Financial Samurai

The Child Tax Credit (CTC) for 2011 and 2012 is $1,000 for any parent or legal guardian with a dependent 17 years or younger.  It’s nice to see the government provide some money back to families with kids, however, I worry about the implications.

In typical government discriminatory fashion, only certain people get to utilize the Child Tax Credit.  These lucky people are singles making $75,000 or less, or married couples making $110,000 or less.  For every $1,000 you make over these two income thresholds, the credit gets reduced by $50.  In other words, if you make $130,000 as a married couple or $95,000 as a single person, you no longer get any of the $1,000 tax credit!

UNDERSTANDING WHY ALL PEOPLE WHO WANT KIDS ARE NOT TREATED EQUALLY

What does it mean when only married couples making $110,000 or less, or singles earning $75,000 or less can get a full $1,000 tax credit?  Logic would dictate the following three reasons:

1) The government only favors middle-to-low income couples who have kids. Read more…

Donating money is a very personal decision. There is no right or wrong amount.  Anything more than 0% is good in my eyes. According to several of the largest charitable foundations, the average percentage a person donates of his or her adjusted gross income is 3 to 5%. Studies also discuss how Republicans donate more on an absolute basis, and the poor donate more on a percentage basis as well.

Doing your own taxes helps you think more about such topics as giving. You start wondering whether you’ve given enough or too much. You look for answers to figure out what is the norm and proceed to adjust within the band. Furthermore, you input different charitable scenarios to see how your tax bill changes. It’s all very educational and thought provoking.

DECIDING HOW MUCH TO GIVE Read more…

Having a mortgage is a wonderful thing.  In fact, I owe much of my work longevity to my mortgage.  When I was 24, I came across a lot of cash due to a couple good stock picks.  I was just lucky, because goodness knows I can’t pick stocks for doodoo.  I never really told anybody how much I had, but it was enough to put 25% down on a median priced home in San Francisco and still have several years of mortgage payments left over.

By my mid 20s I began questioning the meaning of work.  Perhaps I was simply suffering the lesser known “quarter life crisis.”  Because I had arrived at what I considered to be too much money too quickly, working to make more money lost its appeal.  It didn’t matter if I added another thousand or ten thousand to my savings, making money was so uninspiring.  I was demotivated because of a couple chance trades that required very little skill, just a lot of balls.  The great irony is that I don’t need much of anything to live a comfortable life.  Give me some clean clothes and a place overlooking the beach with a hot tub off the bedroom balcony and everything will be OK!

RENTING JUST FEELS WRONG AFTER A CERTAIN POINT Read more…

It’s hard to imagine anyone never getting bullied through grade school.  Inevitably, there’s some immature, insecure kid out there looking to pick a fight.  Do you keep quiet or fight back?  You might be surprised to hear, but I’ve ALWAYS fought back until the bullying stopped.  I’m described as a very cheerful person who is always smiling, but when provoked, you will feel my wrath.

I remember growing up as a kid being taught to just walk away and ignore a bully.  For some reason, I could never listen to that advice.  I didn’t care if I got injured fighting back.  It was what I had to do to defend my honor.  What’s even worse than being bullied, is when you see someone you love get taken advantage of.  That’s when shit really hits the fan!

PERSONAL STORIES OF BEING BULLIED Read more…

Third year political science major, Alexandra Wallace made an offensive video rant against Asians.  She’s now leaving UCLA, which has a 37% Asian population.  Smart, because she’d probably get seriously hurt, or harassed for the rest of her time there if she stayed.

My main question is, how could someone from a good school like UCLA post a public, racist rant on a forum which could attract millions of viewers as a political science major???  Aren’t poli-sci majors supposed to be super careful about their persona if they ever want to get elected into public office?  Maybe not. Look at all the politicians in office we have now.

WHY ARE THERE RACISTS? Read more…

Linda shines at Davis Polk & Wardwell, one of our nation’s most prestigious law firms.  Just eight years after Yale Law School, at the age of 34, Linda achieved her life long dream of making partner. At last I have arrived, Linda first thought to herself, recounting all the hours she spent since high school studying to get perfect grades and a perfect resume. That was five years ago.

One day while working on an important case, Linda walked by the pantry only to overhear her associates whisper about her. She couldn’t quite catch everything they said, but phrases such as, “She’s almost 40,” and “Is she still single?” zinged her ears. Never one to doubt, Linda kept going for the rest of the week. The case is the priority, her mission, if you will. Her clients are fighting a hostile takeover from a competitor, and she and Davis, Polk & Wardwell must defend.

Breaking Down Read more…

Despite what many have advised, I’ve been doing my own taxes for the past 8 years.  Along the way, I’ve cocked things up, such as one time when I forgot to report the cost basis to over $1 million dollars worth of stock proceeds!  For some reason, I just passed over the stock section of the software.  You can imagine my surprise when I got a tax bill from the IRS for over $300,000!  By not putting the cost basis down, the IRS thought I had another $1 million worth of income that I hadn’t paid taxes on.  Instead, I only had about $10,000 worth of extra income since my cost basis was around ~$990,000 (trading is tough and not worth it!).

After scrambling to gather all my stock purchase prices, I submitted everything to the IRS and prayed it was all just a silly mistake.  I gave the IRS folks a ring in Utah to explain what I had sent in, and they were so nice.  The man on the other end said, “Not to worry, we see these types of mistakes all the time.“  Two months later, I got a letter from the IRS saying I owed them minimal interest, and taxes on only my profits of ~$10,000, or about $3,000.  Phew!  Thank goodness.

Lesson learned.  Always report your cost basis and save all records of transactions.  You know I’ll never mess up that section again.  I just told you a story as to why you might not want to do your taxes yourself.  That said, I cherish every learning experience and would do it over again.

WHY YOU SHOULD DO YOUR OWN TAXES Read more…

On Friday afternoon, March 11th, the largest earthquake in Japan’s history hit with a magnitude of 8.9.  The devastation of the tsunami is unbelievable and my heart goes out to the victims and family members of this tragedy, which is still ongoing.

I’m sure many of us would love to do something, anything to help our brothers and sisters out in Japan.  The best and quickest way is to donate money to organizations who have the infrastructure and processes set up to help.

To donate money to the Japanese earthquake relief efforts, please visit the Red Cross’s site here.  You can also donate money by mobile phone to the American Red Cross Relief by texting REDCROSS to 90999.  Every time you text REDCROSS, $10 will be debited to your phone bill and a donation will be made.  The death toll has breached 10,000.

I encourage those of us with blogs, Twitter accounts and any online presence to help spread the word.  Japan needs all of our support right now!

Highlight Posts From Around The Web Read more…