I Am My Brother's Keeper
While many continue to complain about the federal aid being dispensed all over the country, Americans are indeed helping each other. In Sunday's column, "A Call To Share Our Abundance," I wrote about some of those efforts and asked readers what they are doing to share their abundance?
Many of you shared your stories of service. Here's what you said:
Alan Shawn Feinstein, CEO of The Feinstein Foundation, wrote: "Every spring for the last 11 years, I've given away $1 million to anti-hunger agencies nationwide to use as a spur for their fundraising to feed the hungry. This is the 12th year." The more donors give, the more Feinstein gives. His yearly initiative has raised $940 million.
P. Slyke donates food to a local food pantry and donated the money she received from her stimulus payment to a Fairfax County nonprofit organization that provides housing for the homeless. "I am fortunate enough to be able to live on my retirement income and felt a responsibility to help others who are struggling," said the Fairfax County resident.
George Schmidt of Fayetteville, Pa. wrote: "The first Tuesday of each month the community where we live has a curbside food collection at 9:00 a.m." The canned and packaged food is delivered to a food pantry in Chambersburg, "where many of the neediest among us live," says Schmidt who also saw the need for fresh produce. "As we recently carried a few bushels of apples into the food pantry, a four or five year old youngster exclaimed, 'Wow, apples!' I then wished that we could do more."
Rich and Jan Shea write "our housekeeper and her husband, having bought their first home, were in need of cash to make essential repairs to this house. We agreed to pay them one year's cleaning up front so that they could make necessary repairs." The couple wrote that this wasn't a gift, "just a no interest loan which they are paying back in a dignified and orderly way."
Dale Hanson Bourke of Washington, D.C. wrote: "Our Bible study 'honors' the birthdays of the women in our group by bringing diapers, formula and food that one of our members then donates to area shelters and groups, through the Washington National Cathedral ministry." Bourke said the women are past the baby stage. "That's the amazing thing about the whole spiritual side of this economic crisis. If you tap into the joy of being able to help someone, you feel rich no matter what your 401(k) balance is."
Not all of you who wrote in had these kinds of stories, there was also dissent:
"Charity is not a virtue," wrote Kurt Kramer in Alexandria, Va. "There is nothing wrong with helping people if you can afford to help them, and they deserve to be helped, but rewarding people for their vices (e.g., money troubles brought about by their own poor decisions) is immoral. Self-sacrifice has been the justification for every bloody dictatorship in world history."
Maybe Mr. Kramer should read Rosemarie Amato's comments. The Cranston, R.I., local says at the age of 50, she found herself out of work.
"I have a group of friends, all in their 40's and 50's, who have either lost their jobs in the past year or are experiencing such cutbacks" she wrote. Each of them helps one another. One woman cuts hair for other's potential interviews. Another who teaches at local colleges provides books and internship opportunities to two of the women who returned to school. Amato helps the women file their taxes and unemployment benefits. "I was also recently in a car accident and one showed up with a fully cooked and delicious dinner," Amato said.
She added: "The generosity, kindness, and consideration I have felt from this group of incredible, intelligent, strong women is something I will never forget, and intend to pay forward in any way I can, because it's helped me hold my head up, when I didn't feel the least bit confident, and feeds me for strength. Some of these women were barely friends a year ago, and some friends that I had then have completely disappeared."
If you have a story about reaching out to individuals, families or communities in need, please write me at firstname.lastname@example.org. Put "I Am My Brother's Keeper" in the subject.
Tax Chat Q&A Great chat last week! IRS Spokesman Jim Dupree was my featured guest. As always, there were so many questions, we couldn't get to all of them, so here are answers to a few leftovers.
Q: We took maximum advantage of the Dependent Care FSA though my job last year, but after I got laid off in November I kept my daughter in daycare so I could look full-time for a job, and I didn't want to lose her slot at the daycare. Can I claim the money spent during the month-long period when I was out of work for a child care credit, or is it disqualified because I didn't have a job at the time?
Dupree: You may be able to claim the "Child and Dependent Care Credit," if you paid childcare expenses so you could work or look for work. More additional information, see the "Top Ten Facts About the Child and Dependent Care Credit" on the irs.gov Web Site.
Q: I filed my return and I am getting a large refund which I REALLY need. So, I've been checking the "Where's My Refund?" application on the IRS Web site a bit obsessively. I've noticed that my estimated refund date has been pushed back by a week twice. My question is, am I annoying the IRS by checking for my refund too often? If I say I'm sorry, can I get it sooner?
