Earned Income Credit

Ok, Andy asked the question and I can't help but to respond. Especially if it is a matter of taxes or financial planning.
The Earned Income Credit (EIC) has been a part of the tax code as long as I have been preparing taxes - about ten years. Most of you have never heard of it because you earn over the income limit to qualify.
Think of a bell curve. If you earn very little you don't get any EIC. If you earn too much you don't get it either. In the middle you could get about $4,000 even if you don't owe any taxes. This is a refundable credit which means you get it even if you don't have any withholding or don't owe any tax. You just have to have earned income. It's like a hand out. No, it is a hand out. A non-refundable credit can only be taken against taxes owed.
You may be asking why Congress enacted the EIC. Why did the senators and representatives that YOU elected want to give some of the taxes you pay to low income people? Well, it was seen as an incentive for people to go to work. No earned income, no EIC. Then, I suppose, once they started to earn more and become mainstream workers the EIC is reduced. Can it be abused? Sure, just like any other tax regulation that has its primary purpose to effect social behavior.
Let's suppose I have a client who is a single mother with two children. She receives Social Security survivor benefits for herself and her two children because her husband had passed away. She has the ability to work but she chooses not to. I advised her that if she went to work and only earned about $14,000 that she would get another subsidy from the government in the form of $4,000 of EIC. Suppose she does that. Then she moves in with boyfriend who earns $40,000. My single mother client can still get the $4,000 EIC because it doesn't matter who in the household earns lots more money. Then my client tells me that she and boyfriend are planning to get married. Uh oh! With a combined income of $54,000 they would not qualify for the EIC. Zaap goes the $4,000 just by saying "I do." I advise my client not to get married.
Why would I give my client such advice? You would probably think that it would go against my political philosophy. Well, I have to act in the best interests of my client. That comes first in my professional life.
Suppose a single mom with two kids living with boyfriend doesn't have the ability to work. Well, she gets advice to come up with a bogus home business. It just so happens that she comes to me for the tax return and whatta you know, she has earned $14,000 from her home business. Strangely enough she doesn't have any expenses for this business. I emplore her to come up with some expenses to reduce the income to pay less tax. She keeps insisting that she has no expenses. She knows the rules of the game. She qualifies for the $4,000 EIC. This is a big red flag for us tax preparers. Most of the time people cheat by claiming less income than they earn or more expenses than they incurred. But, claiming income you didn't earn to qualify for the EIC is also tax fraud. What do I do? First you should know that low income people are not my target market. It is too much work for too little pay. H&R Blank can do a fine job for these people. I will politely tell her that I can't help her and direct her to the closest H&R Block office.

The Duck Won

Thanks to all of those who called or wrote to their Congressperson, the illegal alien amnesty bill died in the Senate last week. This bill was wrong from the start and it was mostly predicted that it would fail. Nevertheless, the conservative talk radio circuit was credited with a large influence in getting this wrong-headed legislation squashed. By the way, there is no real liberal talk radio circuit. Why? Because nobody listens to that garbage. It's all about making money folks. If it don't sell it ain't gonna be offered.

It is understandable why the liberals want amnesty for illegals. They see large cadres of future voters. But, it boggles my mind when some conservatives including the sitting President are in favor of this amnesty. I understand that they want cheap labor for their business owner constituency. But, are they really thinking ahead to all those future liberal voters?

The answer to illegal immigration is simple. First, enforce the 1986 law by fining and jailing employers who hire illegals. And, don't tell me that employers can't determine who is illegal. All they have to do is sign up with the Social Security Administration and then go online to verify the last name of employees against SSN's. This enforcement will cause hundreds of thousands of illegals to self-deport. Once the word gets back to the homeland the flood of new illegals will dry up. Next, carry out the law passed last October and build the double fence from California into Texas. Lastly, amend the constitute to stop the automatic citizenship for anchor babies dropped into this country by illegals.

One more thing. I have heard several liberals say that the illegals pay taxes. This is simply not true. Firstly, a lot of illegals work in the underground market, get paid in cash and never have taxes withheld. Then most of those that have either stolen a Social Security Number from a dead person or obtained a TIN and have taxes withheld are getting the withholding refunded and if their income is between $10,000 and $19,000 and they have two children, they get a $4,000 Earned Income Credit from the Federal coffers. So, not only are these individuals not paying taxes, they get a check for $4,000 from the taxes that you pay.

My last question. When are you going to get angry enough about all this to vote these liberals out of office?

El Mirage Dry lake Bed

My friend Ray invited me to join him and his son at El Mirage dry lake bed and OHV area. This is in the high desert north and east of Los Angeles. The elevation is about 4,000 feet but it is the desert so the daytime temperatures were about 95. Saturday evening was cool for excellent sleeping in Ray's motor home. I did a few excursions on one of Ray's dirt bikes. Also in the group was Greg Smith and Ray Reibling from NDT Systems where I worked back in the early 90's. I helped get my friend Ray (Bowman) a job there. So, Greg and I did an excursion on a couple of ATVs. No pics of the ATVs but we did some steep hill climbing that was lots of fun. Click on pictures to enlarge.

