Category Archives: Finances

Why I’m back to filing our Virginia taxes on paper

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One of the little luxuries of life in Virginia is having more time to file state tax returns–ours, unlike those of most states, aren’t due until the first business day of May. And one of the little indignities of life in Virginia is having this annual ritual offer a reminder of how badly our state got suckered by the tax prep industry’s “Free File” con.

Rewind 20 years, and the Virginia Department of Taxation was a leader in providing direct online filing with its iFile site. You plugged in a few numbers from your federal return, the site did the math, and you could then file directly to the department. What was not to like?

A printed-out copy of a Virginia Form 760, with a pen resting on top of it.

The answer for commercial tax-prep providers was “competition.” And in 2010, they sold Richmond on a different deal: They would offer free tax prep and online filing through their apps and sites to lower-income taxpayers (as they had done for federal taxes since 2003 as part of the Internal Revenue Service signing onto this Free File proposition) if the state would first scrap its own tax-prep service.

As I wrote at the time at the Washington Post, the fiscal analysis prepared for the Free File bill introduced by Del. Kathy Byron (R.-Lynchburg) suggested this wouldn’t pencil out for the state unless almost no iFile users reverted to filing on paper. But bipartisan majorities passed Byron’s contribution to crony capitalism, after which Gov Robert McDonnell (R.) signed it into law.

The results of enabling Intuit’s rent-seeking strategy, as I wrote in the Post three years ago, have been woeful for taxpayers and the state: In 2019, more than seven times as many Virginia taxpayers filed on paper than availed themselves of Free File.

And since last year, I’ve become one of those people mailing in a Form 760 as if it were 1993. The clumsy but no-charge Free Fillable Forms option that I noted in my 2020 Post opinion piece–where I called it “the stone tablet of spreadsheets”–vanished from the Department of Taxation’s menu after 2021, which the department attributed to an unnamed software vendor (Intuit, perhaps?) dropping support for the product.

The actual work isn’t that much more than it was two years ago, except that I have to do the math myself after typing in numbers instead of clicking a “Do the Math” button (really!) in Free Fillable Forms. As before, I check my work by stepping through a Virginia return in TurboTax; I know my work isn’t done because Intuit’s app thinks we should get about $50 more in our refund, which also happens to be below the $59 Intuit wants me to pay for the privilege of filing my state taxes through that app. Figuring that out may be a hassle. Dealing with my printer probably will too.

I would love nothing more than for Virginia to renounce this failed experiment and restore something like iFile. But a bill introduced in January by Del. Kathy Tran (D.-Fairfax) to do just that instead died in a subcommittee, because recognizing past mistakes does not appear to be the high-order bit in today’s Virginia GOP.

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Now I really do hope it’s at least two more years before we buy a battery-electric car

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Last week, we won a weird old-car-ownership lottery by having the hybrid battery of our Toyota Prius fail–after about 17 and a half years and just over 126,000 miles. That more than doubled the eight years covered by Toyota’s warranty and comfortably exceeded the warranty’s alternate minimum of 100,000 miles, a threshold we crossed in February of 2018.

Back when we bought this then-cutting-edge gas-electric hybrid car in August of 2005, I did quietly wonder how long that system battery might last. A June 2004 NBC News story quoted a Prius owner nervous about the prospect of having to pay $6,320 (which in 2023 dollars would have topped $10,000) for a new hybrid battery and being forced to go to a dealer for that service.

Badge on the back of a Toyota Prius advertising its "Hybrid Synergy Drive"

The traction battery in our four-door hatchback not only far outlasted the warranty’s minimums but cost us much less to replace than I’d been led to think back then.

After seeing the dashboard light up with multiple warnings that included a red triangle with an exclamation point, my wife dropped it off at our usual mechanic and asked them to take a look at it. The answer the next morning: a diagnostic code of P0A80, meaning it was time to replace the hybrid battery, plus a secondary alert about a failing oxygen sensor on the gas engine.

