It is Tax Time Again

You’ve probably heard that 51% of Americans don’t pay federal income tax, and many end up getting paid by the IRS. But if you are an EB2/EB3 immigrant waiting for green card, you most likely belong to the other 49%. Oops!

I don’t remember how much taxes I paid over the years, but I do recall the pain every year before April 15. So today when I saw a hot deal on Amazon’s tax software, I jumped on it. Now, I may still find other excuses to procrastinate, but at least shopping for a tax program can’t be one.

I have been using tax software and e-filing for nearly 10 years, mostly TaxCut (now called H&R Block at Home – quite intuitive, huh?) but for a couple years I did try TurboTax. I never had an accountant do my taxes before, although some friends strongly recommend it. Maybe some day I’ll give it a shot. I only know one person that still fills out paper forms and does calculations by hand, so he is my hero.

There are two major commercial tax programs on the market: TurboTax and TaxCut (H&R Block at Home), with TaxAct being a third option. They are priced pretty much in that order, from high to low. They can all import last year’s tax returns, as well as financial data from certain institutions. They are somewhat cross-compatible. There are many articles on the Internet to compare the three, but my personal experience is that they all get the job done. You may prefer one’s user interface, or certain features, more than the others. For me I started with TaxCut and found no reason to switch. Continue reading “It is Tax Time Again”

How to Choose Strong Passwords and Safeguard Your Online Accounts

If you are like me, you probably have over a hundred online accounts that all require a password. And you probably use the same password on multiple accounts. And, you probably haven’t changed some of them in years.

I often worry about the security of my internet accounts, especially those that contain my personal information such as birth date, social security number, financial data, etc. So I try to be careful. I don’t save my credit card on shopping sites if I don’t have to, for example. I also try to choose strong passwords and change them often, which, I think, is the first thing that should be done.

A good password is something that is easy for you to remember but hard for anyone else to guess. That is so obvious, I know, but is actually difficult to implement. Here are some tips that can help you pick better passwords:

  • Use long passwords (see more below);
  • Use a combination of capital letters (ABC), lowercase letters (abc), numbers (0-9), and special characters (@!#$&*) if allowed;
  • Don’t use dictionary words;
  • Don’t use numbers in sequence or repeated pattern (12345 or 22222);
  • Don’t use personal information such as your birth date;
  • Try to come up with a common phrase and pick the first letter of each word, then randomly add other stuff mentioned above;
  • Try to pick a word in your native language and “encrypt” it into English;
  • Try to use something you remember as a child as the base of your password;
  • Try to change your user name and password combination regularly;
  • Try to use a password tool/software to store all your passwords in an encrypted format.

Why is a long password (8 – 12 or more characters) so important? Someone who tries to steal your password is basically using a computer and the right software to guess it. It comes down to probability, really. Say your password is abc, there are only 17,576 (= 26 x 26 x 26) possible combinations. It takes a computer a fraction of a second to try every one of them. If you use uppercase letters too, the same three-character password would have 140,608 combinations. Allow numbers, 238,328. Add one more character, 14,776,336. See the point? If you use a long and random password that contains uppercase letters, lowercase letters, numbers and special symbols, it would literally take a computer hundreds of years to try all the possibilities.

Sometimes the problem is not your individual account, but the server. A hacker could break into a database and steal passwords that way. To minimize such risks, don’t use the same password on every account. At a minimum, separate them into different groups, such as easier passwords for those you don’t store much information to begin with, but very strong passwords for critical accounts. This way, even if someone gets your password from a gadget discussion forum, he is not able to access your Amazon.com or bank accounts.

Happy surfing, but stay safe!

What’s in your wallet?!

The Capital One commercials really annoy me, but I like the tagline: What is in your wallet?!

Do you know exactly what credit cards, debit cards and membership cards are in your wallet? Do you remember those card numbers? Can you quickly find their customer service phone numbers? Answer these questions as if your wallet or purse were lost.

If you are one of us who cannot memorize everything, here is what you can do:

Pull out every card from your wallet, put them down side by side on a flatbed scanner, and press scan or copy. Repeat for the backside.

This simple step can be a life saver in an unfortunate event of lost or stolen wallet. Not only you can quickly cancel your cards or accounts, thus minimizing your losses, you can also use these photocopies to accelerate the replacement process.

If you also carry your passport, green card or social security card around, it is even more important to keep record of everything that is in your wallet.

