- Apparently, the newspaper got it wrong that Mr. Singer would attempt to appoint a successor for Town Moderator if he were elected to the Board of Selectmen. It’s still not clear to me who would. The Board of Selectmen would be a possibility, although I would think that it could be Town Meeting. However, it’s possible that the Town Meeting has delegated that authority to the Board of Selectmen via their annual vote to let them fill appointments. But Mr. Singer would need to get elected, first, anyway.
- Making the Selectmen’s race more interesting is that there’s a Bay Path senior who plans on running.
- I’ve basically gotten the custodian of Jessi’s former 457 plan to admit that they gave us an incorrect 1099-R, but that they won’t send a corrected one. I may call the IRS and try to get them involved in correcting the situation.
- I made enough money judging last year that I’m claiming it on my taxes. I hope they accept my assertion that it’s “hobby income” and not “self-employment income” and thus not subject to self-employment tax. Especially as I consider it a hobby and not employment.
- I’ll be judging this weekend at the Conflux prerelease, on Saturday at TJ Collectibles and on Sunday at Rising Phoenix Games.
The big business development that was being planned for the center of town on Rte. 20, and went through 8 months of getting Planning Board approval, is now kaput. They have no intention of moving forward with the project, didn’t file the paperwork they needed to after approval, and so the Planning Board will be revoking their permit.
Last week’s Charlton Villager (7.3MB PDF, page 3) reports that David Singer (2006 State Rep. candidate and current Charlton Town Moderator) is running against Jack Bacon for Selectman this year. If he wins, he’d resign from the Moderator post. He says that he’d appoint an Assistant Moderator to finish out his term, but that doesn’t sound correct from my understanding of Town Meeting Time and M.G.L.. However, town meetings are run by custom as much as they are by law, so it might be legit for him to do so. But I think it’d be better if there were an election or even just a Town Meeting floor vote to determine the successor. And of course, in any event, I need to decide if I want to try to run for the position.
Most people who have a job pay the “FICA” or Social Security tax. This tax is 6.2% of income paid by the employee as withholding from each paycheck, and another 6.2% of income paid by the employer. But of course, this system that’s supposedly good enough for the rest of us doesn’t apply to government employees. No, they have their own program. For part-time government employees in Massachusetts, there’s a 7.5% compulsory contribution to the Massachusetts SMART Plan instead of a payment into Social Security. It’s a 457 plan, which is somewhat like a 401(k) or 403(b). Although, unlike those, there was no choice as to how to invest the money. The fund that it gets invested in is called “The Income Fund”, which is a fund that isn’t supposed to lose value, but that I can’t easily find many details on.
So, while Jessi was working part-time as a substitute teacher in 2006 and 2007, she had contributed about $300 into this fund. However, the monthly fees being deducted for maintaining the account were more than The Income Fund was growing on $300 of principal. So, rather than waiting for it to whittle away to nothing, in 2008 we thought that it would be smart to transfer the money to a Roth IRA at Vanguard that we had already established for her. This is the advantage of a system like this over Social Security, is that you can transfer the money out, at least once you leave employment. Now, the 457 plan is pre-tax money that grows tax-deferred, and a Roth IRA is after-tax money that grows tax-free, so basically this transfer means that (1) we pay taxes on the $300 now and never need to pay taxes on what it grows into (good as with all the deductions we have, we’re paying little in Federal Income Tax in 2008, and I expect tax rates to go up in the future), and (2) we can invest the money as we wish. So, we eventually (over several months) managed to get all the paperwork filled out for them to transfer the money directly to Vanguard.
So yesterday, we got the 1099-R from the 457 plan, describing the distribution for tax purposes. However, the form describes the transaction as though the money were transferred into a Traditional IRA, which would be a pre-tax account that didn’t generate taxable income. After a few phone calls, they do seem to think that some sort of error occurred, as their paperwork indicates they thought that they were transferring the money to a Traditional IRA when in fact they transferred it to a Roth IRA. They don’t seem to understand the concept of transferring the money directly to a Roth IRA, which was added to the tax law in 2008. (Previously, you’d need to transfer to a Traditional IRA and then convert that to a Roth IRA, which Congress and the IRS eventually realized was just adding extra steps for no benefit.) And yet, they did do a direct transfer to a Roth, they just didn’t realize it and aren’t reporting it that way.
So, they’re supposed to call us back this evening with an update on whether they’ll be able to send us a corrected 1099-R.
It’s somewhat frustrating when I know exactly what I’m supposed to filing for taxes, but the companies are reporting contradictory information to the IRS, and so I probably shouldn’t file just yet until I get this all cleared up. All this work, for $300 of reportable income…
Interesting developments in filing taxes this year. On the federal level, the IRS’s Free File program now has a basic just-fill-in-the-forms web filing option, without the restrictions that the “regular” Free File program has. It looks like the IRS strong-armed the tax software industry into making it for them.
In past years, I’ve used TaxACT for federal filing because they offer it completely free as long as you keep on clicking “No, I don’t want the useless deluxe version” every other screen. I may still use it, but I’m very happy that there’s an option that just emulates the paper method, but does it electronically.
And on the state level, the Massachusetts Department of Revenue has replaced its awful telephone filing system with a web filing system, which on first glance seems to be very nice.
In the past, I’ve occasionally needed to file a paper return for one organization or the other due to not filling free electronic or telephone filing requirements, and it always infuriated me that I needed to pay the cost of a stamp just to tell the government to return money that it had compulsorily borrowed from me during the year. Hopefully, that era is over.
- As mortgage rates have dropped significantly, I’m working on refinancing my mortgage. I find it bizarre that when staying with the same bank, they need to do an appraisal to ensure that we have a low enough loan-to-value ratio, when they’re already taking the risk of having loaned us the amount of money that we have out. In fact, by lowering the payment all the refinancing is doing is lowering their risk. And yet they have to follow their procedures. Truly bizarre. On the plus side, if the appraisal comes in at less than the tax valuation, I can bring it to the Assessor’s office and potentially lower my property taxes.
- This weekend, I’m head judging the North East Open, with the complicated logistics of having many draft pods running at once within one event. Hopefully, it will be a fun and interesting event.