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The Money Pit Part Deux: Tax Benefits for Homeowners? I’m Still Waiting March 10, 2009

First of all, thanks to everyone who commented on the first Money Pit post! Since so many of you asked about the tax incentives for homeowners, here’s what I have to say about that:  it’s a crock. I fell hook, line and sinker for this myth, and no one, not even my own parents, set me straight when I bought my home. Two full tax years later, I’m still waiting for these so-called benefits to appear. Maybe in some other market you’ll actually see a benefit, but in ho-hum Middle America, it just isn’t working.

Let’s refresh the basics:

I bought my home in Little Rock with a purchase price of $215,000 and a down payment of $10,000. My mortgage is broken up into two parts: $172,750 at 6% and $32,250 at about 11%, for a total of $205,000. My husband and I together have an annual household income of just under $70,000.

Before I bought a home, I believed everyone who told me there was an awesome tax benefit coming my way-friends, family, even random newspaper and magazine articles.  None of these sources explained HOW it was possible, but they all agreed that it was. Through some strange tax code alchemy, my mortgage interest would become this awesome way of ripping off the government. Sounds good? Of course. So I went along with it.

The ugly truth:

When you prepare your taxes, you deduct the total amount of interest you paid, along with any other deductions, from your taxable income. The folks from Countrywide (assholes) tell me that this amount is approximately $10,778.90 on my first mortgage, and $2,582.30 from my second for a total of $13,361.20.

Luckily, I am able to add to this total with a few other small itemized deductions: my husband works from home so we are able to deduct a portion of our utilities commensurate with the room he uses solely for work, the amount he pays for his own health insurance, and we donated his ugly single guy furniture to Habitat for Humanity and wrote off the value of the donation. This gets our total itemized deductions up to $15,763.

The standard deduction for a married couple filing jointly is $10,900. So right off the bat, owning my home has given me $4,863 of extra tax write-offs. But don’t get excited yet-none of this represents any actual money without two things: my taxable income, and the figure from the tax table that tells me how much tax I owe for the year.

Let’s do some math, with a little help from Jackson-Hewitt (these numbers are taken directly from our prepared taxes). Our total wages are $68,181 with $4,312 in adjustments (student loan interest, moving expenses, etc.). This puts our adjusted gross income at $63,869. From this, we get to deduct our exempt amount of $6,800. Our taxable income total is now $57,069.

NON-HOMEOWNER: If we did not own a home, we would not bother itemizing. Our standard deduction for a married couple filing jointly in 2009 is $10,900. We subtract this from our current taxable income ($57,069) for a new total taxable income of $46,169.  Based on our tax bracket, our tax due is $1,670 plus 15% of the amount over $16,700. This equals $6,090.35.

HOMEOWNER: Our itemized total is $15,763. We subtract this from our current taxable income ($57,069) for a new total taxable income of $41,306. We are in the same tax bracket, so our tax due is still $1,670 plus 15% of the amount over $16,700. This equals $5,360.90.

The total amount of tax I saved by being a homeowner is the difference between $6,090.35 and $5,360.90: $729.45.

Let’s pause for a moment of reflection:

I’m sitting here in stunned silence as that number stares me in the face, bold in more ways than one.  I am being robbed, and it’s as if I opened the door and put out the welcome mat for the thief.

I have paid $13,361.20 in interest, $2,700 in property taxes, a year’s worth of maintenance and homeowner’s association fees, plus a year’s worth of homeowner’s insurance for the unbelievable privilege of saving $729.45?  That’s the great tax savings I’m supposed to be so damn happy about? Are you freaking kidding me?

I had to deal with mice in the attic, a window broken by a freak accident, a brick mailbox plowed over and destroyed by a joyriding teenager, and all the other wonderful spur-of-the-moment surprises that YOU as a homeowner get to pay entirely out of pocket, and I’m supposed to be happy about it just because I owe $729.45 less in tax?  I expended more than that this year in home maintenance alone. Great savings.  Thanks a lot, Uncle Sam. Say hi to Typhoid Mary, will ya?

But the fun isn’t over. The total amount my husband and I have had withheld is $1,100 over the amount of our tax due (along with another $750 from the state of Arkansas). Our total tax refund amount is $1,850.  A small consolation, but hey, we still get to play with almost two grand, right? Wrong. Our yearly property tax bill arrives at the same time as the refund, and guess what? We still have to pay out of pocket. Our property taxes are $2,700, so once I fork over the ENTIRE refund, I’m still $850 in the hole.

