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Subject: persfin-digest V4 #132
Date: Thu, 5 Mar 1998 16:59:28 -0500 (EST)
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persfin-digest Thursday, March 5 1998 Volume 04 : Number 132
IN THIS ISSUE:
OUR NEW PERSONAL FINANCE WEB SITE IS UP AND RUNNING!
WE NOW HAVE A 24 HOUR/7 DAY A WEEK CHAT ROOM
PERSONAL FINANCE BULLETIN BOARD IS COMING SOON!
ADVERTISEMENT: MCI CONNECT FOR CC:MAIL
Re: Choosing Between Two Goods
Two mortgage payments vs. one?
401k rollover options?
Fair Market Value for Noncash Charitable Deductions?
Re: Cashing Unsigned Checks
Re: Health Insurance for Visiting Scholars to the United States
MCI 9 cent/minute offer
re: family housing after bankruptcy
Re: IDT Net2Phone service
Re: Family Housing After Bankruptcy
Credit Report update question
Re: e-mail quotes
Can you find the catch?
re: buying a house
SFNB Bank Problem
What does anyone know about Mutual Funds?
Best Way to Pay IRS?
====================================================================
IRA KRAKOW'S PERSONAL FINANCE WEB SITE: pfinance@miningco.com
Feature articles, personal finance links, and a chat room (available
24 hours a day, 7 days a week).
Personal Finance Bulletin Board coming soon!
Neither Clearview Associates, Inc. nor Persfin-Digest is responsible for
the content of any Persfin-Digest Sponsor Ad. Posting a Sponsor Ad does
not indicate endorsement of the product or service by Clearview
Associates, Inc. or Persfin-Digest. You're on your own.
This issue is sponsored by:
Oppenheimer Software - An Official MCI Messaging Agency. Features:
MCI Fax Broadcasting Service
MCI Fax Reply Service
MCI Connect for cc:Mail
MCI AutoForward
internetMCI
Lan Access to MCI
Telephone: 800-390-9379
FAX: 800-492-6862
E-Mail: Connect-Sales@mcimail.com
Also sponsored by Wholesale Products. Why pay retail?
The new HP360LX palmtops (Windows CE 2.0 and 8MB RAM) can be ordered.
Price $550 + shipping.
Specialists in HP320LX palmtops - the hot new HP palmtop that runs
Windows CE. Pocket versions of Internet Explorer, Excel, and Word are
included. Connectivity to PC applications. It's in stock and
orderable. Price: $470 + $15.95 shipping (in USA).
Check out our ProScan wide screen TVs and satellite receivers!
Motorola 56KB MobilSURFR PC Card/Fax Modem with Cellular capability -
$189.99
Visit our PAL/NTSC/SECAM electronics site, featuring VCRs, converters,
TVs, appliances, etc., geared to the international marketplace, at:
http://www.wholesaleproducts.com/non-usa.html
Calculators:
HP 48GX: $177.00 + s&h
HP 48G: $ 90.00 + s&h
HP620LX color palmtop with Windows CE 2.0. $850 + shipping.
Visit our newly updated and expanded Web site, at:
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Special Orders: wholesal@shore.net
Phone: 1-617-438-8622 (24 hours)
Fax (24 hrs): 617-438-8307
For information on placing a Persfin-Digest Sponsor Advertisement, e-mail
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====================================================================
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----------------------------------------------------------------------
Date: Thu, 5 Mar 1998 16:21:10 -0500 (EST)
From: The Editor <ikrakow@shore.net>
Subject: OUR NEW PERSONAL FINANCE WEB SITE IS UP AND RUNNING!
Big improvements have arrived at Persfin-Digest. We now have our
personal finance Web site at:
http://pfinance.miningco.com
I have become the Mining Company Personal Finance Guide. I have moved
many of the links from our former site at:
http://www.tiac.net/users/ikrakow/pagerefs.html
to the Mining Company site. You'll see them organized under "Net Links".
In addition, I have written two articles, one on bonds and the other my
musings on Ben Franklin's motto "A penny saved is a penny earned". I
would like to solicit articles from you, highlighting your areas of
expertise. Although I cannot provide any compensation, I will include a
link to your Web site (if any), and your biography, with your article. I
will edit the article and link to it as the weekly feature. Articles are
archived weekly as well, so we can create a library of personal finance
information. You must relinquish the copyright of the article to me and
the Mining Company.
So check out the site, and send me your comments.
