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Thursday, February 25, 2010

Where to send IRS Form 433-F

The number one search term on Economic Crunch is 433-F, which for those who don't specialize in arcane IRS form numbers, is the Collection statement for those trying to set up a payment plan with the Internal Revenue Service to take care of back taxes.

Most of those searches also are asking where to send the form. This link on the IRS web site itself, lists addresses for where to file the form based on where you reside.

In my own experience, the IRS lost the form and all the hard-compiled backup materials, so please MAKE A COPY FOR YOURSELF. If you are working with an IRS representative, verify the correct address with him or her as well.

You're welcome. Good luck.

(You can find the beginning of my own IRS nightmare story back here.)

You may also find these links helpful:
"Will Filing a Form 433-F Help?" IRS Problemsolverblog
Using Form 433-F, taxproblem.org
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Wednesday, February 24, 2010

Where does my strength come from?

Woman is stronger than DragonImage by Glamhag via Flickr
Somebody asked me last week where I'm getting the strength to deal with our financial situation.

Strength?  I don't feel strong. I feel like a bowl of grape jelly, sinking to the lowest level possible. After two years of clawing and scratching, it doesn't feel like we've make much progress.

Of course we have. We still have the house--that's the main thing. We're starting to give the kids their childhoods back through creativity and, frankly, asking for help. (I almost wrote "begging" instead of asking. Pride, I suppose.)

My parents grew up in the Great Depression. I grew up in a comfortable middle-class family. My Mom and Dad fought about money all the time, but it was mainly about her not keeping track of her checks or spending more from the joint checking account than she was "allowed" by my Dad. He was a government employee--a military officer, and while that frequently disrupted our lives, we never wanted for necessities.

They are gone now. Mr. Poorhouse's parents are also gone. My sister lives 2000 miles away, and doesn't have time to keep in touch. His sister is closer geographically, but not psychically. His brother is mentally ill, homeless, and estranged. We have no family nearby to help with the kids or to hang out with on weekends. This mythical strength doesn't come from our families of origin.

I'm a regular churchgoer, but I wouldn't call myself spiritual. For me church is about the music. My parents were the same.

I like my job and my manager. I like my employees and coworkers. But they have no clue that any of this is going on, nor would I want them too. Work is almost an escape hatch, but I wouldn't call it a source of strength.

Friends?  I still have my high school and college friends. They are flung to the ends of the country. I enjoy talking with them when I can, and seeing them once a year or so when business takes me nearby. But we can't call our relationships close any more.

I have superficial relationships with online buddies with whom I share interests. Some of them I know in real life, some only in the intertubes. But there's only a limited amount of intimacy in those friendships. 

I know lots of people through my volunteer work, my neighborhood, my kids' schools. These are people that would be happy to ask me to teach Sunday school, bake cookies for a bake sale, give someone a ride, or head up a committee. They wouldn't just ask me to get a cup of coffee, see a movie, or have dinner, or come to a party unless they were trying to sell me Tupperware.

My kids are bright and funny and smart and affectionate. But they are also challenging. Paul is oppositional and moody. Prissy is, well, a pre-teen. I'm trying to make a good life for them. That could be a source of strength.

Mr. Poorhouse is the love of my life. He isn't good with money--he's happy for me to shoulder this burden. He's as beaten down by our situation as I am. He likes nice things, but he has gone without for a long time now without complaining. He's a source of strength. I can only imagine what it would be like if we fought the way my parents did about money.

I have myself, my kids, my husband, and my house. That's what's getting me through today.

No, I don't feel strong. Mostly I feel lonely.
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Tuesday, February 23, 2010

Tax Penalty Abatement: Worth a Try

Fuckin' taxesImage by blmurch via Flickr
Now that the IRS is no longer breathing down my neck (in other words, I'm in a payment plan) I'm beginning to wonder if they would consider abating the penalties they have assessed over the past several years.

According to a post at Financial Web, the IRS accepts 7 excuses for penalty abatement.  Now we're talking. Ever since my college days of talking professors into accepting late papers, I've been the excuse queen.

