You see, I’ve discovered Portland’s Charter Schools. For a fair background about our Charter schools, refer to this Portland Mercury article, and for an overview of the charter movement, see The National Alliance for Public Charter Schools.

Awareness Dawns

A couple weeks ago, we got the fateful phone call. It was the middle school guidance counselor, "I___ will not be successful if he goes to Wilson High School. He’ll inevitably drop or fail out. You should consider alternative schooling." His poor performance was no surprise to us, but we were very interested to hear her ideas, since we were completely exhausted by trying to force the kid to succeed.

One of the alternatives she proposed was sending him to a charter school, specifically Trillium. I don’t know how I’d missed it up until then. I suppose I thought that I thought most or all so-called alternative schools were gang schools or lightly veiled schools-for-the-slow.

The Visit

We visited last week and we were simply blown away. Yes yes YES, we want our son to go to Trillium. Yes, we want him to experience a school where we counted no more than ten students in any one class. Yes, we want him to go to a place where we witnessed a physical altercation being resolved by peer mediation. Yes, we want him to have a chance to take African Drumming class alongside Japanese. Yes, we want to give him a chance to replace apathy and failure with engaged interest.

In fact, we were so impressed that we applied for admission for our daughter who’ll be entering first grade next year. We want all that for her as well, even though she’s very much her brother’s opposite when it comes to school. Frankly, my wife and I both wished we could have gone to a school like that.

Taxes and staying put

Dustin and I have been considering moving to Mexico for a long while now. But if this works out, and it is what we believe it could be, we’ll stay put while our children receive a truly outstanding education. I don’t even mind the high taxes we’ll have to pay to do that.

Technorati Tags: charter school, charter-school, education, taxes

Currently the U.S. is at about 65.5%, much less than many of the worlds great economies.

But on to the main point

The optimist argues that paying off the national debt will certainly cost big bucks for our children. If the average tax debt per capita is currently $2,290, it will need to rise to $9,828 in about 25 years. That’s scary, but not so once you realize that this is simply the status quo moved out 25 years at a 6% growth of the GDP. Get it? The numbers are huge, but the same relative burden that they are now.

He further argues that the best way out of debt is to raise our income rather than tightly cap spending.

In short, the right way to raise taxes on future generations is to raise their pay. The right way to raise their pay is through real economic growth. And the pathway to real economic growth includes growth- and productivity-friendly federal laws and policies.

He ends his article with the excellent points:

Wouldn’t it be unexpectedly strange—and invigorating—to see the fiscal debate shift towards how to raise everybody’s pay by fostering the creation of new, better jobs in new, better companies and industries, and by leveraging an ever-growing stock of intellectual capital? It would be a long-overdue change-of-subject, in my opinion.

Yes. It would change the subject from fear to hope, from pessimism to optimism, from “how to avoid deficits” to “how to make better investments in our future.” Anyone who has ever bought a home or grown a business knows that borrowing money to help fund good investments is perfectly sound financial practice. So why can’t our leaders get behind that simple concept? Wouldn’t it be refreshing if they stopped talking about deficits, and started talking about how they’ll work towards growth-friendly laws and policies—i.e., “good investments”?

Technorati Tags: politics, deficits, GDP, taxes

Her iBook G3, one of the original “white books” had died a lingering death in the first quarter of the year. Since then, she’d been making due with my cruddy old Dell C610. That thing doesn’t close anymore, since it has a broken hinge repaired with duct tape and bent plexiglass. You get the idea. Plus, it runs Linux, so was not the best move for a Mac girl.

Macbook Pro Time!

Yup, we took an enormous step forward in time. I got her a 1.8 Ghz dual-core Macbook 15″ laptop. I had it all set up and sitting by her favorite chair when she came home from work. “What did you do?!?!” was the only thing I heard when she came home. She’s in heaven, as well she should be, since it is the single nicest laptop I’ve ever touched.