Now let’s jump backward for a moment. If I didn’t own a home and we took our standard deduction, we would have paid a bit more tax, and only gotten a federal refund of $370.55, along with a state refund that would amount to slightly less than my homeowner-entitled $750. Let’s say I only ended up with $900 total in refunds….even so, it would have stayed in my pocket. No property tax, no maintenance, no nothing. I could put it in savings, take a cruise, or buy a new flat-panel TV. Now which sounds better to you…paying $850 out of pocket, or going on a Caribbean cruise that’s already paid for?

But, you might say, only idiots get their property tax bill at once. Most normal people fold it into their mortgage payment. (Why in HOLY HELL did no one tell us we’d be sorry if we didn’t do this?)  If we’d done that, we’d have paid the tax gradually and gotten to keep our refund. True, but my monthly payment would go up $225/month. Now, we don’t make so much money that that wouldn’t take a major chunk out of our budget. There are things we wouldn’t be able to do if that money had to come out of pocket…routine home maintenance would be put off, doctor bills and vet bills would probably be credit carded, car repairs would probably be credit carded, and we would in no way be traveling or shopping or putting small bits of money back into the economy. When we got that $1.850 refund, it would be eaten up by repairs and paying down high-interest credit card debt.

What can I learn from all this?

As a homeowner, I will never get to keep my refund. Never. I will always have to sign over whatever I get AND THEN SOME to Pulaski County. And what’s even worse is that a few years down the road, when my payments go toward principal and not just interest, I will have less and less and then nothing to write off.

The people who think there are tax benefits every single year of a 30-year mortgage are wrong. They are not paying a full year’s worth of interest every year of that loan term, so they will only get the maximum benefit of owning a home for the first few years, then the benefits will slow to a trickle and then dry up entirely as there is no longer any interest to write off at all.  And guess what? Does property tax ever go away? Nope. Does routine maintenance? Nope. Are you guaranteed a raise every year to help offset these costs? Nope-just be grateful you have a job.

So where are my great tax benefits?  What am I really saving?  Why did everyone lie to me and tell me this was going to work out in my favor, when every time I turn around I just have to pay and pay and pay for the privilege of owning my home?  Am I just supposed to be okay with handing over my refund in entirety every year and then some, just so I can say I’m a homeowner? I’d rather be a renter, keeping that refund and building my savings or traveling to Europe or using that money to self-publish either of the two novels I have lying around. Anything would be better than handing it right back over.  He giveth and then he taketh away.

Susan Powter had it right all along...stop the insanity!

Susan Powter had it right all along...stop the insanity!

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People Who Annoy Me: Kristen Stewart March 3, 2009

Okay, I hadn’t intended to write another one of these so soon, but this girl is pushing all my buttons lately. Full disclosure: I have read all the Twilight books, and LOVE them. I’m not picking on the books at all, nor on the movie in general. Just on her.

Kristen Stewart's mantra

Kristen Stewart's mantra

The first offense? Her  acting in Twilight. This was a decent movie that exceeded my expectations thanks to R-Patz, the guy who played Jacob’s dad, and the gorgeous scenery. But Kristen Stewart made the rest of it a glassy-eyed pout-a-thon. Her coldness, her emptiness, her snub-nosed snobbery, her lack of enthusiasm for anything about this movie…the silver screen transmitted it all, in living color.

The other actors had to work twice as hard to regain my attention after every scene she ruined. I loved Charlie, Jacob, and Jacob’s dad. Once they calmed down with the white makeup on R-Patz, I fell for him, too.  I felt like this world and these characters were real to them, but I NEVER felt that way with her. The whole way through, she seemed dead and disconnected. The franchise would be better off without her.

I read about an interview she gave where she complained about the stupid questions her fans ask at publicity events (“What’s it like to kiss a vampire?”). She wondered why these fans don’t know the difference between reel life and real life.

Apparently, she’s too damn dumb to realize that some people have such vivid imaginations that things on a page can be just as real to them (or more real) than what they experience in real life.  Is she really so dense she can’t appreciate the childlike wonder of these fans? That it might be the first and last time a pre-teen girl thinks of love without disillusionment? That it’s a good thing kids are reading at all?

