Don't Mess With Taxes

Still clipping after all these years

I use coupons.

I have since I graduated from college, moved into an apartment of my own and suddenly had to make a full rent payment without any roommate contributions.

With a first job that paid next-to-nothing (but one I loved anyway), I needed all the financial help I could get. I was grown, proudly independent and didn't want to place a dreaded long-distance call to the parents to ask for a few bucks to tide me over.

If I couldn't figure a way to pay rent, utilities and still afford the occasional gathering at The Depot for drinks with coworkers, then what was the point of life anyway?

So I started clipping coupons.

Back then, most were printed in the newspaper's weekday food section. A few glossy inserts showed up now and then, as did the occasional mailer packet with cents-off sheets, but the old newsprint variety was the mainstay. I cut until my hands were covered with newsprint.

At first I made the novice mistake of buying something because I had a coupon. Thankfully, I soon realized it was an evil marketing ploy and it was working. I was spending $1.50 for an item I normally wouldn't purchase just to save 15 cents. Better I should save the whole $1.65. Duh!

I also learned that coupons are more useful if they're accessible. So I emptied out the green plastic card box that was serving as my phone/address file -- I needed a real Rolodex anyway -- and typed up labels for things like "meats," "fruits and vegetables," "medicine" and "snacks" to stick over the A through Z tabs. This box started accompanying me on every grocery store visit.

The conversion to consummate couponer came when I realized that the scraps of paper are most useful when they haven't expired. So I took to spending an evening before the start of each month going through all the carefully categorized coupons in my box.

This monthly ritual survives today, as does the green box. I pull out all the coupons in each category that expire in the coming month and place them, still in the order they would be if behind the card dividers, in the front of the box. That way, they coupons that have the shortest life span are right there in front of me as I wander down the store aisles.

I'm happy to say that I don't really need the coupons anymore (knock wood!). It's been many years since I watched my bank account drift down to a mere 63 cents. That was so long ago that my bank back then didn't even charge a fee for falling below a certain balance amount. Plus, I have the hubby's income to depend on now!

But using coupons is a habit I can't quite break, and really don't want to.

Sunday afternoons, I flip through the inserts to see new coupons for  new products featured alongside favorite old goods that are getting a special manufacturer push. It's also a hoot to see Roger Clemens hawking SuperPretzels or those tacky elastic waistband slacks (two pair for $7.98!).

Most of all, though, there's that little thrill of victory when the cashier hands you the register tape and it reveals that you saved $6.84 that shopping trip. Heck, that's a Venti-and-a-half Frappuccino! Or, with a few more coupons, maybe some of those slacks.

My goal used to be to save enough with the coupons to pay for the newspaper subscription from which I got most of them. I usually accomplished that and more.

I still keep track of what I spend on groceries and how much I saved with coupons. But now I look at them as a way to cover some the sales taxes that seem to apply to more and more products.

Take, for example, the facial cleanser I bought yesterday. It's expensive but I like it and was thrilled that I had a $1-off coupon for it. It was about to expire, so I headed to the store.

Now Texas doesn't have an income tax, which is nice, but the state makes up a lot of that lost tax revenue through sky-high state and local sales taxes. Just how high hit home yesterday.

This one product included a $1.10 sales tax charge. When the young man who rang up my cleanser told me the price due, I reminded him I had a coupon, a dollar-off coupon, he needed to apply. He nicely told me he scanned it and I sheepishly handed over the money.

Wow! Doing math in my head is definitely not one of my talents, so I was doubly surprised by the tax amount. I casually checked the register tape as I walked out and the kid was right. $1.10 in sales tax. At least I only ended up paying 10 cents more than the shelf price!

No expiration date: I guess my experience with the coupon yesterday was sort of payback for my amusement a few weeks earlier at the expense of another young cashier.

As he was finishing ringing up my groceries, I handed him a handful of coupons and he dutifully starting running them across the scanner. Suddenly, we heard that annoying beep indicating that the machine wouldn't read one of them.

No, I wasn't trying to slip one past the kid or the store. The coupon simply had no bar code.

The cashier freaked out. "Whoa! What's this?" "A coupon." "It doesn't have code." "No, but it says 35 cents off and 'No Expiration Date' so it should be good."

Yes, it was one that had lived in my box for probably close to 20 years. I don't know why I hadn't used it before, or what prompted me to cash it in this trip.

"Jim, come look at this. No bar code!" So Jim, the bagger, and another young employee at the next register all came over to look at the relic from coupon days of yore (and, I imagined, the strange woman who carried such items around in a green plastic box). It was sort of an anti Bush pere moment.

After a bit more discussion of the bizarre old piece of paper, the small group dispersed -- Move along, people. Nothing but ancient shopping memorabilia here. The young man manually punched in the cents off amount and I was able to head home, leaving the whippersnappers with a story to tell and me 35 cents richer.

Yep, you just don't see coupons like that nowadays. But thanks to my coupon organization and utilization skills (some might say coupon OCD), I made sure that that manufacturer honored the now impossible-to-find coupon pledge of "No Expiration Date."

Celebrating frugal tendencies: Mighty Bargain Hunter hosts Festival of Frugality #12 this week. My blog entry about high housing prices, Getting and keeping, is part of the collection. Check out the full Festival for more low down from bloggers who love low prices.

More festival fun! The 13th edition of the Festival of Frugality, "a weekly compendium of the finest from the frugal blogger," is now up (March 7) and includes this confession of coupon clipping. This week's host is Simply Thrifty, so head on over there for some money saving tips.

Tax tattlers could cash in

San Francisco now offers up to $500,000 to unofficial tax police who turn in property owners who've evaded paying tax on their holdings.

According to a story by Bloomberg News (and printed here in the Houston Chronicle), San Francisco's new city ordinance appears to be the first citizen-watchdog program related to property taxes in the United States.

In fiscal 2004, San Francisco collected $1.18 billion in property taxes. City officials say they can't put an exact amount on how much tax revenue could be recovered, but the city assessor told Bloomberg that San Francisco's current property tax collection process "is costing the city millions of dollars."

The process to which the assessor refers is one established by California's famous (or, in the eyes of some, infamous) Proposition 13, which was passed almost 30 years ago. Under that law, a property's assessed value, upon which taxes are based, doesn't change until it's sold.

To avoid facing the new assessment and generally higher taxes that follow, property transfer participants sometimes try to hide the transactions.

But now, San Francisco's assessor has the discretion to pay informants out of any back taxes that are collected. Some tax tattlers already have contacted authorities with potentially lucrative information on violations.

It's obvious what the buyers get out of the process, but this story doesn't say how it benefits the seller. Maybe you have to agree to keep the deal on the down low to move the property.

Also, I'm fascinated by the confidence that California apparently puts in its citizens to report their new, potentially higher taxes. The story says, "Tax officials rely on buyers and sellers to declare ownership changes so the higher taxes can be collected promptly rather than retroactively."

Wow! How did that come about? Every place I've ever lived has been diligent about recording all real estate deals, commercial and residential. And they've always been quickly made a part of the public record. In fact, that's one of our favorite sections of the local paper, and we regularly check out what properties sold where and for how much.

I guess San Francisco's ordinance may be an indication that at least there, taxing officials are starting to take the words of another Californian, Ronald Reagan, to heart: Trust but verify.

Block's boo-boo

Don't ever let your taxes make you feel stupid again. Even the pros have problems.

Last week, H&R Block admitted that it messed up its own corporate tax return to the tune of $32 million.

That sure makes me feel better about all the times I've scratched my head over a 1040 instruction or cursed a convoluted worksheet required to file for a credit.

This was Block's second tax misstep this filing season. As I mentioned here, the tax prep company earlier this year acknowledged that it had mistakenly shipped some free copies of its TaxCut software with the recipients’ Social Security numbers printed on the mailing labels. As anyone who pays attention to identity theft issues knows, that's a major personal security faux pas.

Block's latest tax blunder was in underestimating the company's state tax liability on previously reported profits. It's an issue that’s specific to company returns, and the mistake didn't have any bearing on the services it provides millions of individual filers nationwide.

"It wasn't particularly material," Alexander Paris, an analyst at Barrington Research in Chicago, told Reuters. "And it's not particularly unusual. A lot of companies are going back and reviewing their controls because of Sarbanes-Oxley and finding tax errors. But for a company like H&R Block, it was particularly embarrassing."

And it definitely made me smile.

Not that I want to engage in too much schadenfreude. I've yet to do my return this year and I don't want to tempt the tax gods to slap me down for chuckling over Block's boo-boo.

But in tax season, you gotta take your smiles where- and whenever you find them.

TODAY'S TAX TIP: Thinking of using a tax pro to file your taxes this year? Don't base your choice just on news reports. You need to find a preparer that fits your needs. For many, firms like H&R Block or Jackson Hewitt fit the bill perfectly.

Other taxpayers need more specialized help and attention. Maybe you run a small business on the side and need help deciphering Schedule C and figuring business depreciation and the many other expenses you can use to reduce the taxable income you pulled in on weekends.

You also want to make sure you pick someone reputable. As the Block case shows, even the pros make mistakes sometimes. Still, those errors are less likely if you hire someone who has good credentials and continues his or her tax education.

And you definitely want a preparer who stands behind his or work and will promptly correct any problems, regardless of who or what prompted the mistake.

You can get even more details on how to hire a tax professional in this story.

Both sides of the tax evasion coin

Irwin Schiff, a long-time anti-tax crusader who was convicted last year on federal conspiracy, tax evasion and tax fraud charges, is headed to Camp Fed for 13 years.

The judge also sentenced the tax protester to three years probation after his prison release and ordered him to pay more than $4.2 million in restitution.

While federal prosecutors are no doubt pleased, the money Schiff was instructed to hand over is just a drop in the bucket compared to what his schemes cost the U.S. treasury. The IRS says that Schiff and those he convinced not to pay taxes cheated the country out of $56 million.

Over the years, Schiff has argued that the IRS uses an improper definition of income and therefore is not entitled to collect taxes on an individual's earnings. He promoted his anti-tax position in books, lectures and broadcast appearances.

His numerous sheep, uh, supporters argued for many years that the IRS' slowness to prosecute was a de facto admission on the agency's part that Schiff's tax position was correct.

Those arguments are almost as laughable as their contention that there's no law requiring U.S. citizens to file tax returns.

This latest trial was, in fact, the third one for Schiff, who was also convicted for tax violations in 1980 and 1985. He spent a total of four years in jail back then, apparently as practice for his upcoming term.

Plus, in addition to going after Schiff, the IRS also nailed a couple of his co-conspirators, including his former girlfriend. She was sentenced yesterday, which also happened to be Schiff's 78th birthday. It's safe to assume that it probably wasn't the happiest birthday celebration he's ever had.

For his 79th, he'll probably be asking for one of those special cakes with a file inside.

Meanwhile, another well-known septuagenarian has found that working within the tax code can be pretty darn lucrative.

The New York Times reports today that "Boone Pickens, the often controversial and always colorful Texas oilman turned investor, took advantage of a temporary tax break to make a gift that propelled him into the ranks of the nation's top philanthropists last year."

The break was part of hurricane relief legislation and removed some giving limits that are based on a taxpayer's adjusted gross income.

Basically, for donations made between last Aug. 28 and Dec. 31, you (and by you, I mean mostly really rich people like Pickens and his pals) could contribute amounts that exceeded 50 percent of your income.

Even better, although the change was part of legislation related to Hurricane Katrina, the new, larger contributions didn't have to go just to hurricane-related philanthropies.

So Pickens gave $165 million to a golf-related charity at his alma mater, Oklahoma State University.

Then Pickens took the tax break a step further.

As part of the university's investment committee, he got to help direct where the money would go. So, get ready now to feign shock and dismay, the committee put the gift in a hedge fund, BP Capital Management, controlled by Pickens.

According to the newspaper, the transaction appeared to be legal under federal law. One lawyer told the Times, "Sadly, it's another case of a rich man manipulating charity for his own benefit."

Quelle surprise!

TODAY'S TAX TIP: Got a couple spare million to dole out to your favorite charity? Sorry but the tax-break door that Pickens waltzed through closed at midnight Dec. 31.

But check out this story for all the details on taxes and donations. You might be able to come up with some ideas on how to contribute now to reduce your 2006 taxes.

Or you can use the information to review the gifts you gave in 2005 to make sure you get the most out of them on your current return.

Where's the initial? One thing about the Pickens' story really bothers me, though. No, it has nothing to do with his tax machinations.

What in the heck happened to the  "T." that used to precede his middle name?

Word, and no word, from the IRS

Old Man Winter has shown his blustery face enough to encourage people to start looking for ways to keep the cold out of their homes.

At least it looks like that's the case for IRS employees, who have just put out the official word for folks seeking to take advantage of the homeowner energy credits I mentioned here.

The tax-approved items include:

• Insulation systems that reduce heat loss or gain,
• Exterior windows, including skylights,
• Exterior doors, and
• Certain metal roofs.

Energy-efficient improvements that meet the new energy bill's standards will get you a 10 percent credit on your next tax return. You can get more details here.

But while the IRS is spreading the word on this new law, some taxpayers haven't heard a peep out of the agency about 2005 filing material.

A few days ago, my aunt asked me if my husband and I had gotten our annual filing material from the IRS. She was a bit concerned since we're well into filing season and she has yet to see any forms or instructions from Uncle Sam.

Well, she -- and hubby and I and many of you -- aren't going to get that usual IRS paperwork collection this year.

Earlier in 2006, the IRS did send out almost 17.7 million tax packages. But another 15.5 million of us simply got a post card.

Actually, it was more than your standard 3x6 postcard. It's a 5x8-inch, mid-fold, four-page mailer with bright blue and yellow color splashes.

The document doesn't contain any material to help you complete your taxes. Instead, it encourages recipients to get that necessary stuff via our computers and e-file this year.

The IRS has two reasons for sending almost half of us taxpayers a post-card tax reminder instead of the full package.

First is fiscal. The agency says it costs nearly $6 million to print complete filing packets and another $5.1 million to mail these bulky things, coming to an average of 63 cents per package. By comparison, the slightly oversized postcards run about 20 cents each (bulk rate).

The second reason is administrative. The IRS wants more of us to file electronically. The agency has been ordered by Congress to get 80 percent of us filing that way by 2007, although one oversight groups has recommended that date be pushed back to 2011. Extra time or not, the IRS still is pushing e-filing.

So the postcards extolling the value of e-filing went to taxpayers the agency determined were likely to use a computer to do their own returns.

My aunt didn't get the package because she had an accountant file her return last year. The IRS expects folks like her to use their accountants again this year, and most tax preparers are on the e-fling bandwagon. She's not sure if she never got the postcard or simply threw it out as junk mail without giving it a close look.

We did get our postcard. It's right here on my desk, which is how I was able to provide such a complete description a couple of paragraphs earlier.

And I did use a computer tax program to complete our return last year. But I printed it out and mailed it with the check for what we owed because I didn't want to pay the extra fee that's tacked on to credit card tax payments.

I know, it's not that much and I had to pay anyway, but it was just the principle. My line in the sand last year was what I owed Uncle Sam and not a penny more than 29 cents to anyone to get it there!

I'll use the software again this year to fill out our 1040 and other forms, but I haven't run the numbers yet to see if we'll owe. If we do, I suspect I'll once again write the old-fashioned paper check.

And who knows? Maybe we won't owe this time.

In that case, then we all will be happy, the IRS because it'll finally get our documents electronically and the hubby and I because we'll have a refund coming our way.

TODAY'S TAX TIP: If you're like us and haven't e-filed yet, you can read more about your electronic tax options here to help you decide if this is the year to change your filing ways.

And if you're also like us in that you owe, but unlike us in that you're willing to send the IRS its money electronically, this story has information on ways to e-pay your tax obligations.

Getting and keeping

In the last few days, two housing stories caught my eye.

The first was from the Wall Street Journal, where reporter Ruth Simon looks at Census Bureau data that indicate that after climbing steadily for a decade, the United States' homeownership rate has leveled off. If you have a subscription to the paper, you can read the full story here.

If you don't subscribe, here's a telling excerpt from Simon's article:

"It's not entirely clear why the homeownership rate seems to have plateaued. Some economists say that the new data could be a sign that declining affordability is finally taking its toll on first-time home buyers."

Then today, the New York Times tells us in this story that over the last decade, homeownership among minorities passed the 50 percent threshold, crossing that mark in 2004. That positive news, however, belies a troubling trend.

According to the story by Vikas Bajaj and Ron Nixon, "… in the last several years, neighborhoods with large poor and minority populations in places like Cleveland, Chicago, Philadelphia and Atlanta have experienced a sharp rise in foreclosures, in some cases more than a doubling … ."

It seems that many home buyers are learning the hard lessons of getting and keeping, and that they're two different things.

For some, based on the Wall Street Journal report, getting into a home is the major problem. All the attention lately has been on a housing bubble, worrying whether owners will end up losing money on houses they purchased a few years ago.

But that bubble has, in essence, acted as a force field for many buyers, especially those looking to get into their first home. This phrase from the WSJ article jumped right out at me: declining affordability.

We bought our first residence, a condo, in the Washington, D.C., suburbs back in 1982. To get into the two-bedroom apartment (with two baths, small terrace, separate dining room and a nice little wood-burning fireplace in a corner of the living room), we had to sell my husband's car to come up with the down payment. My car was newer, so we kept it.

The few thousand we got for his Pontiac Grand Prix was enough to get us into our first home. I can't imagine any young couple being able to pull that off nowadays, especially in the national capital region or any other major metropolitan area. Again that phrase: declining affordability.

Lower interest rates over the past few years have helped a lot of buyers get into some of today's pricier homes. But when prices kept going up for basic housing, not just for estate-type residences, many buyers had to look for creative mortgage options: ARMs, nothing-down loans, bridge loans to cover a down payment, interest-only mortgages. The list is limited only by the lender's and buyer's imaginations and willingness to take a chance.

Of course, leveraging yourself to get into a house is nothing new. When we bought each of our houses, we tried to stay within our means. On the ownership ladder of each neighborhood, we were near the top in overall financial stability. But in each community, we also saw a lot of people hanging on by their fingernails to that bottom rung.

They used all their cash or borrowed enormous amounts just to move into their at-the-time dream home. Then they had to face that issue of keeping it.

What happens when you have no money left for maintenance or repairs? Or your mortgage goes up because your lender has to escrow more to cover your increased property tax bill? And did you forget to factor in that a bigger house generally means bigger utility bills?

We watched some neighbors who scraped to get into their homes be forced out of them because they just couldn't afford to live in them. This was addressed in the Times' story: Owners were able to work around the affordability issue to get a house, but they had problems keeping it.

These articles sure punch some holes in some longstanding beliefs. Isn't owning a home supposed to be the culmination of the American dream, not to mention one of the best financial (and tax) moves a person can make? How did the economy and the housing sector in particular get so out of whack in just a quarter of a century?

I'm not an economist or mortgage expert and I don't play one here on my blog, so I have no magic answers to these distressing questions.

But I do know that while trickle-down economics doesn't work, the reverse is true: What's bad for the least among us is definitely not good for any of us.

TODAY'S TAX TIP: As I mentioned earlier, there are some tax advantages for homeowners. Those sometimes sky-high property taxes (like we pay here in Texas -- Austin, at least! -- to compensate for the fact we have no state income tax; the tax collector always finds a way to get to you!) can be deducted. So can mortgage loan interest. For more house-related tax breaks, check out this story I wrote for Bankrate.com.

And it looks like we Texans aren't alone in dealing with high property tax bills. Another New York Times' story today reports that:

"Soaring home prices, shifting population and sporadic budget crunches have combined to make property taxes one of the thorniest sources of voter anger and legislative angst in dozens of states. Call it the dark side of the real estate boom."

Dreamland: Andy, a reader from right here in Austin, writes to tell me that the 084 from my dream the other night is a New York issued Social Security number. Hmmm. Still trying to figure out what prompted my brain to want to take a night-time trip to the Empire State.

Parting shot: Taser International has announced that it will produce a Taser shotgun for long-range electrifying. Various reports on the new weapon can be found at CNet News, Chicago Tribune and  this Wisconsin TV station Web site.

Three words: Don't. Tell. Cheney.

Carnival update: Check out the 11th Carnival of Investing, hosted by Retire at 30.net. It went up Feb. 27 and this post is included, along with many other valuable items from other financial blogs.

Taking another spin on the Carnival carousel, this entry also is part of the 12th Festival of Frugality, hosted by Mighty Bargain Hunter. Check it out for a wealth of money-saving tips.

And chronologically last, but not least, the Carnival of the Vanities #180 went live on March 1, with this post as part of it. The Cigar Intelligence Agency, this week's host, does a really nice job of placing the posts in such wide-ranging categories as culture, ethics, economy, religion, politics, satire (aren't those last two the same thing?) and blogging itself. Take some time to drop by and read the myriad posts, chosen by the authors as their best recent works. You won't regret it.

Night terrors

I'm not one of those women who dreams her man flirted (or worse) with some other woman and then wakes up all angry at him for what happened in her nightmare.

No, that's just not me. Plus, I don't tend to have those sorts of dreams.

Unfortunately for me, my dreams wander to more esoteric, some (like my hubby, whom I cut so much dream slack) might say even geeky areas.

Regardless of what they're about, I know dreams are just a way for the brain to sort out all the disparate information it took in during the day (or days) before.

Unrelated occurrences and people (sometimes people I don't even know!) somehow end up in a bizarre mélange of time-distorted episodes. Most of the time, I can see immediately what prompted the surreal nocturnal escapades.

My brain must have a lot of crap to sort, because my dreams, in addition to being on rather obscure issues, tend to be pretty elaborate. Maybe that's why I wake up tired so often.

Restfulness or lack thereof aside, I'm convinced some of my overnight scenes could be stitched together to make great TV programs (I'd say movies, too, except they're usually not long enough to sustain a feature film). Sometimes they even have natural breaks where the commercials could go. This, obviously, is a result of watching way too much of the boob tube in the first place.

Last night's dream, while probably not worthy enough to storyboard for a network executive, was nonetheless pretty interesting (at least to me!).

I was at a doctor's office. I don't know what kind of doctor or even why I was there, although I suspect the dream was prompted by complaints earlier in the evening of a nagging back pain. My husband said "go to the doctor" and I said "I'm tired of doctors," having finally just finished last week the round of follow-ups from my initial consultations back in November that I wrote about here.

Or maybe I was still hashing out the latest "Grey's Anatomy" twists. When, when, WHEN is McDreamy's wife going to leave town? And I can't believe Meredith is going to break George's heart like that!

Anyway, I was getting ready to leave the doctor's office when a nurse came out and told me I needed a new Social Security number. Apparently the doctor's office administrator had decided it would make her job easier if she could just start from scratch with my records, new tax ID included.

I was mystified and more than a little dubious, but not wanting to make trouble -- yeah, yeah, I can hear, even over the Internet, the chorus of laughter from everyone who knows me and loves me for my trouble-making ways; the ROTFLOL is being led right here at home by my loving husband -- I said OK.

I sat down in the crowded waiting room and in a few minutes the nurse came out with my new Social Security card. I don't remember all nine digits, but it started with 084. I know Texas numbers start with 4 (or they used to); if you know what region begins with 0, let me know.

Then the real me appeared. "Wait just a minute," I told the nurse. "Let me talk to your business office." I marched in there and lit into the woman who so wanted to reassign me a new official identity.

I proceeded to tell her (and three other people who were in there) that (a) despite the new card I was handed, they had no authority to give me a new SSN, (b) I just finished not a month ago getting errors on my credit record associated with my old number cleared up (hassles detailed here), and (c) my life was much too complicated and dependent on the number that I've had since my teen years to change it now.

There was just no way I was going to recreate my online bill-paying system under a new ID!

I also was sure these medical office employees, none of whom looked familiar, gave me a new SSN so that they could use my old ID for something nefarious, probably terrorist-related.

This obviously was inspired by the derring-do just a few hours earlier of Jack Bauer on "24." I love the rogue Jack. Don't go back to CTU, Jack! Get Tony out of the hospital and y'all go out and save the world sans worthless bureaucratic bosses!

Speaking of which, who's with me in thinking that the new Hobbit CTU director is probably one of the "higher in government" guys that Nathanson mentioned before he was gunned down? But I digress.

To cut to the dream's chase, I prevailed. I think the tide turned when I told the office manager that my medical insurance was keyed to my old SSN, so if they wanted to get that payment, they'd better leave my ID number alone!

Then I woke up.

Yeah, like I said, not exactly the pilot for a new fall show. And I've yet to determine why I felt the need during REM sleep to address my tax identification number.

Maybe it was because I've finally started sorting through the collection of documents I'll need to do my return. All those papers with my good, old, familiar SSN on them. Or maybe I felt a need to come up with a blog hook for TODAY'S TAX TIP, which is make sure your Social Security number is correct on all your tax-related documents and especially on your 1040.

If you transpose the number, the IRS will kick your return right out. The same will happen if you have a wrong SSN for a spouse or dependent. Your whole return could be rejected or a credit or deduction related to the person with the questionable SSN could be nixed.

So write it down correctly on your tax return, guard your SSN from prying ID thieves (like those conniving medical office employees!) and here's to happier, more relaxing dreams tonight.

Listen to two jokes

... and call me in the morning.

Apparently, Reader's Digest was right. Laughter is the best medicine.

Most of the filmgoers who sat through Patch Adams might disagree. But Association for Applied Therapeutic Humor members would probably argue that cinematic merits (or lack thereof) aside, the premise of the Robin Williams' flick is valid. Humor helps heal.

AATH, which describes itself as an international community that believes humor can improve people's moods, as well as aid in more serious illnesses, was formed almost 20 years ago by a group of healthcare professionals. Today, its membership includes not only medical personnel, but also those in education, business, faith and, yes, humor fields.

While the organization doesn't limit its exploration of humor benefits to a medical setting, that area is definitely one that has a widespread appeal.

We've all been there, at a critical point trying to decide whether to laugh or cry. It might have been when we heard our physician's diagnosis or, just as likely, weeks later when we got his bill and accompanying (undecipherable) insurance benefits statement. Whenever you have a choice, says AATH, definitely opt for a big ol' belly laugh.

Chuckling could be heard in downtown Austin this past weekend as AATH held its annual meeting here. You can watch this video from our local news station, Channel 8, in which conference participants discuss the health benefits of humor. Be warned: You also have to sit through a local furniture store ad, as well as a Dan Rather PSA. Keep smiling, though!

So could you use the AATH argument to claim your cable or dish TV bill as a deductible medical expense? The connection does, after all, provide access to Comedy Central. I don't think so.

The IRS has heard such assertions before, like the one from a high school Spanish teacher who tried to write off his cable bill since he got Telemundo and Univision.

Want to bet who got the last laugh when that audit was over?

Power of pets: In addition to humor, pets also have been shown to help speed up patient recovery time, as noted in this story. And the cats in this Tennessee nursing home are helping brighten the lives of its residents.

Bloggers who know the complete and incredible value of cats are showcased this week in the 100th edition of the Carnival of Cats. I am delighted to report that my post, Dog balls, was chosen to be a part of the celebration, hosted by Bloggin' Outloud. If you haven't read it, don't be deceived by the title; I might be surrounded by dogs, but I am definitely a cat person, as the post reveals.

Money carnival: Also this week, another Don't Mess With Taxes entry was selected for inclusion in the latest Carnival of Investing. My By the numbers, a look at the financial Rule of 72 and my personal Rule of 2, is part of this 10th compilation of notable investing and money topics, hosted this week by My Money Blog.

Home hot spots

One of the fun (yeah, for the moment, let's call it fun) things about moving into a new (and by new, I mean different) home is learning its quirks.

That's what we're doing now during our latest cold snap.

Yes, winter returned to Central Texas this weekend. It's supposed to be a brief visit; they forecasters are calling for temps near 80 by the middle of next week. But for the last two days, we've been dealing with mercury in the low to mid-30s and patches of freezing rain and drizzle.

For all the hearty folks in the northern half of the country, I know that doesn't sound like much of an ordeal. But for a couple that spent the six previous winters in South Florida, it's a literal cold slap in the face.

I wanted winter again. I got it. And I'm enjoying finally wearing the sweaters and jackets that were sealed in a Space Bag under the guest room bed in our Florida abode.

I must admit, however, that six years of no winter, combined with six added years to my increasingly creaky bones, makes me glad that this is about as cold as we're going to get and that by Wednesday I'll be complaining that it's too damn hot for February. (Well, if the weathermen are right, it will be!)

Until then, we are mapping the cold and warm spots in our house.

Trying to be energy conscious, both in an effort to conserve natural resources and our bank balance, we've set the thermostats at 69 degrees. I know, they (whoever they are) say 68, but that one extra degree does seem to make a lot of difference.

We're also thankful that we spend a large portion of each day upstairs in our home offices. Yes, our science teachers were right: Heat does indeed rise. So for the most part we're very toasty.

We would be even toastier, though, if we could figure out a way to spend 24 hours in the three-square-foot landing at the top of our stairway, the second-warmest place in our house right now. This is one of those quirky areas I mentioned.

For some reason, it's a heat trap and we can't quite figure out how. The stairway itself is open, facing our predominantly-glass front door and three surrounding glass panels. These are, as you can imagine, very icy to the touch, keeping the foyer just a few degrees warmer than the inside of our refrigerator. (The reverse, naturally, is true in the summer, when the panels act as magnifying glasses and we are the ants who get fried.)

But energy effectiveness be damned! They are so pretty, with beveled panels and decorative Lone Stars embedded in several panes! So we deal with the cold in the foyer and the nearby stairway.

In fact, about three steps from the top of the stairs, a spot roughly even with the foyer's top horizontal glass panel, you walk right through an Arctic zone. Take just three more steps, however, and voila! Welcome to our local tropical retreat.

All the warm air rising hits the upstairs ceiling and bounces into the three-by-three landing area. And there it stays.

The warmth refuses to budge. It won't go into the adjacent guest bedroom. And it definitely won't flow a few more feet into what we call our game room, which actually is simply the large open room above our two-car garage -- our unheated, unairconditioned and basically uninsulated garage. So the room above it stays colder and hotter that the rest of the home each winter and summer, respectively.

When we first discovered the landing hot spot, we tried various ways to push the heat elsewhere: open only doors to the rooms we wanted it to flow, wave towels at the area as we passed by it in order to push the heat into the nearby colder areas. Nothing works.

Heck, we can't even get the heat to move one more foot to warm up the wall where our upstairs thermostat is located. If we could accomplish that, we could keep the second-floor heating unit from coming on so much. But the temperature gauge remains just out of the hot zone.

So we're stuck with an unlikely warm spot during the winter. At least we know where to go when we're upstairs and feel the need to warm up a bit more.

Oh yeah, I said this was the second warmest spot in the house. The warmest is our first-floor half bathroom.

Since the door to that small, windowless room usually remains closed, the heat pumped in there from the vent stays in there, making it the most comfortable, if not the most aesthetically pleasing, spot to escape winter's chill.

Tax rewards for energy-efficient homes: My husband contends that the absolute warmest place is the bed, hunkered down in the covers. He's got a point.

Unfortunately, we all have to eventually crawl out and face the cold cruel winter world.

We, and you, might be able to make the daily rising a bit more palatable via some home improvements. And it might even pay off at tax time.

The Energy Policy Act of 2005 now offers homeowners a tax credit of up to $500 for specific energy-saving products installed in homes between Jan. 1, 2006, and Dec. 31, 2007. Eligible improvements include energy-efficient windows, insulation, doors, roofs and heating and cooling systems.

A couple of downsides here. One, the various credits are all over the board, both for types of improvements and tax savings. Some of them, such as relatively simple ones like installing more energy-efficient windows, are capped at $500 and what you spend in both 2006 and 2007 counts toward that total. So you can't put in some triple-paned, weather-resistant windows this year, take your $500 credit and then do the same in 2007 and get the credit again. Use up the $500 now or December 2007, it's all the same; you only get one $500 credit.

The new energy law also provides a credit for "qualified photovoltaic property," that is, those panels that use the sun to help heat your home. This is not subject to the $500 cap, but there are some limitations here, too.

You can't use the credit for a solar swimming pool or hot tub heating system. And the maximum credit amount is the lesser of 30 percent of your expenses or $2,000. Since a whole-house solar heating system usually runs around 10 times that amount, the federal credit is probably not enough to convince you to convert to a solar heating system. But it might be worth replacing your old electric or gas water heater with a solar-powered one. The Solar Energy Industries Association has more information.

And since you can use one $2,000 credit for a solar panel to heat your house and another $2,000 credit for investing in a solar water heating system, you get a bit more bang for your tax-saving buck.

EnergyStar.gov offers a chart with specifics on tax-credit eligible home improvements.

And don't forget to check with your state energy and tax offices, as well as your local energy provider. Some offer incentives if you go the extra mile to help conserve natural resources.

But until we get any of these energy upgrades made, with or without tax assistance, it's off to the landing (or bathroom) for a heat fix!

One good egg, one scrambled mess

U.S. Olympian Joey Cheek won a lot more than a medal this week in Torino. He also won the hearts and respect of millions.

Cheek captured the gold in the 500-meter speedskating event. Then he announced that he's donating the $25,000 he will get from the U.S. Olympic Committee for the win to Right to Play, a group that uses sports to help needy children worldwide.

If he winds more medals, that money also will go to the organization.

Right to Play is supported by Cheek's childhood hero, Norwegian speedskater Johann Olav Koss. It was while watching Koss compete that a young Cheek decided he wanted to master the same sport.

Cheek has specified that his donation go to help children of the Darfur region in Sudan. He also encouraged the games' corporate sponsors to match his contribution. (No word yet on any takers.)

You can read more about Joey's Olympic and giving spirit in this Washington Post story.

In the wake of Cheek's winnings and generosity, the folks at TaxProf got to wondering whether the IRS would get involved. The law professor blog notes:

"Every two years, a topic of conversation among tax folks is the tax treatment of Olympic athletes. One issue is whether the medals themselves constitute income -- a tantalizing line is found in Commissioner v. Wills, 411 F.2d 537 (9th Cir. 1969), requiring Maury Wills to report as income the value of the Hickok Belt he received for being named athlete of the year."

But what about Cheek's reduction of his Olympic income through the charitable gift of all his winnings? Will it meet the IRS philanthropic parameters and pass tax donation muster?

Depending upon the type of charity you give to, you generally can't deduct donation amounts that are greater than 50 percent of your adjusted gross income (and in some cases the limit is 30 or 20 percent). When you give more than the limit, you have to carry forward your excess contributions to deduct in future tax years.

Even though the IRS is facing a mighty tax gap, the agency's image certainly would take another hit if it slaps this young man's wrist over his simple act of random kindness.

Of course, the law is the law. And while I'm sure that the tax deduction is the last thing on Cheek's mind, it sure would be nice if he got some kind of remuneration out of his success on the skating track.

Perhaps a member of Congress (any of the North Carolina delegation, since that's from where Joey hails) might want to consider some specific legislation providing for special tax treatment of athletes in international competitions who opt to forgo their winnings in the name of charity.

Tax laws get tweaked for special circumstances all the time. In fact, the charitable donation rules were changed for this tax season to accommodate the outpouring of aide in the wake of Hurricane Katrina. You can read more about those changes and charitable donation tax laws in general here.

A scrambled mess: The other big news this week was, of course, the vice president's shooting mishap, a perfect of example of going from the sublime generosity of a young athlete to the surreal actions of an aging sportsman.

The good news: Harry Whittington is out of the hospital. As he headed home, he told reporters, he was "lucky." No shotgun pellets, Sherlock! More comments from Harry in this Bloomberg report.

If you want to read the official shooting report, FindLaw has it posted here.

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