Ira
------------------------------
Date: Thu, 5 Mar 1998 16:23:11 -0500 (EST)
From: The Editor <ikrakow@shore.net>
Subject: WE NOW HAVE A 24 HOUR/7 DAY A WEEK CHAT ROOM
As part of the Mining Company personal finance site at:
http://pfinance.miningco.com
we have a 24 hour a day, 7 day a week chat room. It's available to all of
us. I plan on scheduling guest speakers in the chat room (we also have a
calendar that I can post these events to), with chats centered on personal
finance topics. If you're interested in hosting a chat, please email me.
Ira
------------------------------
Date: Thu, 5 Mar 1998 16:25:03 -0500 (EST)
From: The Editor <ikrakow@shore.net>
Subject: PERSONAL FINANCE BULLETIN BOARD IS COMING SOON!
In about a week, we will have access to a bulletin board at:
http://pfinance.miningco.com
I need to take Bulletin Board Administrator training before the bulletin
board will go live. After that, I will announce the availability of the
bulletin board. Hope all of you can post your questions and answers.
Ira
------------------------------
Date: Thu, 5 Mar 1998 16:32:24 -0500 (EST)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
Subject: ADVERTISEMENT: MCI CONNECT FOR CC:MAIL
MCI Connect for cc:Mail
From cc:Mail
To the Rest of the World
A Native Mode, Router to Router Link
Global Accessability
Secure:Helps Keep Hackers Out of Your Network
Ideal for MultiOffice & Dispersed User Applications
Uses Existing cc:Mail Client-No User [re]training Needed
Supports Windows, Mac, DOS and OS2 cc:Mail (LAN and Mobile)
No Gateway Software Used-You already Have Everything You Need!
Includes:
Internet E-Mail
X.400 E-Mail (Secure, Private, Trackable e-mail)
Fax Delivery (Alternate Delivery Option Included)
Telex, Pager and Postal/Courier Hardcopy Options
Internet Vanity Domain Name Option Available
Oppenheimer Software Authorized MCI Messaging Agency
Tel:800-390-9379 E-Mail:Connect-Sales@mcimail.com
Fax:800-492-6862
------------------------------
Date: Thu, 5 Mar 1998 16:34:55 -0500 (EST)
From: "L. Chen" <am302@freenet.buffalo.edu>
Subject: Re: Choosing Between Two Goods
> .............................
> To give an example: my husband and I would like to do some
> repairs and renovation on our house. However, we have a first
> mortgage that precludes us from obtaining a second. Refinancing
> will wipe out the equity we've managed to accumulate in order to
> "cash out", which we'd be OK with, IF it didn't mean $4000 in
> junk fees, appraisals, and points. It hardly seems worth taking
> back $6,000 of debt on the mortgage, for the privilege of $1600
> worth of cash out.
Check with you current lender. May be they can refinance with minimal closing
costs.
> So, we save out of current income. However, we've recently done
> some retirement projections, which tell us we need to be saving 10%
> of our combined gross salaries in order to retire comfortably.
> We're currently only saving about 8% (and neither of us have
> matching funds or stock options to worry about).
>
> So, if we max out our saving, we accomplish a long-term goal
> of retirement. But it means we have no funds for our short-term
> goal of house improvements.
>
> I'm overwhelmed -- if we save for retirement, that's good. But if
> we improve the house (which we hope to sell within 3 years) we sell
> for more money. That's good too. How do you choose between two goods?
>
> Sandi R.
According to what I read, improvements generally increase your house value by
less than what you put in. And when you say you expect to sell for more money
in 3 years, I assume you mean that "more money" is more than you put in for
improvements.
You should also estimate what you could sell you house for in 3 years without
the improvements. That tells you whether it is worth it to put in those
improvements -- especially if you are going to sell in 3 years.
If it is worth it to put in the improvements, then you need to determine
whether your can use the higher sales price to add to your retirement savings
- -- that depends on why you will be selling in 3 years. If you can, then you
have achieved both your short-term goal and on your way to your long-term
goal.
Chen
------------------------------
Date: Thu, 5 Mar 1998 16:39:40 -0500 (EST)
From: "Robert Loeser" <Robert_Loeser@medec.com>
Subject: Two mortgage payments vs. one?
