Last-Minute Tips for Filing Your 2012 Tax Return

by John Kiernan on April 9, 2012

2012 TaxesIt’s getting to be that time. April 17 (i.e. tax day) is nearly upon us, and as was the case in school, such a major deadline is inevitably met with a bit of procrastination. Luckily for those of us who’ve put off preparing our tax returns, CalCPA has some Cliff’s Notes of sorts that will help get them filed correctly, on time, and with the greatest possible savings. The Internal Revenue Service is not going to accept the trite “dog ate my taxes” excuse, after all.

  • State Tax Refunds: Don’t make the mistake many taxpayers do by blindly reporting prior-year state tax deductions as income in the current year. Even if the state taxing authorities notified you of your refund, they have no idea whether that refund is taxable. If you didn’t benefit from a state tax refund on your 2011 federal return (e.g. if you took the standard deduction or deducted for sales taxes instead of state income taxes), then your refund might not be taxable, either in part of in full.
  • Unnecessary Itemization: Many taxpayers assume they’re better off itemizing expenses, but those who have already paid off a mortgage or who live in a state without an income tax might be better served just taking the standard deduction.
  • Alternative Minimum Tax: Trying to figure out whether this type of income tax is applicable can be confusing, but you could wind up being on the hook for penalty fees and interest if you mistakenly don’t account for it. The IRS has an online Alternative Minimum Tax (AMT) Assistant that can help you make this determination.
  • 2011 Carry-overs: You can often deduct losses from previous years (e.g. bad stock choices) on your current year’s taxes.

Logistical Tips
In addition, CalCPA has some basic logistical tips that may seem obvious but can easily be overlooked with the filing deadline looming:

5 Most Common Tax Questions

by Guest on April 5, 2012


It seems that it’s always the little things that create uncertainty in the tax world. Here are some of the questions that commonly plague taxpayers, and the answers they seek.

Do You Know What Your Bank is Charging For?

by John Kiernan on April 4, 2012

When you were in school, did you ever have one of those dreams where you slept through an exam or woke up one day to find that you’d been registered for a class all semester, yet had done none of the work and were bound to fail? Well, the personal finance equivalent recently befell me, only it wasn’t a dream.

I discovered that for 18 months my bank had been charging me interest for a checking account overdraft I was unaware of, and as a result, I had already paid more than $150 in interest. Now, it’s important to note that I am not writing this because I have an axe to grind (the charges were eventually waived), but rather to enlighten others who may fall victim to the same sneaky practices.

Anyone Have a Clue When it Comes to Blue Insurance?

by John Kiernan on March 28, 2012

Blue Cross Blue Shield Insurance ConfusionDo you know who your insurer is? This is neither a trick question, nor a bungling of the famous 1970s parenting PSA. Rather, it’s an honest question that I’d hazard to guess a large segment of the 100 million consumers under the Blue Cross and Blue Shield umbrella would be unable to answer due to the confusing corporate structure behind this association.

I mean, do you know the difference between Anthem Blue Cross Blue Shield, Blue Cross Blue Shield, Blue Cross Blue Shield of Illinois, Premera Blue Cross Blue Shield, and Blue Cross Blue Shield of Nebraska? Probably not, but don’t feel bad.

Occupy Wall Street & Credit Score Reform

by Odysseas Papadimitriou on March 21, 2012

Credit Score ReformYes, the whole Occupy Wall Street thing seems to be losing a bit of steam, but did you hear about the changes the organization’s Alternative Banking Group proposed we make to our nation’s credit reporting system? They want a major overhaul, one that shifts credit scoring duties to the federal government, and they have issued a list of 10 recommendations for how this should be brought about. I’ll give you the highlights: full transparency is needed in regard to how credit scores are calculated, consumers should have free and unlimited access to their credit reports, conflicts of interest related to credit scoring bodies should be eliminated, and we should make sure that credit reporting practices are not somehow racist, sexist, etc. So, do they have a point?

Certainly, the credit scoring system needs to be fixed, but not necessarily in the manner recommended by the Occupy Wall Street Alternative Banking Group. You see, the group is dead on when it says that the new Regulation V (Fair Credit Reporting Act) is inadequate in that it merely transfers the authority to regulate the collection and use of consumer credit reporting data between federal agencies (from several different agencies to the Consumer Financial Protection Bureau). However, the Occupiers are off-base in suggesting that we centralize credit scoring and make the underlying formulas public. This would only make it easier for people to game the system, which would make existing credit scores less useful to banks and lead more of them to create their own proprietary scores that consumers would have no way of accessing.

