meta-dad

Costco says ‘no go’ to food stamps

Walmart accepts food stamps. Sam’s Club recently changed it’s policy and now accepts EBT cards. The Farmer’s Market also accepts food stamps. Heck, in the state of California select restaurants and even Flea Markets accept them. So why doesn’t the hugely popular Kirkland-based bulk purveyor? It is by no means mandatory and they are a member-only store, they claim that the majority of their business comes from small businesses and upper-income individuals and families. It is arguable that most recipients of food stamps are destitute and/or homeless and are far from a position of covering the basic $50 annual membership fee. But as many families are quickly finding out, it is a short road to the soup line in the current economy. More »

5 things parents should check before filing federal taxes

With everybody rushing to sign, seal and deliver their returns, you will want to take a moment to review recent federal tax changes and perhaps save a few bucks in the process.

1. Increase in investment income amount. The amount of taxable investment income these children can have without it being subject to tax at the parent’s rate has increased to $1,800 for 2008.

2. Adoption Benefits increased. For 2008, the maximum adoption credit has increased to $11,650. Also, the maximum exclusion from income for benefits under your employer’s adoption assistance program has increased to More »

The Homeowner Affordability and Stability Plan and you

On February 10th, the Treasury Secretary, Timothy Geithner, explained how the financial stability plan will be critical in supporting some type of effective economic recovery by potentially curtailing up to $4M in additional foreclosures regardless of what mortgage companies owns or services the loans. But for so many of us well-intended tax paying families and individuals we want to know exactly how it can help us.

This plan is designed to help people who are current on their mortgage but are in danger of defaulting on their loan in the near future due to a high combined mortgage debt compared to income or who is “underwater” (with a combined mortgage balance higher than the current market value of his house), in other words, they owe more than the current value of their house. By government analysis, as many as 6 million families are expected to face foreclosure in the next several years, with millions more struggling to stay current on their payments.

As we know the exact guidelines are going to be rolled out in the coming days. Since there is plenty incentive for both the mortgage provider ($1000 per loan modification/restructure and an additional $1000 per year up to three years, assuming the borrower stays current on payments) and the at-risk homeowners there is a lot of curiosity as to who exactly is eligible. A few things are clear; More »

How does the new California budget affect families

With the Governor wasting no time, he has quickly added his signature to the newly resolved state budget which has closed the $41 billion dollar gap for California. Now that the dust is settling in Sacramento, how will it affect me and my family?

When will the state income tax refunds be mailed out? Who will benefit and who will be laid off? And of course, how will the school systems fair in all of this? So many questions. How will the national Stimulus Plan offset some of these state cuts? I hope to share with you as these details come online.

The financial package includes tax hikes, spending cuts and borrowing billions of dollars more. How will the tax increases affect the average Californian family? Here is the at-a-glance breakdown;

• The are four types of tax increases in the current package; personal income tax, vehicle license fee increase, dependent tax credit and a sales tax increase. Recent legislative analysis of these four tax increases, an average family of four with an annual income of $75,000 would pay $963 more a year in taxes. That’s quite a punch in the gut, to say the least.
• May 19th, 2009 is an important date, mark your calendars. There will be a vote to move $226 million from mental health programs and $608 million from programs aimed at children younger than 5 years old.
• The state ultimately will resume paying all its bills, including tax refunds. But doing so could take weeks, so the exact date when California income tax refunds will start being mailed has not been announced. Mr. Chiang (State Controller), we are waiting with baited breath for your word.

Sited & Related Links:
Los Angeles Times | California Budget Plan; Key Elements
Los Angeles Times | The California Budget: A timeline for the events to come
meta-DAD | California state delays income tax refunds

How the 2009 Stimulus Plan will benefit me and my family

Granted the final Congressional votes are still being worked out, but the $789B Stimulus Plan seems to be well on its way to approval. The biggest question on everybody’s mind (including me) is, “when do I get my check?” quickly followed by, “how much am I getting?” It is clear to me that unlike the Bush Stimulus Plan that was enacted in the waning days of his presidency, the Obama plan is focusing on an array of tax credits for individuals and families, as well as a long list of state and federally programs and projects which are designed to create jobs and shore up state agencies that are trying to manage huge deficits.

The short answer to the first question, “will I be getting a check for this Stimulus Plan?” seems to be “not really,” the benefit to American citizens by-in-large seems to be coming in the form of increases to existing tax credits and new tax credit incentives rolled out over the next two years. Unemployed individuals will get a little more money, and Social Security recipients, poor, elderly and veterans receiving disability or pensions will receive one-time checks, although the amounts do not seem to be finalized (*current estimates provided below).

A bipartisan Congressional Budget Office did an analysis of one of the latest versions of the plan and of all the line items, they point out that of all the money earmarked as “direct payments to individuals” are funds being used in the following categories; More »

California state delays income tax refunds

My wife and I filed our taxes this afternoon, this year we are motivated to get our forms in and get the refunds so we can keep making ends meet. Does this story sound familiar? The punchline at the end of this scenario was when our accountant informed us of a 30 day delay for our 2009 California state income tax checks to be processed. Upon further inspection, this feels a bit like wishful thinking as it is based on reconciling the massive $40B deficit in the budget which has been pending the past few weeks.

It is anticipated that as soon as the cash and budget problems are solved, the refund delay will be lifted. It is clear that part of this stalemate in Sacramento is linked to the Senate approving the current Stimulus Plan. They are linked because recent estimates say the massive stimulus plan will pump $4.5B in projects and tax incentives into California alone. Obviously this will infuse the state with much needed cash and help Sacramento close the gap on the budget.

Meanwhile, my wife and I wait for this financial log jam to clear. To be clear on the implications of this income tax delay that State Controller, John Chiang has employed, this includes any type of return regardless of the year of the return or issue. This is a complete freeze of funds, full stop.

What is looming over our head is that if the 30 days pass without the budget being approved the state has threatened to issue I.O.U.’s. They have only done this twice in the the state’s history; 1992 and the Great Depression.

And if you are wondering if they will issue your refund with interest, yes but only interest accrued after June 1st, 2009 (45 days after April, 15th, 2009). My wife and I have joked that if we have trouble paying the upcoming property taxes in April we should issue the county a I.O.U., it’s only fair, right?

Sited & Related Links:
State of California Franchise Tax Board | State Controller announces delay for tax refunds
Mercury News | Still no deal in California’s budget stalemate
China View | Obama pushes stimulus plan forth as Senate debate continues
The Sacramento Bee | Stimulus plan would give California $4.5 billion for infrastructure

02.20.09 UPDATE: meta-DAD | How does the new California budget affect families