That’s when I realized that I should have been researching this possible expense long before, but it turned out we didn’t have that many options. We could get an aftermarket replacement (I had one solid recommendation for Green Bean Battery) or go with Baird’s advice of getting a Toyota replacement. Posts in Reddit’s r/prius revealed reliability concerns about Green Bean, and on the other hand I’ve had great service from this shop since I still drove the 1997 Acura Integra that I gave up in 2015.

Counting parts and labor and taxes, all the work cost just over $4,000 and had our car back the afternoon after I okayed the battery transplant. That’s not cheap, but until last week our single biggest total maintenance cost had been new tires. The more important point is that this expense pushes back our eventual purchase of a fully-electric car–just in time for us to see that the Inflation Reduction Act’s tax credits now only cover a subset of the EVs on the market that excludes two of the models I’d been eyeing.

Getting all of two more years out of the car we don’t drive that much (courtesy of living in an eminently walkable part of the D.C. area) should see the prices of electric cars drop, the selection of IRA-eligible vehicles expand, and the performance of batteries and the extent of charging infrastructure improve.

That alone would be enough, even if EV advances like solid-state batteries haven’t yet overcome engineering challenges by then. And if we can somehow keep this Prius rolling into 2030, it will officially be an antique–but I’m not going to get greedy after all this.

Black Hat pitches increasingly resemble CES pitches

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When I’m spending a sunny Saturday in front of my computer, the usual reason is that it’s beastly hot outside. But today I have an additional, also seasonally-specific reason: I’m overdue to look over and make some decisions about all of the Black Hat meeting requests that have been piling up in my inbox.

A view of the Las Vegas Strip from the Foundation Room atop the Mandalay Bay hotel--a common event venue for both CES and Black Hat receptions.

Unlike last summer, I actually am going to this information-security conference in Las Vegas. And many more infosec companies seem to have made the same decision, leading to a flood of e-mails from their publicists asking if I’d like to set up a meeting while I’m in Vegas. How many? Over the last month, I’ve received 134 messages mentioning Black Hat, a number that makes me think of the annual deluge of CES PR pitches.

(Sorry, the total is now 135.)

Just like at CES, accepting even half of these invitations would leave me almost no time to do anything else at the conference. But where at CES I need to save time to gawk at gadgets on and off the show floor–and to get from venue to venue at that sprawling event–at Black Hat I want to save time to watch this conference’s briefings.

In the two prior years I’ve gone to Black Hat, I’ve found that the talks there have an exceptionally high signal-to-noise ratio. And since a coherent and entertaining explanation of a vulnerability in a widely used app, service or device is something that’s relatively easy to sell as a story, I also have an economic incentive to hold off on taking any meeting requests until the organizers post the briefings schedule–which this year only happened barely two weeks ago.

In other words, now I’m out of excuses to deal with these pitches. Which I could have done this afternoon had I not waited until this afternoon to write this post…

8/24/2022: Fixed the typo in the headline that nobody seems to have noticed until my wife asked about it today.

The bureaucratic burden of telling clients “pay me”

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It’s the first day of a new month, and that can only mean one thing for my e-mail: more .pdf attachments than usual in my outgoing messages, in the form of invoices for one freelance client or another.

Close-up of the 4 / $ key on a Mac keyboard, without which I would struggle to invoice anybody.

Instructing these companies to pay me for work done over the previous month should be easy after 11-plus years of not having a real job, but there’s still some struggle attached to this chore during and after the invoicing process.

The easiest part of it involves longer-running clients, where I just need to open the invoice document from the previous month, change the invoice number and the date, update the work done and the sum due, and attach the new file to an email.

But with less-frequent clients, I need to remember if there’s some wonkiness with a P.O. number or payment instructions that I may or may not have remembered to save in a previous version of the invoice file.

Others require their own format, usually a Google document or form or an Excel spreadsheet. Not knowing what kind of file a company will want me to produce before it will send me money is one of the things that’s kept me from following advice to use a professional accounting app like QuickBooks… another thing being my own apathy.

This routine can get more complicated if I’m away from home, since all of these invoice templates live on my Mac and since my Windows laptop doesn’t have a PDF-editing app equivalent to Apple’s Preview (sorry, Drawboard PDF). But keeping these financial documents in one folder on one computer allows for a simple accounting system: Right before I e-mail an invoice, I save it to an “Invoices – owed” folder, and once it gets paid I move it to an “Invoices – paid” folder.