And I'm not just making empty excuses. I have shown a good-faith effort attempt to pay the debt, and we had extenuating circumstances at the time. (Number 6 on the list:
6. Lack of funds, but only when the taxpayer can demonstrate the exercise of ordinary business care and prudence

The interest and penalties can really add up (one might even say "compound") over time. In the same way that that bargain you put on your credit card can end up costing three times as much, the interest and penalties can dwarf the actual tax owed.

This is yet another example where sticking my head in the sand has done nothing for me.

So, first order of business, 2009 taxes.  Then, the abatement process. Wish me luck.
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Monday, February 22, 2010

Which little piggy? Pay off debt? Or save for college?

Save MoneyImage by voobie via Flickr
So here's a question I haven't been able to work out. My two kids are smart (or I like to think so) and I predict expensive tuition bills in our future, starting in about 6 years.

We have been saving for college (with some help from Grandma and Grandpa) since they were born.  What with the volatility in the markets and in our incomes, there isn't much in those 529 accounts.

We're in serious debt to the IRS, the State Department of Revenue, credit card issuers, business and mortgage lenders. Our current priority is to pay off the tax bills first and then start making a dent in the other debt.

We are contributing about 10% to my 401K plan at work, with a generous company match. (That seems like the right thing to do and keeps the taxes down on our current income).

So a friend of mind suggested that we'd be better off taking the money going to the 529 college savings plans (which grows tax-free) and using it to pay off our back taxes or other debt. That the more money the kids have when they go to college, the less financial aid they will get. We're not paying much into those accounts, but we're paying some, just to keep the habit going.

I've googled about this, but haven't seen it addressed by any of the debt-reduction strategists.

Thoughts?
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Sunday, February 21, 2010

TV Re-Bound

Kicking TelevisionImage by dhammza via Flickr
In past posts (here and here) I have bragged about how much money we saved by cutting loose our TV service provider (cable/broadband/satellite). And we did save money for a long time.

But Mr. Poorhouse, who is the architect of these schemes, recently discovered that we could save money by adding TV service to our Verizon FIOS and phone package. That's right, we will now get hundreds of channels or so of TV plus high-speed internet plus local and long distance phone service for less than we were paying for just phone and internet.

What we have been doing for two years is watching TV on the internet (mostly hulu.com). A resurrected computer is hooked up to our 15-year old TV as a monitor and 20-year old surround sound stereo system. At first, we could watch anything we wanted anytime we wanted. Then the networks started putting restrictions on how long shows would be available, or putting delays between when they aired and when they were available.

But we never watched anything in real time anyway, so that didn't matter to  us. As a matter of fact, since we got TiVO our TV watching habits had changed so that watching TV is a social occasion. Have a comment to make?  Just pause the show. Need a bio break? Pause. No problem.

Well, we ditched the monthly TiVO charge with everything else when we cut back two years ago. But internet TV allows you to do the same thing, so we didn't miss paid TV at all.

Now, I confess, it is an adjustment going back to real-time TV. Yes, we could get a DVR, but we aren't willing to pay the monthly service fee to Verizon. But for a savings of close to $30 a month, I'm OK with losing the pause function.

Besides, Mr. Poorhouse has now hooked up both the Verizon set-top box and the computer to the TV-as-monitor and receiver. So we have the best of both worlds. For less.

You may say it sounds like we watch too much TV, and we probably do. But, given that our entertainment budget is practically nil, it works for us.

What are your strategies for keeping your monthly TV bill down?
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Saturday, February 20, 2010

Proscrastination

MX056S12 World BankImage by World Bank Photo Collection via Flickr
I am such a procrastinator. I got my car inspected on the last day of January. Of course, there was a long line at the service station. Except I'm pretty sure all the other cars in the queue had their inspections expire in January. Mine expired in December.

Why did I wait so long?  I was afraid the car wouldn't pass inspection and so I would face an expensive repair. The car is going on 10 years old, and it's making a jingly sound like something you'd hear on Santa's sleigh.

It's not really logical to put it off, but it's part of my avoidance defense.  I don't have money for a major repair, so if I don't know about it, I don't have to face it, right?

This time, the story had a happy ending. The jalopy passed the inspection. I did a few errands while I waited. So, we're good for now.
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Friday, February 19, 2010

Splurging on a museum trip

Natural History Museum queueImage by jeremy_tarling via Flickr
With thousands of our closest friends at hand, little Paul Poorhouse and I braved our local science museum on Monday during the dreaded school vacation week.