BP Makes a Mess of Its Credit Card

by John Kiernan on March 7, 2012

We all know the old saying, “If it aint broke, don’t fix it.” Well, everyone except BP, which appears to have gotten this idiom backwards because they seem unable to stop breaking good things. First the Gulf of Mexico and now the BP Credit Card, which used to be one of the very best gas credit cards before changes to the offer effective March 3 turned it into one of the worst.

Of course, BP should not be alone in shouldering the blame, as Chase – the issuer of this once-great co-branded credit card – is also complicit in its downfall. Regardless of who exactly is to blame, what is now abundantly clear is that BP is losing a significant strategic advantage over its competition. The credit card bearing its name is no longer a draw, but is instead an example of everything that is wrong with corporate rewards programs.

No Balance Transfer Fee Credit Cards Are Back, But Are They Here to Stay?

by Odysseas Papadimitriou on February 22, 2012

No Balance Transfer Fee Credit CardsRemember the good old days when free balance transfer credit cards – you know, the ones with 0% balance transfer rates and no balance transfer fees – were in abundance? We all thought such credit card offers went the way of pay phones and Polaroid film once the CARD Act took effect, as this law prohibited the type of “gotcha,” hair-trigger pricing that allowed issuers to make money off cards without obvious revenue-generating features. However, Discover and Chase recently resuscitated the free balance transfer with a pair of new offers, a development which begs the question: Are they here to stay?

A changing credit card environment
Back in the old days, credit card companies were able to offer cards with 0% intro rates and no transfer fees because such features largely served as bait soon to be followed by a switch. You see, issuers knew that a very high percentage of customers who opened such cards would inevitably miss a payment by a day, exceed their credit line by at least $1, or mistakenly use the card to make a purchase, allowing them to implement penalty rates and fees as well as an unfair payment allocation policy that forced consumers to pay off their highest-interest balances last.

Do You Have to Pay Taxes on Your Rewards?

by John Kiernan on February 8, 2012

Initial rewards bonuses have been all the rage in the personal finance world ever since economic recovery began following the worst of the Great Recession a couple of years ago. Banks across the country have been using bonus cash, points or miles – given in return for account opening or spending a certain amount in the first few months – to lure some of the best consumers into using their products and services. The benefits of this strategy were obvious: banks got a more consistent customer base and consumers got hundreds of dollars in free money to play with. But with tax season rolling around, the rage inspired by these initial bonuses has been less about popularity and more about actual anger. You see, as it turns out, things like airline miles, hotel points and cash back could actually be taxable!

Uh, what? That’s right, as first reported by the LA Times’ David Lazarus, Citibank has been sending 1099 forms to customers who took the company up on promotional deals offering thousands of American Airlines rewards points in return for opening a checking or savings account. Since Citi values these points at 2.5 cents each (despite the fact that they’re only worth 1-2 cents through redemption), consumers who opened a new bank account thinking they’d get a couple free flights are instead being handed bills of up to around $262.50 payable to good ole’ Uncle Sam. Exactly how much you owe the IRS depends on how many points you were given and what tax bracket you’re in, but perhaps even more concerning is what Citibank’s tax surprise means for rewards in general. Are all rewards taxable, even those tied to rewards credit cards? Or is it limited to account opening throw-ins? If so, how significant must a gift be to be taxed?

Medical Tourism: Will you be paying in cash, credit or airline miles?

by John Kiernan on January 18, 2012

medical tourism using airline milesWhile renting the Hangover II is probably the closest most of us have come to visiting Thailand recently, thousands of people from the United States visit the country each year for a variety of reasons, which, interestingly enough, include the increasingly popular trend of medical tourism. The fact that people are willing to travel clear across the world for anything from cosmetic surgery to dental services is surprising enough in its own right, but that’s nothing compared to the fact that one may be able to use airline miles to not only book travel, but also to pay for the procedures themselves. In other words, the right credit card could conceivably be your ticket to free health care.

You see, Thai Airways – the 5th best international airline in the world, according to CNBC – recently offered a promotion that allowed members of its loyalty rewards program, Royal Orchid Plus, to use their miles for a wide array of medical procedures, including, but not limited to, the following:

5 Reasons To Consider Creditor Insurance

by Guest on January 12, 2012

If you have a mortgage, loan, line of credit, or a credit card, it may be in your best interest to accept the creditor life and disability insurance that goes along with it. Although it will cost you extra money out of pocket, it may just be worth your while.