Dry lake in background

It looks Like A Duck And We Ain't Gonna Take It Anymore

Today the US Senate put forth a bill of amnesty for all the illegal aliens in this country. The proponents of this bill claim that it is not amnesty because it provides that illegal aliens must earn their citizenship.

Statistics show that the majority of illegal aliens in this county are from south of the boarder. Statistics also show that these individuals have a very low incidence of applying for citizenship when they can compared to aliens from other countries. Why is this? The answer is obvious. They are not interested in becoming citizens. They want jobs so they can send money home to their family. (Money flowing from the US to Mexico from immigrants is the second largest source of funds for Mexico after oil sales.) They want a better life. They want free education for their anchor babies. They want free health care. They don’t want citizenship because they don’t need it to get all those other benefits. There is also a large portion of these people that want to retake the land that the US took from Mexico three hundred years ago. Why would they want to become citizens of the US when they believe that the land will be a part of Mexico again some day.

So, what does this bill do to foster amnesty. Upon this bill becoming law every illegal alien who came to the US before January 1, 2007 could immediately apply for work authorization with no cost or questions asked. In the single stroke of a pen all twenty million illegal aliens in this county no longer have any fear of being deported. They become legal aliens. There is no requirement in the bill for any of them to apply for citizenship – they don’t have to earn anything. They don’t have to return home and then come back again. They don’t have to pay the $5,000. They are suddenly all legal.

This will do exactly what the 1986 amnesty bill did – draw another estimated one hundred million illegal aliens across our boarders. Who will pay the entitlement costs for these new illegal immigrants and the twenty million already here? The middle class, that is who.

US Senator Jim DeMint:
"But the little we do know about the bill is troubling. According to reports, the bill contains a new 'Z Visa' that allows those who entered our country illegally to stay here permanently without ever returning home. This rewards people who broke the law with permanent legal status, and puts them ahead of millions of law-abiding immigrants waiting to come to America. I don't care how you try to spin it, this is amnesty."

You must contact your representative in Congress and tell them you are not being fooled by this sham bill. Turn off the TV and do your civic duty to save this country. http://www.visi.com/juan/congress/

Three Generations on The Queen Mary

My father John S. Rumbold (center, taking a shot) aft port side October 14-19, 1936 somewhere on the Atlantic Ocean on a westbound voyage.

Me (John G. Rumbold) November 1993 Long Beach, CA when my mom and I did a tour. Notice that stairs have been installed for the tours now that classes are no longer separated.

John A. (Andy) Rumbold & Dorinda Rumbold May 2007 Long Beach, CA.

Walk on the Lake

Andy and Dorinda are visitng for a week. They arrived Saturday afternoon. Saturday evening we went to seethe moview "Breach" at the Starplex where the tickets are $1.50. Today we went to the 11:00 AM service at Chrystal Cathedral (www.crystalcathedral.org) where Dr. Robert Schuller and his sone Pastor Robert Schuller officiated. Then we went for a walk up to and around North Lake in the Woodbridge Village area of Irvine.

Click to enlarge.

Dining Set

I got this dining set today after spending a few weeks searching on Craigslist and the local furniture stores. This was a floor model on sale. And, just in time too. Andy and Dorinda are arriving on Saturday and they are probably expecting to have an occasional meal. I had sold the dining set I bought in 1989 when I moved last year. It was a brass base with glass top. The brass on the chairs had turned black which one might have thought was the style rather than the age. So, it would have been time for a new set anyway - after 17 years. This is Prairie View dark oak. You can Google that and see some of the other pieces. This is 42" x 60" and the top pulls apart to reveal a flip up leaf that extends it to 78".

Click to enlarge. BTW - this is a stock photo, not my dining room.

Spring Time in California

Yes, even out here where it never snows we get spring flowers. This is the walk up to my front door. Lots of color to brighten the day. Click on image to enlarge.

Easter - OK, a little late

I went to Crystal Cathedral for the evening Easter service. This picture from my cell phone is not too good but it shows that the entire stage was filled with flowers. Even the cross was covered with flowers.

Auction March 30

NOTE: THIS ITEM IS UP FOR SALE ON SATURDAY, MARCH 31
The Duke and Dutchess of Leeds are going on the auction block March 30 at Eldred's in Dennis, MA. Check out the link: http://www.eldreds.com/sales/detail.php?itemID=104602

I think it will be simultaneous on live Ebay but the estaimated value is very low so perhaps not worth watching.

Very sad to think of the many years these two looked over us in the music room.
Also see the tall case clock for the June auction at Eldred's
http://www.eldreds.com/sales/detail.php?itemID=105846

Pictures have Arrived

The 436 slides from Elmcroft that we had digitized have arrived. We probably threw away more than that of slides that we could not identify or slides from various trips to Europe that mom took. I will try to post some on Snapfish. At some point I will catalog them all so that future generations will know what each one is.