I just received a letter from my mortgage company offering to enroll
me in a program where I would pay 1/2 of my mortgage payment on the
first of the month and the other 1/2 on the 15th of the month. They
claim that this will allow me to build equity at a much higher rate,
pay off the loan 9-10 years earlier, and pay about 1/4 less interest
over the long run. Enrollment includes a one time fee of about $300
and monthly fees of $5. Any comments?
------------------------------
Date: Thu, 5 Mar 1998 16:41:07 -0500 (EST)
From: BD323 <BD323@aol.com>
Subject: 401k rollover options?
I have a question about a 401k rollover and the options I have.
In Sept 96, I changed jobs and the company I was leaving gave me the
option of leaving my 401k account with them. I did this as I was at the
time paying off a small loan I had taken from my 401k and did not have the
cash to pay at the time.
I realize this is unusual but I was assured by HR that this was
acceptable the way this plan was set up.
In late 1997, about the time I did save the money to pay off the loan, it
was announced that management of the entire 401k program was going to be
transferred to Vanguard and Vanguard's funds would be available as
options for the plan. During the time of transfer, (about 4 months) loan
payments were made but paying off the loan and other options were not
allowed.
This last week, the transfer was complete and I would be able to pay off
the rest of the loan. This would give me 3 options:
1) Leave the 401k where it is with Vanguard, but still offically a
401k under my ex-employer
2) Roll it over to an IRA with Vanguard or another mutual fund company
3) Roll it into the 401k I have with the company I work for now. This
401k is administered by T. Rowe Price.
Any comments on which might be the best option would be appreciated.
Bob
------------------------------
Date: Thu, 5 Mar 1998 16:42:09 -0500 (EST)
From: "Raphael Johnson" <rjohntwo@ix.netcom.com>
Subject: Fair Market Value for Noncash Charitable Deductions?
I seem to remember a discussion around here lat year about a book that
contained Fair Market Values for most of the goods one would typically
donate to Goodwill or the Salvation Army. I also believe that the book
was updated annually. Can anyone remember the name of the book or the
author?
------------------------------
Date: Thu, 5 Mar 1998 16:42:42 -0500 (EST)
From: Steve Brodeur <sbrodeur@draper.com>
Subject: Re: Cashing Unsigned Checks
>the procedure for guaranteeing an unsigned check is:
>
>Write "over" on the signature line;
>Endorse the back of the check with "lack of signature guaranteed"
>followed by your signature, name, title, company, account number.
What is the guarantee provided by this procedure? Does this mean that the
person presenting the check is guaranteeing that the person who wrote the
check really meant to sign it, and will not contest the check? If the
person who wrote the check later contests the check, what happens? Is the
person who cashed the check (who guaranteed it) now responsible for any
costs or consequences beyond the amount of the check itself (for example,
bank fees for reversing the credit, like a check returned for insufficiant
funds)?
- -Steve Brodeur (x2496)
------------------------------
Date: Thu, 5 Mar 1998 16:43:13 -0500 (EST)
From: Avrum Lapin <avrum113@cyberg8t.com>
Subject: Re: Health Insurance for Visiting Scholars to the United States
>From: Marc Bremer <bremerm@ic.nanzan-u.ac.jp>
>Subject: Health Insurance for Visiting Scholars to the United States?
>
Health Insurance with large deductables is available in the US. Most of the
Blue Crosses offer this as well as other companies. The presumption is that
you and yourfamily are in good health. Expect to pay for 3 to 4 months
premiums in advance.
If you will be staying in a single location then many insurance agents
(listed in the yellow pages of the phone book) sell health insurance.
Premiums are age and location dependent. If your sabbatical will be spent
at a University their personnel department may be able to assist you.
If you intend to be nomadic then I suggest that you approach a large travel
agent in Japan (possibly American Express) and see what is offered to
Japanese citizens who intend to travel extensively in the US.
Avrum Lapin
Upland., CA
------------------------------
Date: Thu, 5 Mar 1998 16:44:14 -0500 (EST)
From: rpalma@msai.mea.com (Peter Palma)
Subject: MCI 9 cent/minute offer
Since phone rate discussions have been in the digest recently,
I thought I'd point out that MCI has just started a
new program.
It's 9 cents per minute 24 hours per day except for Sunday
which is 5 cents per minute for US interstate long distance.
There is a $5 minimum per month so if you use less than $5
of long distance in a month, they charge you $5 rather than
what you used.
The rate is only available if you sign up online.
I believe you have to sign up from your home number (not sure).
The program started Monday.
