This Week in Your Wallet: Talking Money, Taxes, and Bacon
How easy (or tough) do you find it to talk about money? Last week I received a piece of research (it wasn’t the first, I’m sure it won’t be the last) that says even for the well-to-do, it’s still incredibly tough. Tougher than talking about politics, sex, even religion — all topics that rank high on many peoples’ lists of personal taboos.
Last night I I had the honor of speaking to the women of the Jewish Federation of South Palm Beach County (I’m actually writing to you from the Chili’s at the West Palm Beach airport, where the sunny side up eggs were surprisingly good) and it was clear that this research was largely on target. But I’m wondering about all of you.
Simply because you signed up for this newsletter, I know money is a subject you’re interested in. You and I communicate about it on a weekly basis. Does that make it any easier? Or is it still tough to have an actual conversation? I’ll confess – it can be for me. My husband and I will sometimes schedule a time to go through our finances; when we do, I’m less inclined to procrastinate and avoid.
I’m writing my next Fortune column on this research – and I’d love to incorporate your feelings. So, I’ve put together a few questions here. Please take a few minutes to answer them. I’ll send you the link to the column in next week’s newsletter.
Meanwhile, here’s the other news of the week, starting with another group of people who are less inclined to talk about your money than you might think: The folks who work at the IRS.
It’s not you, it’s them
As the Wall Street Journal reports, 18 million calls to the Internal Revenue will go unanswered, and more than half of people’s letters will take over a month to respond to, according to IRS Commissioner John Koskinen. And even though the agency is both underfunded and understaffed, it’s still ready to audit. Now’s the time (remember we’re just three weeks out from the filing deadline) to make sure everything adds up. The Wall Street Journal offers some guidelines for avoiding and surviving the agency’s suspicious eye.
Although before we get into guidelines, you should know that the likelihood of getting audited can depend on your pay grade. Taxpayers earning between $200,000 and $1 million are more at risk than those earning less than $200,000. Still, the IRS will run your numbers through a computer program that compares your return with a variety of averages, looking for outliers like perfectly rounded numbers. So when it comes to your tax return, being unique isn’t in your best interest.
Let’s say the unthinkable does happen, and you receive the letter. First rule of thumb: Always reply. In fact, this rule applies to any letter you receive from the agency. The IRS buffs say to reply using certified mail, and that emails won’t get you anywhere. Also, make sure your records are accurate — it will make your life easier if a formal audit is in your future. If your records aren’t as pristine as they should be, or a formal audit is inevitable, don’t be too quick to represent yourself. The IRS is someone you don’t want to bluff your hand with. Be safe (and smart) and hire a professional. For the rest of the guidelines, read the full article.
Burning a hole in the IRS’ pocket
If you’re one of the 918,600 taxpayers who hasn’t filed their 2010 tax returns, then the IRS is about to bid adieu to your money. As CNNMoney reports, if you don’t file your return by April 15, then your money, along with the other $760 million worth of unclaimed refunds, will become property of the U.S. government. If you thought you earned too little to file back in 2010, think again. Refundable tax credits, like the Earned Income Tax Credit, were designed to help low-income filers. The agency says that half of the refunds are worth more than $571. For more, head to CNN.
Hold the ham, please
Bad news in the breakfast world: Bacon prices are sizzling up. As TIME reports, prices for bacon, along with other breakfast favorites, OJ and coffee, are on the rise. What’s shakin with the bacon? A virus that’s killing off Babe (ouch!). But before you get queasy thinking about last Sunday’s side of bacon, don’t worry – the disease running rampant in pig farms doesn’t affect people, and it’s not a food safety concern. However, as the supply becomes more scarce, it has and will continue to affect the prices at the supermarket. For example, prices for lean pork are already up 52% since the start of 2013. As for your bacon, the average price for a pound was $5.46 last month, up from $4.83 in February of last year. For your morning OJ and coffee, check out the full article.
Spring cleaning your finances
Just when we thought spring had sprung, more snow is heading toward the northeast. Although that doesn’t mean we should halt on our spring-cleaning efforts, especially when it comes to our finances. U.S. News & World Report offers five ways to clean up your money act, starting with your budget. Now that we’re nearing the end of the first quarter, ask yourself: Have I been keeping in line with my savings goals? If the answer is no, don’t feel defeated — just make the necessary adjustments and go from there. You have three more quarters in the game to get better.
After reviewing the budget, look to organizing, and possibly shredding, your old financial documents. The shredding is more for your financial security than it is for cathartic purposes, which is why you should consult the IRS’ website to see their guidelines for how long you should keep certain documents. The general rule: The majority of tax-related documents should be kept for three years. Ahem…but, if you didn’t file a return (like perhaps in 2010), then keep those records indefinitely. Another good tip from U.S. News is going paperless. File your bank and credit card statements electronically, and shred anything with sensitive information (i.e. account numbers, SS number, etc.). For more, you know what to do.
Jean