Once upon a time, when we were solvent, we had a membership to this museum. And a membership is a good deal if you have a family of four or more and visit more than once a year.

It's not such a good deal if you're broke, though.

Our day at the museum lasted us from 3pm to 8pm and cost more than $120. For the two of us.

Why so much?  We paid for the museum admission, coat check, a special exhibit, a 3D movie, a snack at the snack bar, parking, and dinner at a diner on the way home.

We could have cut this substantially.

1. We could have used the free museum pass at our local library. Savings: $50
2. We could have packed our food. Savings: $30
3. We shopped on ebay after we got home instead of being at the mercy of impulse at the special exhibit gift shop. Savings: $30 [note: this was allowance money, not mine]

In all honesty, we would have had a much better time if we had chosen a less crowded day, but we wanted to have a special mother/son date, and this was his choice. But it was close, especially in the special exhibit. Not so fun, really.

Anyway, planning ahead would have made a real budgetary difference.
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Thursday, February 18, 2010

Kid skiing--such a deal

SNC11278.JPGImage by bradleypjohnson via Flickr

Mr. Poorhouse and I don't ski anymore. As a matter of fact, the last time we went skiing was the weekend Prissy was, er, made. But we live in an area of the country where skiing is sort of part of the literacy. (That and skating.) But we're too old and fat to take the kids. I'm seriously afraid of falling and breaking something I might need. Mr. Poorhouse never did care for it.

Enter the Girl Scouts. For a price that's cheaper than what we would pay for lift tickets, they have a camp that includes lessons, equipment, and of course, overnight fun. And, they have financial aid, which brings the cost to less than the day camp we would have had to pay during her school vacation. (Although since it is an overnight camp, the cost is not reimbursable from our dependent care FSA.)

Prissy is there now.  She's supposed to have two full days of downhill skiing plus another day of cross-country and snowshoeing. Of course, I'm having some pangs. Is my baby really old enough for her own ski vacation?  Apparently so.

Do your kids ski?  It's an expensive sport. Any tips for holding down costs?
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Wednesday, February 17, 2010

Negotiating camp prices

LegoImage by ianus via Flickr
This post has been included in the Festival of Frugality #218 at Think Your Way to Wealth.  Why not pop over and find some other interesting ideas for the frugal?

I came across this great camp program at a nearby university that I thought son Paul Poorhouse would love. But it was $100 a day. At most, my budget is $250 a week for vacation camp.

But this is a well-known insititution, and I figured I could ask if they have financial aid. It turns out the answer is "no". This particular program is run as a fundraiser. Hmmm.

A funny thing happened though.  The program coordinator e-mailed me back a few hours after giving me this information. Turns out that it was the last minute and the program was underenrolled, so she could give me a $100 discount.

And of course, since this is for a vacation week, it is reimbursable under my dependent care FSA. 

It never hoits to ask.
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Saturday, February 13, 2010

Saving money on eyeglasses

0079Image by Tina P. via Flickr
Alert readers may have noticed that I mentioned my glasses cost $750. Well, as my aging eyes will attest, my near vision correction changes practically every year. That's a steep price--too steep for our budget.

So what did I do this year? I asked my optician (where I've been a customer for 15 plus years) if he could reuse the same (expensive) frames but put in new lenses. I confessed I just didn't have the money for a complete new pair. Plus I've been pretty happy with the rimless hyper-indexed glasses I've had for a few years now.

No problem.  Lots of people are in the same boat, he says. The glasses are now half the price.  And I get a little off for my insurance reimbursement. And I can use my pretax flexible medical spending account.

All good.

Do you have any tips for saving money on glasses or contacts?
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Friday, February 12, 2010

Another day, another scholarship

Children's ChorusImage by Dabe via Flickr
Prissy Poorhouse just found out she got a scholarship to a performing arts camp she wanted to attend this summer. Not only did they waive the tuition, but they are also contributing towards her airfare.

She's thrilled. Me too. I've very aware that this would not have been available without the generosity of people who can afford to contribute to the scholarship fund.

We are lucky the world has such people in't.
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Thursday, February 11, 2010

Credit easing up? Or credit score improving?

