Taxed by life's spills

To: Commissioner B. Gordon Hufshutz
Internal Revenue Service
Washington, D.C.

Dear Sir:

I write seeking an extension on the filing deadline on my family’s personal income taxes. I had every intention of getting our tax return done on time, but Life interfered, and I’m afraid meeting the deadline is now impossible.

I had the best of intentions. I set aside a day, well ahead of April 15, to do the IRS paperwork for my home-based business. I woke early that day, put on my workout togs and prepared to get pumped up for a day of tax preparation. I paused in the kitchen for coffee, and was stricken by a series of calamitous events that distracted me from my taxpayer duties and ruined my whole morning.

It went like this:

I filled my giant thermal cup with coffee, then lifted the sleek Art Deco sugar canister to bring it closer so I could dump in my usual embarrassing amount of sugar. Some idiot (me, I think, after my previous cup) had left the screw-on lid loose, and the glass canister slipped from my hand. I tried to catch it, but the lid had come off in my hand, so my hand was full. Instead of catching the sugar canister, I clubbed it through the air. A plume of sugar flew across the room before the clear canister hit the tile floor and shattered into an estimated 4,703 shards of sugar-frosted glass.

Meanwhile, my elbow was busy knocking over my giant thermal mug.

Coffee cascaded along the countertop and off into the floor, where it mingled with the spilled sugar and instantly formed a slick glaze studded with broken glass.

I am ashamed to say that I screamed curse words at this point in the sequence of events, but a man can only take so much.

My wife came to my rescue. We moved electrical appliances out of harm’s way and began to clean up the coffee and the sugar and the glass. It was a big job. Getting sugar-glaze wet simply spreads it around. The floor gets stickier and stickier, until it’s like flypaper. It took half a roll of paper towels, two sweepings, several swabbings, one domestic dispute and 14 moppings, but after a mere four hours, the extremely clean floor was no longer hazardous to bare feet. Also, you could walk across it without squeaking.

After such a harrowing event, there was no way I could concentrate on tax paperwork. I’d already lost half a workday, and I spent the other half on the sofa, recovering from the trauma with doses of chocolate and Sportscenter.

My work schedule never recovered, and I remain behind on my business and household paperwork to this day. A six-month extension should give me time to locate all my receipts and file my tax return, assuming there isn’t another major spill around here.

Coffee and sugar and broken glass, all at the same time. Surely, Mr. Commissioner, such a “perfect storm” of spillage qualifies as an Act of God and should excuse my family from the April 15 deadline for tax filing.

I blame the sugar canister, which was destroyed in the incident and thereby duly punished. But please do not penalize us.

Thank you for understanding.

Sincerely,
Steve

Another year, another beer

The start of a new year is the perfect time to organize your home office (or even your cubicle in a regular office).

It's time to discard old calendars, and replace them with shiny new ones filled with blank pages. Time to "strip" old files. Time to clean off your desk, down to the naked wood. Yes, it's truly a time of "out with the old and in with the nude."

Many workers let this opportunity slip by because they're too daunted by their messy offices to even attempt such a clean-up. These same people find themselves pawing through garbage bags in search of receipts on April 15.

How to tackle such a big job? It's a matter of sorting files and arranging folders and stacking up those unfinished projects you lost six months ago. Here's what you need to get started:

--Boxes. Use those left over from Christmas. They're probably in the garage.
--File folders. Get nice, new folders. They're cheap.
--Large envelopes. Ditto.
--Extra-large trash bags. Preferably clear ones. You may be hunting something in the bottom of one later.
--Stapler, paper clips, rubber bands, etc.
--Beer.

Assemble these items in your office, roll up your sleeves and get to work.

(If your office has a door that locks, you should lock yourself inside. This will prevent those inevitable interruptions and provide a barrier to distractions, such as the fridge and ESPN. Also, you don't want your family or co-workers to see you like this -- sweaty, frantic and confused.)