It’s not the most sophisticated system, but it still seems to work after 11 years and change. At least when I remember to prepare and send the invoice in the first place. Which reminds me that I still have one invoice to finish for one client and a second to create for another, and of course they’re not in the same format.

The two annual fees I pay to shop for stuff

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Thursday’s news that the cost of Amazon Prime will go up from $119 to $139 reminded me that, yes, I do pay this annual fee just to be able to spend more money buying stuff. And then Friday I went on this month’s Costco run, which reminded me of the other annual fee I pay to be able to spend more money buying stuff.

We’ve been paying for these memberships for so long that I had to look it up–we added a Prime subscription in 2012 after free introduction to Prime via the old Amazon Mom promotion ended, while my wife’s Costco membership dates to 2001. Over that time, the cost of Prime has risen from $79 to $99 to $119. The cost of Costco membership, meanwhile, has gone from $45 to $50 to $55 to the current $60 during our tenure, and this pattern of a $5 increase every five years means it will probably hit $65 later this year.

The Costco membership is easier to justify. While not everything in its warehouses will save you money compared to shopping at a grocery store, we easily save enough in purchases like 25-pound bags of King Arthur flour, two-pound bags of yeast, three-liter bottles of Kirkland-brand olive oil and the absurdly-cheap booze at the D.C. Costco to recoup that fee within six months.

The math is more complex at Amazon, since Prime now folds in so many different services and features. Free two-day shipping is supposed to represent Prime’s core value, but most of our purchases don’t require that; meanwhile, I do save enough in Amazon Prime discounts at Whole Foods (as in, the closest full-size grocery store to our house) to offset a large chunk of Prime’s cost. Amazon Music now factors heavily into our household value calculation by virtue of the use it gets on our Echo (as in, our kid asking Alexa to play the Encanto soundtrack), but even as Amazon has invested heavily in creating original movies and series for Prime Video, our viewing hasn’t kept up.

These value equations get even woolier when you factor in the conduct of these companies. By which I mean, Costco is an easy company to like–it’s paid its store employees so well that some Wall Street analysts have whined that it’s too generous–while Amazon is not. The Seattle tech giant has real problems with fake products, fake reviews, occupational safety, and its treatment of third-party sellers and third-party delivery drivers. It collects vast amounts of data about its customers yet barely documents how it responds to government requests for that information.

(You may have noticed that all but the last of those links about Amazon’s issues point to stories in the Washington Post–which Amazon founder Jeff Bezos spent $250 million to buy. That speaks to the character of my old shop and that of Bezos. The other local angle with Amazon is its HQ2 rising in Arlington a few miles from our house and already helping to elevate its value, meaning my wife and I are both personally wealthier and pay higher property taxes.)

But Amazon’s wage increases for warehouse employees, combined with its massive size, have resulted in the firm doing what Washington apparently can’t–elevating the minimum wage across a large swath of the country. And in his last letter to shareholders as CEO, Bezos wrote that his new mission for his company was to make it “Earth’s Best Employer and Earth’s Safest Place to Work.”

Realistically, we’ll almost certainly keep paying what I’ve called the “Amazon citizenship tax.” But I want to know that some of this extra $20 a year will go towards making those goals happen.

Yet another way to overthink shopping: discounted gift cards via AARP Rewards

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Late last year, I hit the half-century mark and then, several weeks later, made my advanced age quasi-official by getting an AARP membership card. The discounts and benefits touted by the nonprofit once known as the American Association of Retired Persons seemed like they would justify the small cost of a membership that I’d already reduced by prepaying for five years (quite the vote of confidence for me to cast in late January!) and getting a cash-back deal on it from my Citi Double Cash card.

It took me a little longer to realize that the real payback would come from AARP Rewards. This program, partly open to non-members, offers points you can collect by completing such simple tasks as answering quizzes or just visiting the Rewards page, then redeem for gift cards as well as magazine and online subscriptions. The return on those points hasn’t been good for me, between the high number required to procure a gift card (for instance, 25,000 points for a $10 Spotify card) and the low odds of picking up one for less in an instant-win or sweepstakes entry (I’m batting .000 there after nine attempts, but at least I’ve only burned 450 points this way).