1. It can give you peace of mind. If something were to happen that drastically changed your ability to earn income, you want to know that you and your family would be protected. Without insurance, you would still be expected to make payments to your credit products. But, with insurance, you would know that it would be paid of in full in the event of your death and that your disability insurance would kick in if you were unable to work due to an accident or injury.

Helpful Tips for Tax Season 2012

by John Kiernan on January 3, 2012

With the holiday season in the rearview mirror, we are all getting back into our normal routines. Unfortunately, that means starting to think about tax season 2012. April is right around the corner, after all, and if you foresee an inability to pay your full tax bill in full, this can be quite disconcerting. To help ease concerns, the California Society of CPAs recently announced some important strategies for dealing with the Internal Revenue Service (IRS) if you cannot cover your total tax toll.

Before we get to them, however, there are a few things that you need to know about the IRS, its practices, and the terminology you can expect to come across when dealing with an inability to pay:

U.S. Sanctions on Iran Underscore Need for New International Banking Regulations

by John Kiernan on December 27, 2011

In a recent article about the negative effect Swiss banking secrecy and hypocrisy have on the rest of the world, we suggested the creation of a revamped banking community, in which member nations would share information about bank accounts held by foreign nationals with their respective governments and member banks would require that identifiable individuals be behind every account (even corporate accounts). These rules – defiance of which would result in economic ostracism – would help prevent tax evasion, money laundering, drug trafficking, and other criminal activities. In formulating this idea, we did not specifically consider the effect such a system could have in curbing terrorism, but recent sanctions levied by United States against Iran as well as banking institutions doing business with the country have indeed made this utility clear.

The U.S., together with Britain and Canada, announced on Monday Nov. 22, 2011, new sanctions against Iran – targeted to the country’s petrochemical sector and organizations with terrorist ties – that are designed to put increased pressure on the Iranian economy and thereby limit nuclear development as well as funding and training for terrorist groups around the world. The Obama administration hopes that by designating Iran as a “primary money-laundering concern,” companies will break off ties with Iran in order to remain in good standing with countries like the U.S. that are opposed to its practices.

Think Miles & More is Bad? Check Out What British Airways Has to Offer

by Odysseas Papadimitriou on December 20, 2011

A few months back, I wrote an article about how glaring flaws in Lufthansa’s rewards program were causing me to question my long-time relationship with the Star Alliance member. With these doubts in mind, the 100,000 initial bonus miles being offered at the time by the British Airways Credit Card proved too much to resist. What’s the worst that could come of shifting my airline loyalty program allegiances and opening the British Airways Card, I thought? Sure, BA’s network of partner airlines doesn’t even come close to matching Star Alliance’s, but shouldn’t that result in the company compensating via better rewards, customer service, etc.?

Apparently not, as my experience thus far with the British Airways rewards program has made Star Alliance look terrific by comparison. While BA’s problems are numerous, they can be separated into two primary categories: effectively worthless rewards and unprecedentedly bad customer service.

Top Six Money Saving Tips for Your Household

by Guest on December 19, 2011

Saving money in your household finances needs to be a top priority, especially when you consider the difficult economy in which we are living. Every dollar and every cent counts and so does every one that you can save. There are many ways that you can stretch the hard earned cash in your household to make it last longer and work harder. Here we zero in on the top six money saving tips for your household that you can start doing not tomorrow, next week, or next month,  but today!

1. Pay your credit cards off in full every month. The interest you will pay if you carry a balance from month to month is astronomical and not something you even want to think about! Okay, maybe thinking about it for a minute is essential to driving the point home. Consider the fact that a $1,000 balance that is being charged at 18 % will cost you approximately $200 a year in interest charges. Wouldn’t you rather keep that $200 in your bank account? When you use them pay them off- completely!

The Battle of the Black Cards: American Express’ Centurion Card vs. Barclays’ Visa Black Card

by John Kiernan on December 13, 2011

In one corner, we have the Black Card. In the other, we have, uh, the Black Card. Confused? Most likely, and that’s exactly why American Express recently engaged in a legal battle for the right to use the name that has come to signify wealth and status not only in the credit card industry, but throughout society and pop culture as well. Rappers routinely crow about their Black Cards in songs, athletes and movie stars are spotted using them by the paparazzi, and they’re even employed in shows like “The OC” and “Entourage” to signal things like prosperity, greed, or overspending to viewers. While Amex was successful in nullifying the Black Card LLC’s trademark on the term “Blackcard,” several trademark infringement and false advertising claims remain unsettled, as does the ultimate question: Which is the better Black Card?