Is she really that thoughtless and callous? Is the world really all about her, and her need to be asked existential questions on each stop of the press tour?  Perhaps she could point out to us all where it states in the actor’s job description that they shall only be asked “intelligent” questions. Perhaps someone should just bitch-slap her with a copy of Swann’s Way. I’d sure like to know if that’s what it would take to wipe that holier-than-thou smirk off her face.

Kristen Stewart's approved interview material

Kristen Stewart's approved interview material

Now, let’s talk about her father’s quote explaining her refusal to appear at the Oscars. To paraphrase, he replied: She’d do it for a movie that’s good, not just one that makes money. Well, if money means so little to her, I’m sure she’d gladly do New Moon for half the cash, right? And boy, if all successful movies are critical failures that suck ass, she must hate Kate Winslet for lowering herself to do Titanic. And she must really loathe Heath Ledger for giving his all to a Batman movie. God, how humiliating to win an Oscar for a comic book movie! A comic book movie! That’s only one step above a vampire movie, for Pete’s sake.

I have no sympathy for this bitch. The more she whines, the more she reveals herself as (a) stupid, (b) naïve, and (c) downright unprepared for her own damn job. She must have read the Twilight script before signing on. Why does she appear so mystified and disappointed that it’s a cheesy vampire movie? Did she not read the book? Or even the book jacket? Did she not realize that a low-budget vampire movie was probably not going to be of the same caliber as Doubt or Milk?

Of course, if she had half a brain, she might have chosen to scope out the Twilight universe before signing on. If she had, she might have seen how large a following the series has, how seriously people take it, and at that point, could have backed off if rabid fan adoration and/or hatred really wasn’t her cup of tea.  But she didn’t. She took the job and the money, and she is responsible for everything that goes along with it.

Oh, she whines, but someone should have told me how lame and stupid it is to be famous for a movie that blows! Bitch works in HOLLYWOOD, where LOTS OF PEOPLE are famous for being in movies they think blow. Open your eyes, you stupid parcel. Observe the shit that happens in front of you everyday. It’s life. Get over it.  Even Michelangelo and Leonardo took painting commissions to make money. It’s all part of being an artist, sweet cheeks. Don’t complain about the test because you were too lazy or stupid to do your homework.

She also seems mystified by the requirements of being in a hit movie: press, publicity, late show appearances. She mentioned that she has no great stories to tell on Letterman, and doesn’t know how to respond with witty banter. Hmm…just a thought…MAKE SHIT UP. ACT. IT’S WHAT YOU SUPPOSEDLY GET PAID TO DO. PRETEND THAT YOU GIVE A CRAP ABOUT A MOVIE THAT’S MADE YOU UNDESERVEDLY FAMOUS. Or DON’T DO LETTERMAN if you can’t do it without being a TOTAL DOUCHE BAG. She acts like she’s never seen another actor on Letterman shilling for a movie because it was a part of the job.  It’s like she believed they really did just drop by to chat because they have so much cool shit to say.

As for the horrible slave labor she’s being forced to endure as she slogs through press junkets, all I can say is BOO FUCKING HOO. Oh, you were in a hit movie, and people are so excited about it they want to share it with you. Oh, doesn’t that just suck.  Oh, isn’t it terrible that you’re young and rich and traveling the world on someone else’s dime, and don’t have a job that requires you to be chained to a desk for eight freakin’ hours!  Cry me a river, bitch.  Cry me a river.

 

People Who Annoy Me: Gwyneth Paltrow

Gwyneth Paltrow. Damn it, I’m already annoyed and all I did was type her name.

One time, a friend and I were playing Taboo and her name was the phrase we had to get each other to say. We didn’t even need the list of words we couldn’t say. My friend said, “We hate her,” and I snapped back, “Gwyneth Paltrow.” Talk about the easiest Taboo point ever.

Oscar? Uh-uh. Chris? Pshaw. I'm blond, bitches.

It took me a really long time to figure out why I don’t like her, but I think I finally got it: she has no balls. Think of an actress with balls (Tilda Swinton, Cate Blanchett, Kate Winslet, Frances McDormand, etc.). These are great actresses who aren’t afraid to make us wince, to make themselves into ugly people on camera-they go places most of us can’t fathom, and they do it without hesitation. Now compare them to Gwyneth Paltrow.  What does Gwyneth do to make you think? When has she gotten down and dirty and really laid herself bare? She hasn’t, and she won’t. I don’t believe she can.