But AARP Rewards also sells a wide variety of gift cards at good-to-excellent discounts, some of which cover common if not unavoidable expenses and therefore amount to free money. For example, you can get a $15 Google Play gift card for $13, a 13.3 percent savings, while Home Depot, Safeway and REI gift cards come at 8% off. (All of those examples but Home Depot require an AARP membership, which younger people can get at an “associate” level while full benefits are reserved for my new demographic of 50 and older.)

AARP Rewards also sells a limited number of daily-deal gift cards at a deeper discount; for example, last month I picked up a $15 Crate & Barrel gift card for $10. But deals from the best-known retailers vanish almost immediately, as I’ve learned in multiple failed attempts to snag a Home Depot gift card at 30% off.

So far, I’ve racked up $24 in savings this way–although since I haven’t used all these gift cards yet, the savings are somewhat theoretical. The downside is that I now have yet another place to check after credit-card sites and miles-and-points shopping portals before I make an online purchase. And I now have yet another reason to feel a little dirty if I forget to do that and later realize I missed out on a chance to save a few bucks.

I survived yet another year of self-inflicted tax prep

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The annual exercise in accounting self-abuse that is me doing my own taxes ended three months later than originally scheduled and yet still on time, thanks to the IRS pushing Tax Day back to July 15 to make up for the coronavirus ruining everything.

That delay taught me what I’d needed all along to make this math masochism easier: a dress rehearsal a month and a half before the real deadline. Here, my thanks must go to the Virginia Department of Taxation, which extended the deadline to pay state taxes but only by a month–from May 1 to June 1–and left in place the automatic six-month extension to file state returns.

I didn’t want to send too much or too little money to Richmond, so I needed to get our federal taxes close enough to done for me to plug the relevant figures into our Virginia return and get a reliable estimate. I plowed through TurboTax, as usual needing much more time to calculate my business profit after expenses than for any other part of the return. As much as I miss having itemized deductions make a large amount of our tax bill vanish, getting them right did eat up a lot of hours.

(Side rant: My TurboTax labors also went faster than usual because I finally figured out the freakshow workaround required to import statements from some old American Funds holdings. Without that, I would have had to type in those figures by hand because the PDF download this inept investment firm provided was a giant image without any selectable numbers.)

That work yielded nearly-final figures for the federal return that I could flow into a Virginia return in TurboTax. Then I double-checked that result by redoing the state math in Intuit’s woeful Free Fillable Forms online app, what I actually use to file because I refuse to reward Intuit for its rent-seeking strategy of getting states to retire their own online-filing tools.

In past years, TurboTax and Free Fillable Forms have agreed on what I’d owe Richmond or what Richmond owed us. This year, the stone tablet of spreadsheets said we’d owe $10 more than what TurboTax estimated for our Virginia bill. I ignored that at the end of June but went back through all the numbers again this week without finding any reason for the difference. Which is fine–maybe we paid Virginia a Hamilton we don’t owe, but I’m sure my state could use the help these days.

After going over our federal returns one last time Wednesday night, I had them e-filed before 10 p.m. Wednesday, then had the state returns dispatched an hour later. That left one last tax-prep chore: tweaking the Google Docs freelance expenses spreadsheet template that I shared here two winters ago to make it a little clearer which home-office expenses should be added together.

How I got Amazon Prime almost for free

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Last summer, my appetite for quantifying my finances intersected with my food-procurement habits to yield a math exercise: How much of my Amazon Prime membership was I chipping away with these discounts at Whole Foods?

The Seattle retail leviathan’s 2017 purchase of the Austin-based grocery chain consolidated a large portion of my annual consumer spend at one company. It also gave me a new set of benefits for the Amazon Prime membership my wife and I have had since 2011: an extra 10% off sale items except beer and wine, plus some Prime-only deals.

