JoeTaxpayer

The budget is out. No, I’m not coming out with my personal budget. It’s a strange mix of stuff on both ends of the spectrum. And I think other people’s budgets are boring, do you really care that my daughter’s dance classes are a priority? I didn’t think so. I’m talking about the budget we should all be interested in, the U.S. Budget. It has something for everyone, and by that, I mean everyone will find something they don’t care for.

In case you can’t sleep at night, Fiscal Year 2015 Budget of the U.S. Government can be downloaded right from the White House web site. If that’s not enough, the Treasury offers an even longer (297 pages vs 218) General Explanations of the Administration’s Fiscal Year 2015 Revenue Proposals. I’m still sifting through both documents, and hoping for a Cliff Notes version that will just list the potential changes to the tax code.

Over the next few articles, I plan to highlight what I’ve found, along with comments on the proposed changes. The first –

Harmonize MRD requirements for tax-favored retirement accounts. – this proposal add an RMD to the Roth IRA account. You might know that the Traditional IRA has a provision in which Required Minimum Distributions must be taken the year after one turns 70-1/2. I found it curious that when the Roth IRA was introduced in 1998, it offered a remarkable feature, no RMDs. This created an amazing opportunity for those wishing to leave a significant sum of money to their heirs, with no income tax bill. Note – the Roth inheritance can still trigger the estate tax, but as the funds are post tax, the beneficiary can withdraw money with no income tax due. This opportunity is scaled back by this proposal, as now the Roth IRA will have a post 70-1/2 RMD for those attaining age 70-1/2 after Dec 31, 2014.

My assessment of the impact of this proposal? Minimal effect. The RMD triggers no tax, nor does it pull in other money, such as Social Security benefits to be taxed (yet). If at 71, I take my withdrawals and invest in a stock fund, I need to deal with the dividends, but the capital gain can remain deferred until I pass. On my passing, my beneficiaries get a stepped up basis, so even if we are talking say, a million dollars, a 2% dividend is $20K, and the tax on it, $4000 maximum. Not a million per year, a cumulative million dollars no longer in the Roth, but taken out over more than a decade. The average taxpayer wont lose sleep over this one.

A few months ago I wrote Rich Habits – Correlation, Causation, and Poverty, discussing the merits of Tom Corley’s book Rich Habits and the validity of studying the difference in what the rich do compared to the poor. Since that time, I’ve observed my 15 year old daughter and how she approaches her schoolwork, manages her time, and still puts charity as one of her priorities. With an invitation to read my Rich Habits article, and to write about what her own habits are, my daughter came up with her own list of ten things the successful teen does.

1. Makes goals, daily, weekly, monthly, yearly, and long term. It is impossible to be successful if you don’t know what you are aiming for. Making large goals is important to see where you want to get. Making small goals is also key as they are simpler to achieve. If your goal is to make the soccer team that may seem overwhelming, but practicing 2 hours each day seems much more realistic. I like to keep a list of my monthly goals taped to the mirror in my bathroom. It’s the last thing I look at before I go to sleep and I the first thing I look at in the morning. It keeps me inspired and motivated.
2. Puts a little effort into how they look. No need to wear designer from head to toe but putting a little effort into how you look can make you feel better. When you feel better you can spend more time working hard and helping others.
3. Uses social media safely and to their benefit. Using social media to post pictures of you partying or drinking is not only inappropriate but colleges and bosses will be less keen on wanting you. Posting appropriate content though, can be beneficial. For example, if you are a dancer post your solos on YouTube, you never know what choreographer may stumble upon them. If you want to have social media for fun, just be sure that if your boss or teacher saw it, you would be nothing but proud.
4. Doesn’t let the little things bother them. If you let getting a B on a history test or not making the basketball team bother you, stop right now. Life is constantly going to throw you setbacks. Learn from your mistakes and move on.
5. Focuses on a few things but does them well. It can be extremely stressful for a teen to be committed to so many activities. Not only can it make them stressed but one will not be able to do any one of them well. Instead focus on a few but train hard and do them well.
6. Work hard in school. Study a lot. Turn in all your homework on time and give 100% effort. Working hard in school is important so you learn how to manage time and master work ethics once making it into the big leagues.
7. Ignores rude people and haters. Don’t let a hater on your Facebook wall or a jealous person in school bother you. Successful people are often the ones that have to put up with the most amount of crap. It stinks, but learn to look at them and laugh….inside.
8. Gives back to the community. You become much more aware and feel better when giving back. Join a club at school or think about where your community could use assistance.
9. They are healthy.  I’m sure you have heard this before but I will repeat it. Eat clean, workout at least 1 hour per day, and get about 8 hours of sleep per night. All of these things will help you to perform better.
10. Stay organized. Keep a to-do list on your phone so you don’t forget to do something. Have a calendar for your events and a agenda book for school. Clean your room each morning or night. If everything is organized you can focus better on the important things.

My daughter offered the title Successful Teen, and asked me if I thought of her as successful so far. I told her that I did, that I thought her habits were mature and the beginning on the path of a successful life. I’d like to find out how many of her friends and classmates have these habits, especially #1, the goal setting. It would be an interesting experiment to find these people in 10 years and if the goal goal setters are more successful than those who aren’t.