Google Economic Trends: Jobs Index

Google released another cool feature today which takes advantage of its gold mine – gigantic volume of search data – to track “domestic trends.” Available on Google Finance, the tool contains 23 indexes to cover major sectors of the economy, such as retail, car buying, jobs, and travel.

I downloaded the job search data and created a chart for the index. It is very interesting that several “trends” immediately jump out at you:

  1. Job search volume started to increase in early 2008, and hiked further in 2009, reflecting the current economic downturn and the massive layoffs it brings.
  2. Every year there is a dramatic drop in job searches in late December. Christmas is Christmas, everyone has to take a break!
  3. Thanksgiving time correlates with a similar, albeit smaller dip for the same reason. It may also indicate that businesses are probably trying to figure out their bottom line for the year, and becoming more cautious with their staffing plan during the holiday season.
  4. Memorial Day, Independence Day and Labor Day Holidays are all clearly reflected in the chart, as more people take vacations resulting in fewer online searches for employment. This is very impressive and I think it partially validates the accuracy of the data.

Google’s own visualization uses the same data, and is plotted using the 7-day moving average.

Google-Jobs-Index

Privacy advocates often criticize Google for collecting too much information, but I doubt anyone would argue that in this case, big G indeed put the data in good use. And honestly, I think Google so far has treated user information with great care and respect. Hopefully predicting economic trend is just a start, and search data will be analyzed and processed in much more details to benefit everyone.

Cell Phone Numbers and the Do Not Call List

I’m still getting emails warning me that “all cell phone numbers are being released to telemarketing companies and you will start to receive sale calls.” According to the Federal Trade Commission (FTC), however, this is not true:

You may have received an email telling you that your cell phone is about to be assaulted by telemarketing calls as a result of a new cell phone number database; however, that is not the case. FCC regulations prohibit telemarketers from using automated dialers to call cell phone numbers. Automated dialers are standard in the industry, so most telemarketers don’t call consumers on their cell phones without their consent.

Despite the huge waste of data storage caused by this type of chain emails, it does help raise awareness of the FTC’s Do Not Call list. In fact, anyone who doesn’t like sales calls at the most inconvenient times should register their phone numbers with the National Do Not Call Registry. And it is super easy to do:

On the web:

  1. Go to the FTC’s Do Not Call website;
  2. Type in your personal phone numbers, including home phones and/or cell phones;
  3. You may register three phone numbers at a time, but you can repeat the process to register more;
  4. Leave your email address;
  5. For each phone number you register, you will receive an email containing an activation link;
  6. Click on the link (or copy and paste the link address to a new browser) to complete your registration.

Use your phone:

  • Call 1-888-382-1222 from the phone you want to register

Your registration never expires until you remove the number from the list.

You may verify if and when a particular number was added to the DoNotCall list here.

Adding your phone number to the DoNotCall list doesn’t stop all telemarketing calls, but most legitimate companies honor the list (or face severe fines). Also if you purchased something from a company, a telemarketer representing that company is allowed to call you for up to 18 months after your last purchase.

From my own experience, the DoNotCall registry is quite effective. Don’t let those “New Car Warranty” scam artists discourage you. Two companies involved in the extended warranty scam, who placed millions of automated calls a week to any number they could get – home or mobile, were already busted by the FTC in the largest DoNotCall violation ever.

EFTPS Duplicate Payment Warning when Paying IRS Estimated Tax

I talked about the lack of electronic payment options from USCIS. It turns out the Internal Revenue Service (IRS) does have one. Considering that IRS is all about collecting money, it makes sense. So I decided to pay my 2009 estimated tax through The Electronic Federal Tax Payment System (EFTPS). According to its website, EFTPS is “one of the most successful Federal government programs undertaken in recent years” and it is “easy to use, fast and accurate.”

I actually went through the online enrollment process last year. It took about two weeks, including receiving a PIN in snail mail. A bit longer than the few minutes most banks need to setup an account, but not bad compared to those year-long backlogs we are used to.

So I went through the payment process, selecting Form 1040ES, putting down the amount (in four equal installments) and scheduling four dates in April, June, September and January. All went smoothly until I clicked “make payment.” A warning popped up saying that I’m making four duplicate payments!

I knew I was making four payment in equal amount, but on different days!

It offered three options: Edit, Abandon and Override. Override means you can ignore the warning and continue with the payment, in case you are wondering.

Thinking that I might have made a mistake somewhere, I chose Abandon and started it over. Since I was determined to avoid late penalties I once again scheduled four payments for the whole year, and in equal installments as IRS prefers.

