February 7, 2014
Dear Everyone:
I used to wait until the
Presidents Day Weekend in February to do my
income taxes. Typically,
your employer, banks, government agencies and such have until the end of
January to get all the
forms, W-2, 1098, 1099 and the like, to you.
And, naturally, you have until the middle of April to actually
complete and file your tax return.
But I figured why prolong the agony?
Why not just get it over and done with as soon as possible?
Of course, I usually had some money coming back, rather than owing the
Government all that dough; so that was an incentive in itself.
And Presidents Day was the first three-day weekend on which to
hunker down and fill out all the forms.
That was back when I was employed.
Now I don’t have to wait for a long weekend.
In fact, I started the other day, just to get a feel for how much
needed to be done. The tax
software, which I’ve used for a number of years, does a lot of the work
for you. I just had to
convince it that I was no longer employed by Company.
Once that was done it was a simple matter to plug in the meager amount
that I made as a “temporary contractor” last year, a mere $16,687.44.
Add to that the $1399 I got back from the state of
California as
a refund on the previous year’s taxes.
That’s right: The Federal
Government considers a refund to be “income”.
In other words: “I
took money from you in 2012 and gave some of it back in 2013; now I’m
taking it away again because I can.”
Just as legal as church on Sunday.
More income: Interest paid on my
checking account: $4.70.
Interest on savings:
$140.87. And remember those
Savings Bonds that I finally cashed last year?
About $8000 worth?
Turns out half of that was taxable (unless used for college by a child
or grandchild.) That
$4203.72 brought my total taxable income all the way up to $22,000, give
or take a smidgeon. And the
guv’ment will happily take as many smidgeons as they can.
Nevertheless, what with medical expenses (yes!
health insurance premiums
are deductible!) and the usual charitable donations, I’ll be getting a
nice, little refund. Which
the guv’ment will count as income next year.
And then it was on to the California State Income Taxes.
And that’s where it got a little weird.
After copying all the usual suspects over from the Federal
Return, the software started asking about “other sources of income”.
Like: False Imprisonment
Compensation. Seriously?
People get wrongfully locked up, exonerated, sue and win their
case so frequently that it’s considered a “normal” way to make money?
Excess SDI Withholding. Now
I actually ran into that one a few decades ago.
SDI stands for
State Disability Insurance.
When you start working for an employer in California, they
withhold a percentage of your salary for SDI.
If you change employers, like I did one year, moving from one
Operating Company to another within the same Corporation, the “new”
employer assumes that you haven’t paid your SDI and starts withholding
it again. When you do your
tax return the following year, the “extra” is accounted for and returned
as a refund, or credit against whatever else you owe.
Property Lost or Damaged in a Declared
Disaster Area.
This is why you want your state governor to “declare a disaster”
when something bad happens.
The fact that your car’s brakes failed and the car rolled down the hill
and landed in a neighbor’s kitchen doesn’t count.
Hope you had good
insurance.
And speaking of insurance, there’s the
Ottoman Turkish Empire Settlement
Payment issue. I know what
you’re thinking: Huh?
For those of you who weren’t paying attention in History Class, the
Ottoman Empire formed around 1299, give a decade or two.
It covered a lot of real estate and lasted, literally, for
centuries. But, by the
beginning of the 20th Century (the early 1900s for the
time-challenged), it was basically imploding.
However, it was in the interests of certain Western European countries
(read, England and
France) to keep the “Sick Man of Europe”, as the
Empire was known in diplomatic circles, propped up as long as possible.
Why? Because it
neatly hemmed in Russia, much to the delight of England and France.
By the end of World War I, the Ottoman Empire was “officially” defunct
and England and France merrily proceeded to carve the former empire up
into “countries” like
Saudi Arabia,
Turkey,
Afghanistan and
Pakistan, to
name a few, some of whose primary purpose was to, once again, keep
Russia hemmed in.
The government of the newly-formed country of Turkey decided to indulge
in a bit of what today is called “ethnic cleansing”.
Back then it was called
genocide.
In fact, the whole ugly business is commonly called
The Armenian
Genocide. Not that
Armenians
were the only victims, but they could be regarded as the largest group
singled out.
(Important Note: The
Nazis
didn’t invent genocide. They
just “improved the process” to a horrifying degree.)
Fast-forward to about ten years ago when a group of California lawyers
engineered a lawsuit against a number of insurance companies.
Seems a lot of those Armenians had life insurance policies bought
from these companies prior to the “cleansing”.
When they, or rather their heirs, tried to collect, the insurance
companies pointed to some fine print to the effect, “not applicable in
the case of government-sanctioned genocide.”
There is a large Armenian contingent in central California.
The lawyers knew a good case when they cooked it up.
The Settlement with just one of those insurance companies came to
over $20 million.
And those California lawyers knew who to talk to in
Sacramento.
If you are Armenian, or descended from one of the unfortunate
victims, and can prove it, and qualify to get a piece of that
settlement, relax. Your
share is exempt from California State Income Tax.
But not Federal. Go figure.
Love, as always,
Pete
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