Label the boxes and envelopes in a way that makes sense to you. For example, you might have envelopes labeled "IRS" or "Receipts." You can label file folders by the names of your clients, or by date, or alphabetically. If you're in a home office, you might have extra folders labeled "Bills" or "Lost Stuff" or "Kids' Homework???"

Once you get everything labeled, you should brace yourself with several beers, because it's time to start sorting.

Begin with your desktop. Desks are junk magnets, and the top of your desk is buried in stuff you don't need. Yes, it is.

Go through these items and sort them into envelopes, boxes, trash bags, etc. A good rule of thumb: If you haven't referred to a piece of paper in six months, then it's time to throw it out.

If you don't recognize an item, then it's also a good candidate for the trash. It probably belongs to somebody else in your office/household, and tough luck to them.

As you put items away, the landfill level will lower and you'll unearth other items that you didn't even know were there, such as your phone. File these away, too. (Though you might want to keep the phone in plain sight.)

After you've cleaned off your desktop, pause to reconsider your sorting plan. Do you need other categories, such as "Overdue Work" or "Overdue Bills" or "Whoops!" or "Mystery Folders"? Create these new categories and make sure you have plenty of room in the existing envelopes/folders/boxes, because your desk drawers and file cabinets come next. Drink several more beers.

Go through each drawer, throwing out old papers and arranging ones you need to retain. Be merciless. Don't keep anything you don't absolutely need. Otherwise, you'll be looking at these same papers next year, and they'll make even less sense then.

Drink more beer.

By the time you're done, you should be drunk and sweaty and perhaps naked. But there's still one more job to do: Cart off the boxes and garbage bags. Put them in the garage or basement or other storage area.

Make sure it's someplace convenient because you'll be looking through them again. On April 15.

Got money?

Many of us who work at home find ourselves separated from the mainstream of the stumbling American economy.

While regular workers spend increasing amounts of time worrying about their money, we freelance types say in resentful, guttural tones: "What is this 'money' and how do we get some?"

But say you have some of this so-called "money." Do you know what to do with it? Are you saving for retirement? College? A rainy day?

Whether you work at home or in the usual slave labor, how you handle your money can determine whether you weather the current tidal wave of economic crises or become more welfare flotsam.

Money management is not for amateurs. Make a mistake, and you can regret it for a lifetime or beyond. Yet studies show that most Americans know more about football than they do about financial planning.

To see whether you're knowledgeable enough to handle your own finances, take the following quiz:

Question: To "invest" means to:

A. Plant your money in a place where it will grow.
B. Hide your money in the pocket of your vest.
C. Buy a new truck.
D. Wave bye-bye to your money.

Q. "Consumer debt" is:

A. Money you owe to MasterCard.
B. The fuel in the engine of the American economy.
C. Something we all have in common.
D. A lifelong pursuit.

Q: A "pension" is a:

A. Retirement fund.
B. Small hotel in France.
C. Pipe dream.
D. CEO's slush fund.

Q. The term "interest" means:

A. To hold one's attention.
B. Your share in a successful enterprise.
C. Money you earn on your savings.
D. Money you pay to a loan shark.

Q. "Mortgage interest" can be deducted from:

A. Your taxes.
B. Your landlord's taxes.
C. Your wallet.
D. The national debt.

Q. A 401(k) is a retirement fund that allows you to invest your pre-tax earnings now and collect the gains when you retire. What does the (k) stand for?

A. Karma.
B. Klutz.
C. Kick yourself.
D. Kill yourself.

Q. An "IRA" is:

A. A tax shelter.
B. A method of earning 2 percent interest on your retirement savings.
C. One of the Gershwin brothers.
D. The Irish Republican Army.

Q. The stock market is a way to:

A. Secure your future.
B. Diversify your portfolio.
C. Lose your assets.
D. Justify suicide.

Q. When considering a particular investment, you should:

A. Research it carefully.
B. Consult a professional.
C. Ask your Uncle Morty for a "hot tip."
D. Flip a coin.

Q. "Mutual fund" means:

A. A collection of investments managed by a professional.
B. A shared risk.
C. Read the fine print.
D. Community property.