No debt incurred

I’d wanted a new laptop for her for months. But, it is not a “debt-worthy” event for me, not even as a business expense. I had to wait until I had the money free of other obligations. The severance check more than covered the laptop, so no worries there. It really felt good to stick to my “no new consumer debt” resolution.

Dustin is the art director for our business, so she really does need the laptop for business purposes. Accordingly, I bought the laptop like so:

• Deposit severance check in personal bank account.
• Buy laptop with AmEx business card.
• Transfer $2500 from personal bank account to business account as “owner investment”.
• (when the transfer is complete), pay off AmEx.
• Depreciate the laptop on a three-year straight-line schedule. That is approximately $800 per year deducted from business profits, saving me approximately $250 per year in taxes, netting me a total discount for the laptop of $750.

Did you see how much I saved from the total price just by buying the laptop through my company? That’s quite the savings for doing a little paperwork. Anyone with any legitimate excuse to have a business is simply insane to not take advantage of this tax savings.

Technorati Tags: macbook, laptop, business expenses

I spent the whole morning yesterday in tax-prep pain. Over a year ago, I dropped Quicken for Mac permanently. Intuit simply does not care about Macs, always putting releases far behind Windows, and making them inferior even when released.

Last year, they were changing Quicken BillPay, to force every Quicken user to upgrade by permanently ending backwards compatibility. The kicker was that the current version of Mac Quicken wouldn’t work with the upgraded services for an unknown amount of time. That was the incentive I needed to switch from a company which clearly did not care about me to one that did, MoneyDance.

However, I did my taxes last year with TurboTax, and I had a complex set of carry-forwards related to my adoption of Clio, my youngest daughter. So, despite the bitter taste Intuit had left in my mouth from the Quicken experience, I picked up a copy of Quicken at Costco. I went to install it yesterday on my beautiful Mac G5.

On the first run it crashed

I should have stopped right then. If a company can’t install on a Mac, it is too brain-damaged to do business with. Macs are bone-simple to install for, needing no installer for anything but system level programs. But Intuit managed to crash while applying updates. OK, I tried again and it made it past the updater.

Then TurboTax crashed when I imported last year’s taxes

This was the whole reason for my use of TurboTax this year! I was supposed to be able to import last year’s taxes. No. It would not let me import them. I tried a half-dozen times. I deleted the program and reinstalled. I deleted, emptied the trash and reinstalled. I deleted, emptied the trash, rebooted and closed all other programs on the system. In every case it would endlessly hang on import of my tax file.

Thank the gods that Costco has such a lenient return policy. They took it back without a quibble. I noticed that at least one other person in the return line was returning TurboTax as well.

Then I tried TaxBrain

TaxBrain was impressive, and I would definitely have used them. I started to do so, and had a question which was answered within a minute by a live chat person, for free. Unfortunately, the answer to the question was that they didn’t have the form I needed for my Adoption tax credit (form 8839). With regret, I left that service, which would have been the cheapest, fastest, and had the best interface.

Then I tried TaxCut

HR Block had sent me a free TaxCut CD. It would have been nice for them to include a Mac version. So that was out.

I looked momentarily at the creaky old Windows machine I keep in the office. It is off all the time, and only used to check out how my sites look in IE when I make changes to the layout. Poor thing is 500 Mhz, if I recall correctly. The problem is that I simply do not trust secure things like taxes on Windows machines. They are far too prone to viruses and various other exploits. That and the fact that I do not care to spend the time applying the needed Service Packs and Virus scanners and all the garbage that sucks up so much time for the Windows folks disqualifies my just installing TaxCut on the machine.

Panicking a bit, I looked at Intuit’s TurboTax online for a moment. No, the bitter taste is too strong, plus their service is inordinately expensive, in my opinion. I’d need to spend at least $79 to do what I should have been able to do with the $32 Costco package. Finally, I gave TaxCut Online a shot.

TaxCut Online is slow, and renders very poorly in Firefox 1.5. But, it works, which is the important part. It has my Adoption credit form, and it is much cheaper than Intuit’s service at $39.95.