Dupree: It's not personal -- it's just an automated response, based on your input. Generally, paper returns take 6 to 8 weeks to process. I'm not sure why your refund date was pushed back.
Q: I have been recently told that the $7,500 repayable tax credit for new homebuyers who bought their house last year (not this year) will actually NOT have to repay this credit, in order to be consistent with the new homebuyer credit for people buying a house this year. Is that true?
Dupree: No, that is not true. For first-time homebuyers who bought in 2008, the maximum credit is $7,500 and must be paid back over a period of 15 years.
Q: I received a state refund from Maryland last year. Do I need to claim this as income?
Dupree: If you deducted your state taxes last year and got a tax benefit from the deduction (or from the portion of the deduction that was refunded to you), you must report the refund as gross income in the year you received the refund.
Q: I moved several states away for a new job part way through 2008. I sold my primary residence and lost approximately $30,000. Is that money deductible?
Dupree: A sale of a primary residence at a loss is a personal loss and not deductible.
Q: My husband lives in D.C. I live abroad. I purchased a home before we met and the loan/deed is in my name. Both of us pay the mortgage. My income abroad is not being taxed (I am a bona fide resident), we were planning on married filing separately. Can he take claim deductions on our mortgage interest?
Dupree: A payor of interest has deductible mortgage interest only if the payor is legally liable on the loan and the loan is secured by the payor's main home or second home. But the money your husband pays can be treated as paid to the mortgage company on your behalf. Thus, you can deduct the mortgage interest on your return or on a jointly filed return with your husband.
Q: I bought my house in 2006 and have been relocated. I will have to sell my house, probably at a loss. I understand I cannot deduct the loss anywhere on my return. Are there other expenses that can be deducted (beyond mortgage interest, obviously)? Home improvements, paying closing costs, etc.?
Dupree: Expenses paid in connection with a sale of a home are not deductible. Instead, they reduce the amount of the proceeds you received on the sale and reduce the gain, if any, required to be reported.
Q: I have a rental property. I have received a 1099 from the management company. Of course I will take this information along with other documents to my accountant. Will I be expected to pay taxes on the money received from my tenants. I am not making a profit on it because I still have a 1st and 2nd mortgage on the property.
Dupree: In general, the only amount you have to report from your rental property is your profit on the rental of the property (i.e., the income less the expenses). However, you should refer to IRS Publication 527 "Residential Rental Property" for more information.
Q: My husband and I bought a condo in DC in April 2003. We took the DC first time home owners tax credit, lived in the condo through June 2005 and rented it out July 2005 through June 2007, while we rented. We paid taxes on the rental income and sold it in July 2007. Now we are planning on buying a house in San Diego in April 2009. Do we qualify for the 2009 first time house owner tax credit in the recently passed stimulus act?
Dupree: The 2009 first time homebuyer credit is not allowed for a taxpayer who claimed the D.C. homebuyer credit in a prior year.
Please join me on Thursday April 9 when Dupree will return to answer more reader tax questions.
Color of Money Question of the Week
AIG has dispensed $165 million in bonuses to what the chief executive, Edward M. Liddy, said are vital employees. Liddy explained during a House subcommittee hearing that he felt these folks would leave the company if they didn't have their dough. He also was concerned about the company being sued for breach of contract. Now, the White House is expressing outrage along with the rest of America.
As reported today in AIG Chief Asks That Awards Be Returned, the bonuses included more than 70 that were $1 million or more in the division responsible for the company's downfall.
But, if we could, let's press rewind for a second.
AIG released its retention-payment program over a year ago. And the bonuses of more than $400 million for it's Financial Products division was widely reported says Post reporters Brady Dennis and David Cho in Rage at AIG Swells As Bonuses Go Out (Mar. 17).
Here's our Color of Money questions of the week (because frankly this mess can't be commented on with just one question): Are we justified in our anger? Is the White House justified in its indignation? Can we really be mad at AIG for doing what they said they were going to do, when they received the bailout? Should the employees give back the money after Liddy gave it to them? Pick a question to answer or answer them all.
Write me at email@example.com, please put "AIG Outrage Is All the Rage" in the subject line.
Color of Money Book Club Chat
The book takes you on a journey through Wall Street's history and offers advice on how to weather this economic storm.
Discussion starts at Noon ET on Thursday, March 26. Feel free to start submitting your questions now.
You are welcome to e-mail comments and questions to firstname.lastname@example.org. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.
Charity Brown contributed to this e-letter.