American Express Centurion Card
Though the American Express Centurion Card has long been shrouded in secrecy – an Amex representative responded to a request for comment by saying, “We actually can’t confirm much about the Centurion Card as we don’t talk about its services or benefits” – a few things are substantiated, including its fee structure and the fact that it is available by invitation only. The rest we can only glean from various sources and first-hand accounts, almost as if the Centurion Card is a Bigfoot-esque mythical creature.

Calling Customer Service? A New Scam is in Town

by Odysseas Papadimitriou on December 7, 2011

During a recent experience to forget with and its customer (dis)service department, I happened upon something likely to be quite interesting to both American Express and anyone using an American Express small business credit card.

It all started when a WalMart representative informed me that my digital gift card order had not been completed as a result of a problem with my credit card. I, of course, reacted by immediately flipping the card over and calling the number listed on the back for Amex’s 24/7 small business customer service department…or so I thought.

How to Write Business Plans For Funding Sources

by Guest on December 5, 2011

When most entrepreneurs need to go to banks or investors to raise funding, they realize they need to develop a business plan. But, unfortunately, most entrepreneurs complete their business plans incorrectly, and thus fail to raise money.

Interestingly, most entrepreneurs do include much of the key information they need in their business plans, such as the executive summary, industry analysis and marketing plan sections. But, since most entrepreneurs have the wrong mindset when creating these plans, they fail to achieve their goals.

How Does Europe Solve its Debt Crisis?

by Odysseas Papadimitriou on November 29, 2011

Whether you are well-versed in international economics or not, you’re probably aware that Europe is having substantial problems. You’re also likely familiar with the resulting worldwide ripple effects: uncertainty amongst investors, fears of a global double-dip recession, and widespread political upheaval, just to name a few. Of course, there are a number of prominent theories for how to solve Europe’s debt crisis, but given the depth and complexity of the problem, none is perfect and each requires tough choices to be made. People – not just in Europe, but around the world – need hope, however. We need a plan, a sense that these economic issues are finite and not permanently debilitating. So, with that being said, what say we take a quick look at four different courses of action that Eurozone governments can take, the pros and cons of each, and which will provide the most long-term benefit without causing short-term chaos.

Option 1: Economically sound European countries pay down southern debt
This plan would involve countries like Germany, the Netherlands, and Finland using savings, tax revenue, and export surpluses to help pay down the debts of southern neighbors like Greece, Portugal and Italy until they are at manageable levels. Such an approach is logical in the sense that the economies of European Union (EU) nations are interconnected, and the default of one or more countries would have negative repercussions for others. Review: Be Prepared for Problems

by Odysseas Papadimitriou on November 28, 2011

While the tradition of stores being veritable zoos on Black Friday continued this year – news reports describe consumers getting pepper sprayed, trampled, and even shot – many people turned to the Web for their Thanksgiving purchasing, hoping to score the same deals without the lines, bodily harm, and overall hassle. Unfortunately, this approach did not help customers save money or live better, as we all learned the hard way. You see, before learning of the technical problems that plagued the retailer’s website on Black Friday, forcing shoppers to look elsewhere to complete their purchases, I had quite the adventure when trying to purchase a digital gift card.

My ordeal began on the Tuesday before Thanksgiving when I placed my Wal-Mart electronic gift card order. It’s important to note from the start that I opted to get a digital gift card precisely because the person I was buying it for wanted to purchase a TV from on Black Friday. In order words, time was a factor. After providing my payment information and completing the transaction, I received an e-mail confirmation, saying that the gift card would be delivered to the recipient’s inbox within a few hours. Everything was going according to plan.

How to Find an Alternative to Dental Insurance During Open Enrollment Season

by Guest on November 28, 2011

Not everyone is getting an email from his or her employer to enroll in health and dental insurance this year.

Unfortunately, in the last two years, we’ve witnessed 9 million adults losing their health coverage as nearly a quarter of working-age adults either lost their job, or dealt with a spouse losing their job, according to a 2011 Commonwealth Fund survey.