(Personal-finance FYI: Amazon also touts getting 5% cash back at Whole Foods on its credit card, but the American Express Blue Cash Preferred offers 6% back on all grocery stores. That higher rate combined with Amex Offers for rebates at designated merchants easily erases the card’s $95 annual fee and returns more money than I’d get from Amazon’s card.)

So on my way out of Whole Foods, I created a new Google Docs spreadsheet on my phone and jotted down the Prime savings called out on my receipt. Then I did the same thing after subsequent visits. If Whole Foods and Amazon were going to track my shopping habits (which I assume they could from seeing the same credit card even if I didn’t scan in the QR code in the Amazon app at the checkout), I ought to do likewise.

Aside from $10-and-change savings during last July’s Prime Day promotion and again on roses for Valentine’s Day, most of these 41 transactions yielded $4 or less in Prime discounts. But after a year, they added up to $118.14, just 86 cents less than the $119 Prime annual fee.

To answer the obvious question: No, I did not step up my Whole Foods visits because of this tie-in. That place does happen to be the closest almost-full-spectrum grocery store to my home, but there’s a Trader Joe’s barely further away that trades a smaller selection for cheaper pricing on staples like milk and flour. And thanks to this dorky habit of mine, I can tell that I’ve shifted more of my business from WF to TJ’s the past few months.

I’m finally getting paid by the click, more or less

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My byline showed up at a new place this morning: Forbes, where I’m going to be covering the intersections of media, policy and technology. My first post unpacks AT&T’s probably-doomed attempt to boost its HBO Max streaming video service by exempting it from its data caps.

Writing about tech policy is nothing new for me, but this freelance client brings a different model of compensation, plus some self-inflicted dents to its reputation.

The publication I once knew as a glossy magazine that branded itself a “Capitalist Tool” did not cover itself with glory as it transitioned to the Web. It leaned way too far into the outside-contributor model under former editor Lewis D’Vorkin, flooding its pages with content churned out by writers who were often unvetted and unpaid and sometimes flat-out unqualified.

So when my friend Wayne Rash started writing there last year and encouraged me to come along, I had to quiz him at length about his experience. Then I talked to another recent addition to the site, analyst Carolina Milanesi, as well as one of its more senior contributors, tech journalist Larry Magid. They all pronounced Forbes a worthwhile outlet that was no longer a churnalism warehouse.

So I got on the phone with Dawn Chmielewski, the media editor there. I’ve known Dawn since she was covering tech at the Los Angeles Times when I was doing the same at the Washington Post, and seeing Forbes hire her last January had already raised my estimation of the place. She explained the steps they’d taken to professionalize their contributor system, including booting a bunch of the old contributors, as well as the pay structure.

That aspect, of particular importance to me, involves a minimum payment for five posts a month that would represent… a per-word rate I wouldn’t want to talk about. But traffic above a certain level brings a steady increase in income, and the page views that come from repeat visitors count for considerably more.

Aside from the short-lived micro-blogging platform Sulia, no other clients have paid me along these lines. But I can tell you that at almost every place I’ve written, including the Post, I’ve had editors cite my page views as a key metric in my value as a journalist and send me spreadsheets showing just how my stuff had done in recent months. And I’ve had editors turn down pitches explicitly because previous posts on the same topics did not get enough clicks.

Remember that every time you see journalists huff that they don’t get paid by the click. Stories get assigned on the basis of traffic all the time, and journalists can lose their jobs for the same reason. Making this a direct component of compensation is at least more transparent–as is the fact that each story at Forbes shows its page views above the headline.

As I write this, my debut only has 408 views. In the context of a Saturday-morning post that didn’t break news, I’d rate that as not great, not terrible. And I have time to figure this out, given that business at other clients has slowed or, in the case of Yahoo Finance, ground to a halt.

In six months, I may decide that this experiment–and its key benefit of letting me write and publish as I see fit instead of waiting for an editor to okay a pitch and then edit my copy–was worth it. Or I may put this down as another case of my successfully finding something that didn’t work. Either way, I suspect I’ll know a lot more about the dynamics of online readership after seeing my metrics move in real time on a site with an exponentially larger audience than this blog.