What does your teen do to improve herself and succeed?

I’m back today, but with a guest post from my favorite puppy, Scooter –

It’s been a year since I guest posted Feed the People, and I’m sorry that I’m back this year. Sorry that there are still people in this country and within our state who still see this more often than they’d like:

When I see my empty bowl, my family taught me not to bark, because bark is for emergencies. I only need to sit by my bowl and they bring me my dinner, and even seconds if I am still hungry. It’s sad to me that 1 in 10 people struggle to put food on the table. Last year, our online friend, (they say that on the internet no one know if you are really a dog? Well, this friend is just the opposite, a 20-something MIT graduate with a heart of gold) Stephanie the Blogger, raised $2000 in a big event, Project Bread’s Walk for Hunger. My family was between jobs, but still helped out by matching $250 in donations, and helped to promote the event. You know what? A year later, the stock market is up 33%, but the hunger issue is still with us.

This year, I’m asking you to join in, and donate at the Project Bread site. This is what my family will do this year – When Stephanie hits $1000, Joe will donate $500, then at $2000, another $500. Here’s the plan – Joe and Stephanie each have nearly 3000 twitter followers, and hundreds of Facebook and LinkedIn friends. Only one in 10 needs to donate $10 to help raise over $5000 this year. What’s great is that you don’t need to sit and write a check, you can go to the site and make a donation with a credit card. Every bit counts and will help to Feed the People!

Love, Scooter

No, not my fellow US Citizens, I mean Citizens bank. The bank that has my mortgage, equity line, and regular checking. When I found that my health plan qualified me to open an HSA (Health Savings Account) I was pleased to find that Citizens offered an HSA. Was pleased, as in “Is this really the same bank that I’ve grown to know and love for over a decade?”

It started when I opened the account and tried to fund it. When I set up a payment to my Mastercard or Amex, the Citizens Bill Pay offers me a next day payment. The funds are transferred directly to the other bank, for these cards as well as a number of utilities. When I tried to set up the payment into the HSA it became clear that Citizens was going to cut a check and mail it to another location. This was the first sign that I’d fallen into the rabbit hole.

I wait 3 days, and peek at the account. Day 3 there’s a negative $3.50. They sure know how to charge a fee quickly. Day 5, the deposit is there, and I see it cleared my checking account as well. I go to the HSA bill pay service and request a payment cut to a doctor 3 days later. Just so the money would surely have really cleared the account. Next day, I get an email:

Greetings from Citizens Bank HSA Online!
The following electronic withdrawal from your HSA Funding Account account could not be completed for the following reason:
A status or indicator on your account has blocked the posting of this transaction.
Payee: Doc Name Redacted
Transaction date: 02/05/2014
Transaction amount: $175.00

I call the number and am told by the bill pay department that I have insufficient funds. They can’t see my balance as I realized they are a third party, not part of the bank itself. I call the bank. They tell me nothing is wrong, try the payment again tonight. The next day, another bounce, and another two calls with both bill pay and the main bank. The bank insists nothing is wrong, they see my balance. Bill pay says there’s still an issue.

Last night, after the 4th bounce, I ask the bill pay gal if they’d be willing to conference call with the bank. Sure, but bill pay is 24/7, and the bank is just 9-5. At my request, she adds notes so the agent that answers today will conference in the main bank.

This is the 20 minutes it took me to tell my story a 5th time to another agent. To explain why a conference call was in order. To have her come on the line and say “transferring you now.” No. Conference. Call. 20 more minutes and the Bank agent agrees this needs elevation. He understands that somehow the bank is rejecting the bill pay request for debit. Why did it take me 5 calls and nearly 2 cumulative hours to get someone to agree to elevate? Because they needed to be sure something was wrong. At my expense. How long before I hear back? He doesn’t know. I ask him what reasonable amount of time I should set on my calendar before reminding myself to call in to see that all is well? He can’t say. I tell him if I don’t hear back in 10 days, I wont call, I’ll close the account. He says he understands.

What I don’t mention above – the account comes with 2 Mastercards tied to the HSA. Mine works, my wife’s doesn’t. These are separate calls also going nowhere. I remind myself, this is the same bank that paid me $5,000 to buy $50,000 worth of Visa and Amex gift cards. They know it’s me and they are now having their revenge. Who am I kidding? They can’t hand my $1000 from one account to another, they mailed a paper check. They don’t know me at all. And if they don’t fix this soon, they wont know me even less. I suppose after that rant, I owe you a decent article on HSAs and how they can save you some money on your taxes. Working on it. No, I don’t need ten days.

(Update and Conclusion – After my wife’s card was rejected earlier, I called the main dept last night. This time, the agent advised that my account just got funded the night prior. In other words, even though my account showed a deposit on Feb 3, and my Citizens checking showed the withdrawal on that date, the funds were not available to use until 8 days later. This morning I woke up to see that doctor’s check was cut last night and mailed out. Issue resolved.)