unscathed.”  Case in point: Neither of the former executives of Bear Stearns or Lehman Brothers had very much of their wealth tied to their former respective firms as they ran their companies into the ground.   It was the smaller shareholders (and ultimately the American taxpayers) who bore the brunt of the huge losses.

The Obama Administration has proposed separating the banks’ proprietary trading activities from their federally subsidized deposit-gathering and lending.  Others have proposed requiring the banks to hike the amount of money they have on hand to guard against losses.  So far, there aren’t enough votes in Congress to get anything done.  I like Warren’s way.  Until next time, here’s to good planning!