The web address is
http://www.mci.com/aboutus/products/netsavings/overview.html
------------------------------
Date: Thu, 5 Mar 1998 16:45:30 -0500 (EST)
From: stockr1@juno.com (Russ Stock)
Subject: re: family housing after bankruptcy
Mark Kaplan writes:
.She makes $50,000 a year salary from her job
she has had over 3 years. I have taken a new commissioned sales job and
made only $11,000 in the last 8 months. I do not know if this will
improve, which I suspect it will ,or whether I need to find another
position.
Advice sought: We are now faced with having to move.We need a place that
has at least 3 bedrooms and we wonder what to do.
Our monthly expenses total about $2000 ( we currently live rentfree but
pay all the utilities etc,), and on an after tax basis we have about
$750 a month le ***********************************************
Mark,
as a mortgage lender, I suggest you rent for another year (surprised???)
pay off all debt, then save money for a modest downpayment (you really
only need $6000 or so for downpayment and closing costs), by waiting
another year, you will have more time to accomplish this, and TAKE YOUR
TIME. According to my calculations, you could afford approx. $1470/mo
(based on your numbers), for a house payment, but with a new commissioned
job, you normally need 2 years of history at the job (or related jobs)
which will be averaged after expenses for your income.
Take your time, and do it right.
Russ Stock
Mortgage Banker
Stockr1@aol.com
------------------------------
Date: Thu, 5 Mar 1998 16:46:20 -0500 (EST)
From: Jamester <jamester@alumni.eecs.berkeley.edu>
Subject: Re: IDT Net2Phone service
Persfinners:
Let me put in my 2 cents re: Net2Phone calling card service from IDT. From
what I understand, this is a prepaid calling card offer (correct me if I'm
wrong) Yes, you will be able to make a call anywhere in the U.S. for 5 cents a
min, 7 days a wk 24hrs a day, which is 50% less than the current cheapest rate
anywhere. But before you sign up, please do check with their customer service
rep and see if your town or city is being served by IDT.
For example, I live in Walnut Creek, which is a good 20-25 mins from San
Francisco. S.F. is covered by IDT, W.C. is not. You would figure since I'm in
the 'burb I would get the same deal? Well apparently not. I would have to pay
13 cents/min for their service while with MCI right now I get 12 cents/min.
And if I do want to get the nickel a min rate I have to drive to S.F. and call
from the payphone.
Anyways, just buyers beware..
James
------------------------------
Date: Thu, 5 Mar 1998 16:47:44 -0500 (EST)
From: Sarah Glenn <seglen0@pop.uky.edu>
Subject: Re: Family Housing After Bankruptcy
>From: "Mark Jay Kaplan" <mkaplan@execpc.com>
>
>We have no down-payment saved and must move during the summer. Should we
>rent or consider buying? We can purchase a very small home in our area
>for $110,000 or a lot nicer for $150000-$175000. We think we can and
>qualify for the mortgage really on her income alone, I figure we can
>spend $1000-$1500 a month.It will take me two more months to be
>completely out of debt, or should I pay the $400 a month to be current
>and save for the downpayment. At any rate, we would be hard pressed to
>come up with 10-20% downpayment, but if we rent can we really expect to
>save enough, with rising home prices , expenses etc., to be better off
>next year?
- ------------------------------
Mark:
I am in the process of purchasing my first home, so I definitely can
sympathize with your situation. My thoughts on the subject: if you're
paying $400 just to be current, you're not out of the woods yet with your
debt. I think you should also be more sure whether you are going to stay
in your current job or not before taking up a major investment like this.
Another note: even if your wife's income is enough to cover a decent
home, the bank will probably add your income and debts in with hers before
deciding what size mortgage she can support. It may move her into a
higher risk bracket and reduce the dollar amount they are willing to give
her.
Hope this helps,
Sarah G
------------------------------
Date: Thu, 5 Mar 1998 16:48:46 -0500 (EST)
From: Julie Kopjoe <jakopjoe@scripps.edu>
Subject: Credit Report update question
I have a question about credit reports. It may have been covered before
but I can't find the archives of the digest on the web anymore and I
wanted the most recent information.
Recently my husband purchased a new car. When the dealer ran the credit
report we were really surprised since it had a lot of information that
was incorrect. It showed old accounts that have been "closed" (unused)
for a long while (since the 80's), open accounts for companies such as
Sears that we requested close the account, and old companies that no
longer exist - they were bought out and the credit was transferred to the
new company we have now. The accounts we have requested be closed
recently do show CLOSED by customer and paid in full. The report was
still satisfactory, but it showed he had a lot of credit available that
we never intend to use.