Crocus InvictusImage by oschene via Flickr
Just this week I've noticed I've started to get credit offers in the mail again--for credit cards and refinancing the mortgage.

Now one of two things is happening. Either 1) my credit is improving, or b) credit is easing up out there.  The credit card offer I got yesterday actually included a 0% balance transfer offer.  Haven't seen one of those in a long time. (And of course, given my past experience with balance transfers, such a thing sends me running for the hills.)

And mortgage rates are pretty durn low. If my credit score wasn't so bad, I'd be thinking about a refinance myself.

I should probably mention that I have put myself on the do-not-mail list for credit card offers. (You can do that too at https://www.optoutprescreen.com.) But some offers always seem to sneak through. 

Now mind you, I'm not going to be taking out any new credit. I've been there, done that, got the T-shirt (which is now old and smelly).

According to the the recent quarterly survey of banks by the Federal Reserve, credit hasn't loosened up yet. (Reported by Market Watch).

So maybe this is a sign of spring in the winter of our discontented finances.

Have you noticed any changes in the availability of credit?
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Wednesday, February 10, 2010

C.A.R.D law reverses order of credit card payment application--Woot

FirmenkartenImage via Wikipedia











This post has been included in the Carnival of Debt Reduction hosted by Ask Mr. Credit Card
I don't know how I missed this before, but in reading the fine print on my credit card terms and conditions, it appears that now payments will be applied to the highest rate charges first. As you may know, until now, the typical practice of big issuers was to apply payments to the lowest-rate balances.

Here's how it affects me.

I have had a Citibank card for a long time. I never used it for spending, just for balance transfers. I took advantage of a balance transfer offer of 2.99% for the life of the balance some time ago. A year or so later, I did the same thing for 3.99%. And 4.99%.

And then I got into trouble (business bad, husband unemployed), missed a few other payments, and got socked by Chase's universal default clause. You can find the back story here, here, and here. The Chase rate skyrocketed to close to 30%. After no luck negotiating with them to lower it, I decided to transfer the balance to a few other credit cards, including Citbank at something like 8%. But it was only for 8 months, not for the life of the balance.

At the end of the 8-month period, the Citi rate went up to 21.99%. I should mention during this period I hadn't been late on any payments to Citi or any other creditors. And I couldn't do much about it, because I didn't have the money to pay off the whole balance at once, and my monthly payments were going to the lower-interest debt.

But, thanks to the Credit Card Accountability, Responsibility, and Disclosure Act (C.A.R.D), as of February 22, the payments will first go to the higher interest debt. Which gives me  a fighting chance of paying it off.

Polly's Pointers:

1. Check your credit card terms.  Some new fees are coming. Some good things might happen as well.

2. Be mighty careful playing credit card roulette with balance transfers. It's like gambling at the casinos. The house always wins. 

More information:
White House Fact Sheet

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Friday, February 5, 2010

To spill or not to spill, that is the question

One of the problems that I struggle with is how much to tell my friends about what is going on with us financially.  Let's face it, there's a lot of shame in insolvency.

I love and trust my friends and my family, and sometimes I would like to unburden myself and let people know how hard this all is.

But it creates a weird dynamic. People who love us want to fix things. So they end up offering to help, financially.

Don't get me wrong--We need the financial help. But then I start to feel like if I'm honest about our financial woes it looks like I'm asking for money. And frankly, money does weird things to relationships.

Last week, I had dinner with one of my dearest friends. She knows we've been in trouble, and she asked how it's going. And I said things were better (like we aren't getting thrown out of our house, and the IRS isn't taking my whole paycheck) but not great (we don't ever see an end of debt in sight.) I was describing how we had been able to get the kids back into a limited number of extracurricular activities by applying for financial aid. And then right there in the restaurant, she whipped out her checkbook and wrote a check to cover our half of the kids' music lessons this semester. (It was a lot of money.)

Well, I've been wondering where we were going to come up with this money. And here it is. And that was so generous of my friend I started to cry right then and there.

But now I feel like maybe I should have just kept my mouth shut. She's got kids of her own, college educations to save for, car payments to make. I need the money. But does this change our friendship?  It's not a loan. There's no way I can anticipate when I could even begin to pay her back.

Is it strange to feel so weird about something that she clearly did out of love and compassion?

Photo credit: