Archive for December, 2009

The Resident is an online video show which has been featured on Yahoo! for some time now. One of the regular n features is a man-on-the-street interview session where random strangers are accosted and asked about various topics.

In one recent segment (appropriately called Beyond Our Means) the host discloses that she is $80,000 in debt and asks people about their own finances. Of course most lie about being in debt at first, then open up as they are grilled.

It’s pretty interesting. Enjoy.

I love doing my taxes. Seriously. I can’t wait until January when I get all my W-2′s and 1099′s and X38′s (OK, I made that one up) so I can get back money owed to me in the form of state and Federal tax refunds. It’s not a ton of cash but squeezing every last dime out of Uncle Sam is one of my favorite pastimes. And it should be yours, too.

One of the best ways to minimize your taxable income and maximize your refund is through charitable donations. It’s even better when those donations are not in the form of cash.

Spring cleaning is great, but it’s not a cash cow. Look around your home for things you no longer want or need because you still have two days to donate unwanted items to charity.

The tax code is a minefield, and I am by now means an authority. But here are a couple general guidelines about charitable donations from the tax experts at H&R Block:

• You can deduct your contributions to charitable (non-profit) organizations only if you itemize your deductions.
• You can’t deduct the value of your time or services spent on charitable work, but you can deduct mileage or vehicle expenses if you use your car for charitable purposes.
• Your deduction for charitable contributions generally is limited to 50% of your adjusted gross income.

Due to the fact that time is of the essence now, the first thing you want to do is find your local Salvation Army or Goodwill donation center and get their hours. Then you’ll want to look for clothes and housewares that you wish to donate. Catalog it all (in case you are audited by the IRS) and determine the value of each item. There are a number of websites that can help in this regard. I like the charitable donation valuation calculator at Bankrate.com.

Your local public library is also eager to accept donations of books (in good condition), CD’s, DVD’s and records. Because I have switched most of my music to MP3 format and rarely watch my DVD collection anymore, I’ve given away a lot of this physical media to my local library. I have less clutter in my home, have contributed to my local community and will see greater tax savings.

You’ll need a receipt for your donated items, but don’t expect the charity to provide you with confirmation of their value. Typically you’ll get a blank receipt that you’ll need to fill out yourself. I like to staple this receipt to my own list of donated items. For especially valuable items (e.g. designer suits, electronics) I like to take a digital photo of what was donated as well.

The IRS has more tips for deducting charitable contributions on its website at http://www.irs.gov/newsroom/article/0,,id=106990,00.html.

Now’s the time to hit your attics and basements, get rid of that stuff and boost your tax refund in the process. And file your return as soon as possible to get the cash you want to pay down your debt.

With the new year right around the corner a lot of the personal finance websites are rolling out their annual “ways to save money in the New Year” articles. Since it’s going to be 2010, ten seems the be the magic number. For example, you can read SmartMoney’s 10 Ways to Save Money in 2010.

But I’m inclined to focus on one thing at a time and one easy way to cut spending every month is to pare down your monthly phone bill. I am a big fan voice-over-IP telephony, which uses your existing Internet connection to place and receive calls using standard phones. The biggest player in this space is Vonage (which I use and love) and at about $32 a month saves me a nice stack of cash. But I’ve been intrigued by a new player in this space, a company called Ooma, which promises even greater savings.

Ooma has hit the market with a big radio ad campaign, but how does the offering measure up?

Like Vonage, Ooma lets you make free U.S. calls over the Internet, with your existing home phone. You get free U.S. calls, 911 service, caller ID, voicemail, call waiting, and low cost international calls. The big difference is that with Ooma, there are no monthly fees. How is this possible? The service requires that you buy a special device, the Ooma Telo, which is how the company makes money and how you can connect your phone to the net. The cost for the unit is about $250.

So were I to switch to Ooma, I would break even in eight to nine months and after that all my domestic calls would be 100% free. Seems like a no-brainer, right? It would, except for the fact that many of the features that I currently enjoy with Vonage are only available with Ooma Premier which costs $9.99 a month.

Ooma Premier offers features like three-way calling, call screening, call rejection, call forwarding and priority support. One big upside is that this would also allow me to port my existing phone number, a $40 value. Signing up for Ooma Premier would push my break-even point to two years down the road, and I’m not sure that Ooma will be around that long. Vonage has had major legal troubles and was on shaky ground it seemed for a while. But if they went under, I would not have lost a $250 investment.

If you call overseas a lot, Ooma offers an international plan. You can call overseas for $4.99 a month and for that receive 500 minutes of calling per month to 70 countries worldwide.

I’m still interested in Ooma, but would like to see it gain more traction before I consider swtiching. Anyone out there using Ooma? Let us know what you think.