What is the best and most effective way to get this incorrect information
updated and corrected so when we buy a house in a few years we won't have
this incorrect information on his report? Do you contact the credit
bureau in your area or one of the "Big 3" companies to get the
information corrected? What would the "ideal" credit report show? In
other words, what do we want the report to show (for example, some
accounts showed "closed as requested by customer "and some said
"inactive" but they were both suppose to be closed). Thank you.
Julie Kopjoe
jakopjoe@scripps.edu
------------------------------
Date: Thu, 5 Mar 1998 16:49:28 -0500 (EST)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: Re: e-mail quotes
> Does anyone know of any free services that will send you an e-mail if
> a stock you want trades at a predetermined price?
>
Two of the better free email services are located at:
http://www.infobeat.com.
and
http://www.mworld.com
( go to /Portfolio / Alerts..I think)
>From time to time you might also check interesting investment links at:
http://www.freeyellow.com/members/assetatlanta/
Good Luck!
- -Randy
------------------------------
Date: Thu, 5 Mar 1998 16:50:19 -0500 (EST)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Can you find the catch?
I got an offer in the mail today for a credit card that offers
$100 just for getting the card. I assume that there is some catch, but
I can't figure it out. It says that there is a 25 day grace period
when the account is paid in full, and there is no annual fee. It is a
VISA "platinum" from Providian Bank.
In the fine print, it says "We will pay you a $100 reward for
trying all the benfits of this Platinum account, which simply means
you must charge and transfer minimu amounts to your account once it is
opened."
Can anyone tell me what the catch is with this?
-David Martin
------------------------------
Date: Thu, 5 Mar 1998 16:54:04 -0500 (EST)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: re: buying a house
>From: Nikhil Subhash Sarpotdar <nikhil@mozart.ee.umn.edu>
>Subject: House Buying advice.....
>Hello !!
>I am in the process of buying a house (actually a Condo). My city
>has a program in which it loans an amount interest free of $ 30k towards
>purchasing your home. This program is geared towards the first time home
>buyer.
>All the details of the program are pretty good. The loan has to be
>repayed between 5th and 15th year (interest free). However there is a
>"shared appreciation" clause that I think is the catch.
>Specfically the city in lieu of the interest on the loan wants a
>share of the appreciation at either sale/refinance or the end of 15th
>Year, whichever is earlier, in the same percentage as the loaned
>amount to the purchase price.
>eg:- purchase price is $ 180k, then city wants 1/6 th the
>appreciation.
>All though I am inclined to accept the program, I was wondering if
>the pros on persfin have anything to say on this.
>Thanks and have a nice day.
>Nikhil
NIKHIL
Find out what happens if the home DOES NOT appreciate and who determines
the value at the end of 15 years.
Also find out
1) If the loan can be assumed by a new buyer.
2) Is the home the only security for the loan or can you be help personally
responsible for the debt?
3) Do you have to live in the house the full 15 years?
4) Is this loan cleared with the IRS as to imputed interest? I am not a
tax pro but on some loans in the past, the IRS said part of any loan
payment was interest even when the note stated it was a no interest loan.
GOOD LUCK
BOB FORD
BOB_FORD@COMPUSERVE.COM
------------------------------
Date: Thu, 5 Mar 1998 16:55:08 -0500 (EST)
From: rfrego@mail.tel-net.com
Subject: SFNB Bank Problem
As many of you know I have been trying to recover $750.00 that was sent out
by the Treasury Department over 9 months ago to my SFNB account. SFNB
adamantly denied receiving the check. The Treasury department said not only
did SFNB receive the check but they cashed it. I sent SFNB a note months
ago, and complained to the BBB. In the notes, I told SFNB that I am
charging the same interest rate that they are charging customers who borrow
on an SFNB credit card.
Today, an acknowledgment was sent by the bank president as listed below. My
online SFNB account shows a deposit for $750.00 with a transaction memo
dated July 1998 Military Allotment, deposited on 4 March 1998.
I sent an email stating that I do not accept this as paid in full. They
still owe me the interest, an accounting for what happened, and a letter of
apology for their repeated denials.