Nope! Same duplicate payment warnings.  I chose “override” this time. Although the confirmation page appeared to be correct in terms of actual payment dates (settlement date as IRS calls it), I was still a bit concerned that IRS might debited my account four times on the same day.

duplicate payment warning for EFTPS

I did a little googling afterwards and guess what, the same issue has existed since at least 2006! And IRS knew about it even then. I can’t be the only one having questions about the duplicate payment warnings, can I?

Then you have to wonder, how hard is it to add an “if” statement in the code that works like this: if there are four equal payments, but on four different days, it might be intentional? A good hint would be the use of form 1040ES, duh!

At the very least, how about adding a short comment that explains what the duplicate warning messages are, especially if you are scheduling estimated tax payment in advance. This way people won’t be as confused, and I won’t be writing up this post when I’m supposed to be doing my taxes.

If a multi-billion dollar government agency can’t fix this bug in three years, it means:

  1. They don’t care;
  2. They think users will eventually figure out what to do; or
  3. They can’t find qualified and willing programmers to do the job.

First-Class Mail Price Rising to 44 Cents

The U.S. Postal Service has announced that the price of a first-class stamp will increase to 44 cents, starting May 11, 2009. The new postage is for the first ounce of a First-Class mail – the most common type for mailing letters, payment checks, etc.

The forever stamps will continue to be sold at 42 cents, until the price increase occurs in May. These stamps can be used “forever,” meaning that regardless of when you purchased them, or how much you paid for them, they are always good for mailing one-ounce letters. There is currently only one type of forever stamp, introduced in 2007. See the image on the right.

Keep in mind that those Nondenominated Stamps – stamps without showing their price – are not forever stamps. They have different values and styles. For example, the popular American Flag stamp, which shows “USA First-Class” on the face but no dollar value, is actually 41-cent each. Starting May 11, you will need additional 3 cents of postage in order to use the flag stamp for a first-class mail.

A stamp with its price printed is always worth what its face value indicates, obviously.

If you are interested, you might want to check out the history of first-class stamp rates in the US. Here is a portion of it:

Effective Date(s) Rate ($) Notes
July 1, 1885 – November 1, 1917 0.02
November 2, 1917 – June 30, 1919 0.03 War Years
August 1, 1958 0.04
December 31, 1975 0.13
May 29, 1978 0.15 “A” Stamp
March 22, 1981 0.18 “B” Stamp
November 1, 1981 0.20 “C” Stamp
February 17, 1985 0.22 “D” Stamp
April 3, 1988 0.25 “E” Stamp
February 3, 1991 0.29 “F” Stamp
January 1, 1995 0.32 “G” Stamp
January 10, 1999 0.33 “H” Stamp
January 7, 2001 0.34 Nondenominated Stamps
June 30, 2002 0.37 Flag and Antique Toy Stamps
January 8, 2006 0.39 Love True Blue and Lady Liberty Flag Stamps
May 13, 2007 0.41 Introduction of Forever Stamp
May 12, 2008 0.42
May 11, 2009 0.44

IRS Recovery Rebate for 2008 Economic Stimulus Payment

Remember last year’s economic stimulus payment? The $600 per person, $300 per child, tax rebate check from the IRS? Well, if you didn’t receive the full amount in 2008, there is a good chance that you will be eligible for a recovery rebate this year. According to IRS:

People who fall into the categories described below may be eligible for the recovery rebate credit this year:

  • Individuals who did not receive an economic stimulus payment.
  • Those who received less than the maximum economic stimulus payment in 2008 — $600 per taxpayer; $1,200 if married filing jointly — because their qualifying or gross income was either too high or too low.
  • Families who gained an additional qualifying child in 2008.
  • Individuals who could be claimed as a dependent on someone else’s tax return in 2007, but who cannot be claimed as a dependent on another return in 2008.
  • Individuals who did not have a valid Social Security number in 2007 but who did receive one in 2008.

If you use a software such as TurboTax or TaxCut to prepare your tax return, the software will calculate the recovery credit for you. If you are still filling out paper forms, you may choose to have IRS calculate the rebate instead. Or, you can use an IRS online tool (no longer available) or worksheets to figure out the amount yourself.

You will need the amount of stimulus payment you received in 2008 to calculate the recovery rebate. If you don’t remember, IRS allows you to retrieve it using another online tool (no longer available). Make sure you know the number of Exemptions claimed on your 2007 tax return before using the tool.