GP is the dilettante who gets mistaken for the PhD.  Let’s examine her acting chops, starting with her so-called Oscar winning role in Shakespeare in Love. Okay, so she put on a fake moustache, swooned a bit, and sighed romantically in a ridiculous British accent with vowels as loose as Karl Lagerfeld’s old pants (and there are people who agree with me). Big whoop. Any high school Heidi playing Viola could do what she did in that movie.

Iron Man? Please. She was stiffer than a Brit’s upper lip during WWII, and as frigid as a cryogenically preserved Simon Powell. No spark, no life, dead-eyed all the way through. This woman has no idea how to have fun on camera, to be less than serious. Compare her with Anne Hathaway in Get Smart or Kate Winslet in Titanic or Charlize Theron in Hancock. Real actresses in action-oriented movies who do more than furrow a brow or blink stupidly at the camera. Yes, Gwyneth, it can be done.

Additional entries in the GP catalog of failure: Possession, Plath, The Royal Tenenbaums, Great Expectations, View from the Top, Emma, Sliding Doors. Box office winners all.

I honestly think GP is pathologically incapable of playing a woman who is fearless, invulnerable, hated, or unshakable. She doesn’t know what these things are. Instead, she has to constantly beg the audience for affirmation. She has to be the pretty one, the adorably confused one, the tragic one, the woman who needs to be sheltered, loved, protected, coddled, cosseted, etc. Could you imagine her playing Charlize Theron’s character in Monster? Or Hilary Swank’s in Boys Don’t Cry? Or Jennifer Jason Leigh’s in Rush? She couldn’t do it. She wouldn’t know how.

There is no fire in this woman. She has no real passion, and so she can’t act the part of any woman who does. Instead, she simpers, whines, or pouts because that’s what she knows. Love me! Look at me! Adore me! Admire me! Validate me! Respect me! My question to her would be: why?

She talks a lot about being devastated by losing her father. Okay, that’s valid. It sucks. No one wants to lose a parent. But guess what? Millions upon millions of people do it every day. And get over it. And stop obsessing. They grieve, and love, and move on. They don’t yap about it for 10 years, because you know what? People with real lives have to go on living them. There are problems more pressing than what to wear to a premiere.

SPEAKING OF WHICH, what’s up with those hoo-ha baring outfits she showed up in this past summer? COVER THAT SHIT UP.  I just want to shake her and say, “You’re old, but you have decent legs. I get it. But can you please make your desperate need for media coverage a little less obvious? A soft-rock husband and millions in the bank just don’t satisfy you? My corneas are STILL recovering from that Stella McCartney black doily dress thing…anyone who told you it looked good lied like a rug, and shame on you for not knowing it.  I mean, really, honey…did you look in the mirror at all that night?  Did you think we all really just needed to see your underwear? You have kids. There’s such a thing as the Internet. Think this shit out a little better.”

SPEAKING OF WHICH, what’s up with her website? It’s called GOOP, which coincidentally rhymes with POOP. This piece of shit advises me to “nourish the inner aspect.” Aspect of what? This isn’t even a complete thought. I hope she’s not homeschooling her kids, because they’re going to grow up saying things like, “Rehabilitate the within.”

What in holy hell qualifies her to give anyone advice on cooking, shopping, or life in general? Anyone with houses, cars, nannies, trust funds, and an upper east side pedigree really shouldn’t pretend she’s anything like me. I’d really love to share an amazing paella recipe I discovered while backpacking with Mario Batali in Catalonia, too, but you know…I sort of have to work for a living, and I sort of have a mortgage to pay, and it would really just be a whole lot more helpful if someone told me how to get dog drool stains out of satin.

A lot of people have come down hard on her for the sheer ridiculousness of this website. She snapped back by saying that anyone who criticizes her website just “doesn’t get it” and if “they got it,” they wouldn’t criticize it. Does that also apply to Sky Captain and the World of Tomorrow, GP? If she were a teacher, is this what she’d say to her students?  “You just don’t get it….if you got it, you’d be a better student.” If people aren’t getting the point, perhaps it’s because (a) there isn’t one, or (b) she’s a nutjob who can’t communicate usefully.  My guess? (c) all of the above.