Your Holiday Guide to Gift Cards

by John Kiernan on November 23, 2011

On the eighth day of Christmas, my true love sent to me…eight things to know about gift cards this holiday season. Sure, you might have been expecting some milk maids or something, but with gift cards firmly entrenched as the most popular type of holiday present and the U.S. agriculture industry not what it once was, you might find this more useful. So gather together your swans, geese, golden rings, calling birds, French hens and turtle doves; get that partridge out of the pear tree; and settle in to learn everything you need to know about getting better gifts this year

1.  Last year’s leftovers are still valuable
It’s not just you; all of us in general don’t even come close to using all of the gift cards we receive each year. In fact, a quarter of U.S. adults have at least one gift card left over from last year, and 55% of them have more than two, according to a Consumer Reports Holiday Survey. The top three reasons people gave for not using their cards: not finding anything they want to buy, lack of time, and forgetfulness. It’s not too late to get value from old gift cards, however, as you can sell them for cash via an online gift card exchange.

5 Ways To Stop Impulse Shopping

by Guest on November 23, 2011

cut-wasteful-spendingImpulse purchases, we all make them and almost always end up regretting them later. Decisions involving money should always be well thought out. For me at least, impulse buys almost always end up being bad decisions. They are bad choices because you haven’t taken the time to decide if you really need the item or you just want it. Since you also did not spend any time doing any comparison shopping, purchases made on a whim will cost you more.

So how do you stop yourself from making these bad choices time and time again? Here are five ways you can stop your impulse purchasing habits.

What’s the Connection Between Unions and Your Wallet?

by Odysseas Papadimitriou on November 9, 2011

labor union workersUnions are inextricably tied to the U.S. economy. Since the industrial revolution, they have served an important purpose, ensuring that there is a balance of power between management and labor. But what if things have gone too far? Could unions actually be costing Americans jobs by forcing companies to outsource? And, if so, what’s the solution?

To understand the role of labor unions today and how they could be jeopardizing your wallet, we must circle back to their origins. When most of the U.S. labor force was concentrated in mills and factories in small towns and growing industrial epicenters, connected only by a limited railway network, unions played the dual role of watchdog and agent. They ensured that management could not subject workers to inhumane conditions or force them to accept unfair compensation by giving workers bargaining power borne from unity, organization and educated leadership. For many of us, the noble role unions played during this time, righting wrongs like those explored in Upton Sinclair’s famous novel about the U.S. meatpacking industry, The Jungle, created a romanticized image that unfortunately does not match up with current realities.

Switzerland Supports Criminals & Hurts Your Wallet

by Odysseas Papadimitriou on November 2, 2011

wb_swiss_criminalsWhen you think of Switzerland, the first few things that likely come to mind are bank accounts, chocolate, and neutrality, and there’s a reason for that. The Swiss love to portray themselves as mild mannered people who eschew crime, make delicious candy and run perhaps the most unique banking industry in the world. But hidden behind this façade are layers of hypocrisy and implicit criminal involvement, which allow illicit operations to flourish around the world and provide safe haven for tax evaders. Lost in the aura and tradition of Swiss banking isolationism is the negative effect the Swiss system often has on citizens of other countries. The bottom line is that economies around the world are now more interconnected than ever, and if we want the world to become a safer place or all U.S. citizens to be held accountable for the same tax laws, then Switzerland will need to adjust or risk expulsion from the Western financial network.

Swiss Banking’s Murky Past
Swiss banking secrecy officially took effect in 1934 with the passage of the Swiss Banking Act—which effectively made it illegal to share bank account information with third-parties, including Swiss authorities and foreign governments—and even the circumstances of these origins are enough to raise eyebrows. Switzerland has long justified its banking secrecy laws by harping on the merits of personal privacy, and while this is likely a large part of the equation, scholars seem to agree that the aforementioned 1934 law was passed in reaction to a French scandal, which involved France’s Prime Minister accusing distinguished French citizens from various walks of life of stashing money away in Swiss banks and thereby funding the Nazi regime.

Secured Credit Cards: The Expected, The Surprising & The Best For Your Needs

by John Kiernan on October 27, 2011

secured-credit-cardsThink all secured credit cards are the same? It’s ok, you can admit it. I mean, it’s a natural assumption; they all require minimum security deposits of around $200, the exact amount you put down equals your credit line, you get back your deposit minus any outstanding balances when you close your account, and so on and so forth. Interestingly though, a new study helps complete the picture and reveals some important differences between secured credit card issuers.

Overview & Application Requirements
The first thing you need to know is that not all banks or credit card companies offer secured credit cards. In fact, only 62% of the issuers investigated in the study do. What’s more, there are some minimum requirements for approval that all issuers must abide by. Some are going to seem familiar, others may be a surprise:

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