Here are a few quotes for the bank president:
1/22/98
"We do know that from this side, it did not come through our doors nor was
it processed mistakenly from everything we are looking at here. "
3/4/98
"You should be hearing from someone today or tomorrow. I believe that we
have determined what happened and are rectifying the situation as you have
requested."
I am still rather disturbed that they can play with an individual's money
like this and not feel compelled to issue an immediate statement of facts
or accounting as to what happened. I have been playing ping pong with these
folks for over nine months.
They obviously received the check, even after numerous denials, or they
would not have deposited $750 in my account yesterday.
If anyone has time, I would appreciate you sending an email to the SFNB
Bank President encouraging him to disclose exactly where that money was
over the last nine months. His email address is:
Eric Hartz <hartz@sfnb.com>
Thanks for listening. This has been a very frustrated period, but it looks
like the ping pong match is almost over. I feel bad because I have been
complaining to the Finance Folks because SFNB numerous claims that they did
not receive the check. Now it apparently turns out that they not only
received it, but cashed it. I just want to know where that money was, and
if anyone was profiting from it in the last nine months.
Have a good one,
Rodger
------------------------------
Date: Thu, 5 Mar 1998 16:56:50 -0500 (EST)
From: Mark Ollendorff <mollendorff@cybernautics.com>
Subject: What does anyone know about Mutual Funds?
I wanted to let list members know about happenings on the Money Online
website (with whom I work.) It is a great resource for knowledge and
learning about business issues and finances. For instance, a great part of
the site is the Mutual Fund IQ test. Did you know the results of a new
poll conducted by Money and the Vanguard Group suggest that investors
should spend less time congratulating themselves and more time boning up on
the ABCs of investing? There is a new section on the website that talks
about the results of this very interesting test. When we gave 1,555 fund
investors nationwide the Money/Vanguard Mutual Fund Literacy Test -- 20
basic questions about investment risks and strategies -- they managed an
average score of just 51 out of 100. Paradoxically, investors who told our
pollsters that they owned bond funds fared even worse on most of our
bond-related questions than those who held stock funds. That sees a bit
dismal. Even by today's standards, that's a failing grade.
You can even test yourself and see if you know more about investing than
your portfolio manager. There are also some great articles discussing
significance of this finding.
If you are unsure which mutual funds meet your investment objectives,
another section you may want to check out Money's 1998 Ultimate Guide to
Mutual Funds.
(http://www.pathfinder.com/r0/money/ml/in?/money/funds/index.html)
Not only does it list the top 50 stock and bond funds, Money also lets you
search through its database of 7,500 stock and bond funds for ones that
best meet your needs. Utilizing Money's 28 search factors, you input the
kind of funds you are looking for (i.e. stock, bond, aggressive, small
- -cap, financial services, high tech, etc). Money then provides you an
individualized list of funds that meet your requirements.
Just thought everyone could learn from some of the information available.
I hope you find it as interesting as I do.
- -Mark
------------------------------
Date: Thu, 5 Mar 1998 16:57:41 -0500 (EST)
From: JSpencer <antsmom@earthlink.net>
Subject: Best Way to Pay IRS?
Last year, my husband (who is 62) and I withdrew $25,000 from our (his)
roll-over IRA in order to purchase a used Motorhome and to pay off some
credit cards. I asked the fund company (Vanguard) to withold federal taxes
(didn't even think about Calif. state taxes) and they withheld almost
$4,000 for fed taxes.
At the time, I was not working and we expected my husband's income from 2
part time jobs for the year to be around $30,000. Unfortunately <g>, I
returned back to work and our combined income for the year ended up to be
around $48,000. I had arranged for additional fed taxes to be withheld
from my salary, but my husband admited he hadn't.
What a surprise to us when we found out that we owed both the IRS and
Calif. Franchise Tax Board a total of $4,000.00!
Apparently, the way I understand this, the $25,000 we removed from our IRA
became part of our gross income for the year which forced us into a higher
tax bracket (many of your are probably saying "duhhhh"....) OK - so a
lesson learned the hard way!
We are being advised to just pay off the IRS by withdrawing the monies
(again) from our IRA (and have extra withheld to cover taxes for next year)
- -- but this doesn't fit right with me.
Other options would be taking a cash advance (no fee) from a credit card at
12% interest and making monthly payments of $500.00 until paid off or
paying the IRS $500.00 month until paid off. (How much would penalties be?)
Could someone help me determine the best way to pay off my debt to the
government?? Thank you soooo much in advance!
Janet Spencer
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End of persfin-digest V4 #132
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