Q. "Taxes" are:

A. Every American's responsibility.
B. To be avoided.
C. An albatross around the neck of the working man.
D. The largest state in the contiguous U.S.

Q. If you find ways to reduce your "tax burden," you could end up:

A. With more money to invest.
B. With more money to spend on a new truck.
C. In an IRS auditor's office.
D. In prison.

Q. "Wealth" is:

A. The measure of all your collected assets.
B. Relative.
C. Something your relatives have.
D. A pipe dream.

Q. The safest place to keep your money is in:

A. Mutual funds.
B. An interest-bearing savings account.
C. The stock market.
D. A cookie jar.

Q. To "diversify your portfolio" means:

A. To spread your money around among several different types of investments.
B. To carefully balance risk investments against "sure things."
C. To change the color of your briefcase.
D. To put your money in several different cookie jars.

Q. It's often said that "money can't buy happiness," but it can buy:

A. Financial security.
B. The illusion of happiness.
C. Politicians.
D. A new truck.

Incorporation station

Now that the annual Tax Scare season is here, perhaps it's time to take a hard look at the corporate identity of our home-based businesses.

How you classify your business makes a big difference when you file your returns with the Internal Revenue Service. For instance, if you write "freelance" anything on the "occupation" line, you can expect IRS auditors to read it as "Dedicated Hobbyist" and come hunting you. If you can identify yourself as "Petroleum Magnate," however, it's probably smooth-sailing at tax time.

Taxes are only one consideration. For financial and legal reasons too complicated to go into here, it may be to your advantage to have official business documents which classify your business as freelance, limited partnership, corporation, hopeless time sink, etc.

Setting up your business properly can affect your personal identity and improve your slacker behavior. If you start a corporation, you might work harder because you'll take it more seriously. Other people might take you seriously. Is it worth the time and expense to find out? What price self-esteem?

Let's look at these categories, and see which one best fits your personal perception of yourself and your business:

YOU MIGHT BE A FREELANCER IF:

--You, for financial and legal reasons too complicated to go into here, need to remain unfettered by official documentation and corporate flapdoodle. An example: If you frequently change your name to duck creditors, "freelance" probably describes you perfectly.

--You check your mailbox nine times a day, hoping for a paycheck.

--You check your e-mail twelve times a day, hoping for any inkling of good news.

--You're on a first-name basis with the clerks at Kinko's and the post office.

--Your net worth is so minuscule, it makes your accountant roll on the floor, snorting and giggling, until he gets uncontrollable hiccups.

YOU MIGHT NEED A LIMITED PARTNERSHIP IF:

--You, for financial and legal reasons too complicated to go into here, choose to team up with another anti-corporate soul to form a joint venture.

--You want to "limit' your involvement in the venture, such as providing encouraging words from the sidelines rather than sinking the whole nest egg into some harebrained scheme.

--You have a partner who has, ahem, limitations.

--You want to protect yourself and future generations from your partner.

--Your partner feels the same way about you.

YOU MIGHT NEED TO INCORPORATE IF:

--You, for financial and legal reasons too complicated to go into here, need to distance yourself from your business. Say you're facing lawsuits from creditors. If the business is a corporation, the creditors will sue the company and your personal obligation may be limited. In other words, you might get to keep the house.

--You want clients to believe you have actual employees.

--You're getting too big for your britches.

--You believe "Inc." on your business card will make people think you're taller.

--You "want a piece of that Enron action."

YOU MIGHT BE BANKRUPT IF:

--You, for financial and legal reasons too complicated to go into here, see that there's No Way Out.

--You've been entertaining fantasies about running away to Belize.

--You get more calls from telemarketers than from clients.

--You pick up any book and immediately turn to Chapter 11.

--You recognize that all your struggle to succeed has been a hopeless time sink, and you would've been better off working as a cubicle drone the whole time. At least you would've had benefits.

Bankruptcy isn't the end of the world, though it can be the end of your credit rating. And it can have a stifling effect on your ambitions.

What do you write in the "occupation" slot after it's all blown up in your face? We suggest "Dedicated Hobbyist."