Technorati Tags: TaxCut, Taxes, Quicken, TurboTax, TaxBrain, Intuit, HRBlock

Confused about what I am talking about? A quick backtrack might help. Everquest is a “MMORG”, a Massively Multiplayer Online Roleplaying Game. Basically, you pay about $10 a month to take the part of a hero (or a villain) in a shared world, where you interact with both monsters and with other players. There are several popular games, such as Everquest, Ultima Online, and most recently World of Warcraft. Many younger people (and some older people) spend hundreds of hours playing these games. I used to do so as well. In the course of the game, you get valuable in-game stuff, such as magical swords, potions, or gold. Other players will sometimes buy these things from your character. Sometimes, via EBay, they’ll play real-world money for your in-game stuff.

For an article on Legal Affairs magazine, one writer decided to find out the tax implications of these transactions.

JUNE 2003. I SET MYSELF THE FOLLOWING CHALLENGE, posting it on my web log for the world to see: “On April 15, 2004, I will truthfully report to the IRS that my primary source of income is the sale of imaginary goods—and that I earn more from it, on a monthly basis, than I have ever earned as a professional writer.”

In the course of this project, I made a total of $11,000 selling on eBay the items I won playing a game called Ultima Online, $3,900 of which was in the final, most profitable month. I reported my profit to the IRS, and I paid the requisite taxes. But after I did so, a troublesome set of questions continued to nag at me—for which even IRS publication 525, entitled “Taxable and Nontaxable Income,” couldn’t provide answers.

Interesting! He goes on to make it even more interesting.

What about the assets I bartered for or won in the game but never sold in the real world, the suits of armor stashed here and there with their easily established fair market value? What if I traded those assets for their value in Ultima Online’s official currency, the Britannian gold piece, rather than for dollars? Wouldn’t it be easy to establish their value in dollars nonetheless and, if I owed American taxes on the exchange, put a number on the deal that the IRS could grasp and love? And what about all the other MMO players out there—how long could the IRS be expected in good conscience to leave the resulting millions of dollars in wealth untouched?

After all, if there is a known, customary conversion rate between Everquest gold pieces and US dollars, wouldn’t a player owe the IRS for gold accumulated in-game, even if that gold was never converted? When I played Ultima Online (in between wives), I bought a million Ultima gold pieces on EBay for $30. That’s a small amount, but many players have several million gold pieces. It starts adding up to an actual, measurable income, even if never converted into real money.
When the author of the piece took his question to the IRS, he found it difficult to explain the context.

“O.K., so I got a fake jewel that’s worth 80 million points, gives me all kinds of invincibility,” said Knight, striving doggedly to nail down what I was talking about. “But I got two of them, or don’t want to play [anymore]. And I can go on eBay and sell my jewel to some other character?”

“Uh, yeah,” I confirmed.

Knight considered the facts and offered a nonbinding opinion: “That’s so weird.”

In the end, the IRS wanted $650 to render a binding opinion, since this would be the first time it has ever been formally decided.

And you thought they were already taxing everything under the sun?

Link via Collision Detection

Technorati Tags: Taxes, Everquest, Ultima Online, IRS, MMORG

Basically, it worked out to approximately $12,000, state and federal combined. That is a tax credit, not just a wimpy old write-off. Every dollar of that $12,000 was a dollar we didn’t have to pay in income taxes. Even better, it rolls forward (for up to six years) until it is all used up. For my family, that meant we did not pay a dime in federal or state taxes last year.

This year we’ll pay a little, but still get to take back several thousand remaining in the roll-over.
TurboTax handled it all, which surprised and pleased me. In fact, I’ve already ordered my copy of the software this year, since all the roll-over calcs are already done for me based on last year’s remainders. If it weren’t for that, I’d definitely be using TaxBrain, which is an inexpensive online tax service I’ve been hearing great things about.

Technorati Tags: taxes, adoption, adoption credit, tax software, turbotax, 2005 taxes