Isn't Andy cute? ................Those were the days - snow at Elmcroft

Office Guest Chairs

These are better overall views of the office to give you all an idea as to why I cannot put the desk in the middle of the room. Besides, all the wires hanging under the front edge would look aweful. I have a surge strip under there, a few of those power modules and lots of bundled wires. So, I got two guest chairs tonight just in time for my first two clients on Saturday. I had seen these at Office Depot a week ago and they told me they were $25 each. I shopped a bit and went back last weekend only to be told that they were now $54 each. Tonight I drove all over the place looking for something - even Ikea - and couldn't find anything decent for less than $80. So, I went back to Office Depot annd asked the price again. The lady told me $54 again and then she said that two weeks ago they were on sale fo $16.99 each. I offered her the $16.99 and after checking with the manager I got them for that price. Yes, yes, I know. Now I have enough money left over to buy a new task chair for myself. Ok, one thing at a time.

Home Office at 50% +

The Rumbold Financial & Tax Advisory home office is well on its way to completion. All the computer gear is now connected, functional, and neatly tucked in around the edges. The cable modem, wireless router, external backup hard drive, printer server and the two printers are all located in the wall unit to the right. The computer, scanner and new flat monitor are on the desk. I avoided having to have a new cable outlet put in the wall behind the wall unit by running the cable from the opposite wall under the edge of the carpet. Next I need to tackle the bookshelf and get all the files organized. Then hang my diplomas and a few pictures.

SETTLED!

The two little fern plants that Andy and Dorinda gave me up on Cape Cod are now settled in their new home in the greenhouse window of the kitchen. They made it across country on the floor of the passenger seat although I had to bring them in at night to keep them from freezing. Imagine, I took the southern route across country to avoid winter weather and I ran into winter weather.

The moving van arrived Saturday morning and so far I have set up sleeping, bathing and eating facilities. I also got a washer and dryer so I can do laundry. Next is getting my office set up so I can start meeting clients. My three piece black wall unit doesn't fit so I will have to take it apart and use two of the pieces separate. But before that I have to get my internet service set up.

ARRIVED!

I arrived in California at 4 PM PST today. Most of the entire trip was in cold rain. When I left Andy & Dorinda's on Monday it was raining all through PA but overcast and mostly dry down through the backbone of Virginia and into North Carrolina. The trip from North Carolina to Houston on Tuesday took about 14.5 hours and was mostly rain, heavy at times. When I left Houston on Thursday it was raining. The freezing rain was in the north of Houston. When I got to San Antonio there was ice covering the trees and big icicles hanging from the the street signs. There was a lot of ice piled on the sides of the freeway. When I left Las Cruces, New Mexico at 5 AM on Friday it was raining and 34 degrees over the Continental Divide. It rained heavy all the way through Phoenix and across the California border. When I got to Orange County this afternoon, it was sunny and 70 degrees. I'm a little dazed right now. My furniture arrives tomorrow morning.

Many thanks to Andy & Dorinda for the room on Sunday night. Sorry for the short visit. The visit with mom's friend from Sumatra on Monday evening was very rewarding. Part of the letting go process. Also, many thanks to Melissa and Rob for the room on Tuesday and Wednesday night and for the wonderful tour of NASA. A new chapter now begins and I place my trust in God for what the future brings.

Mission Control Center Houston

Melissa and Rob took Jonathan and I on a private tour of the NASA Houston space center. We toured the simulators for the Shuttle and International Space Station (ISS). Then we were allowed into the Mission Control Center (MCC) for the ISS. We also toured the mockup training building for the space shuttle and ISS. Click on pictures to enlarge.

ISS MCC ....................................Sitting at the ADCO console
ADCO = Attitude Determination & Control Officer (One of Melissa's roles)


Shuttle MCC ............................. Old Apollo MCC


Shuttle mockup ....................... Robot arm mockup trainer


Payload bay mockup

Grace Goodell

Grace Goodell is a friend of mom's from the days in Sumatra in the 1930's and Malaya in 1947. Grace and her husband Val came to Boenot, Sumatra in 1935. My mom and dad had been there since 1933. Grace, Vall and their three children had a harrowing escape from Sumatra in 1942 as the Japanese were occupying the island. They managed to get a boat around the cape of South America and about a day out from New Orleans their ship evaded a German torpedo. Grace is 98 years old, still drives and is very lively. We had dinner together in her retirement community in Hendersonville, NC. Then we went back to her apartment and I showed her the DVD movies from Sumatra. She identified the man at the beginning ad Bill Giddings. We also looked at the picture album of Sumatgra photos. We both had a wonderful time and parting was a sweet sorrow.

California Bound

After a very tumultuous year, I have decided to return to California and pick up where I left off. I have secured a part-time consulting assignment with my previous employer - Cemtek Environmental and I hope to secure other consulting assignments with business owners that I know in the area. These assignments are and will be in line with my personal financial planning career ambitions. I will also be greaing up my tax practice by springboarding off the 25 clients I currently have in California. I have a home in Irvine under contract. It is a small home with a den that I will use as an office for my tax practice until I get it going in a few years and can afford a real office. Strangely enough, the home is in the Woodbridge area of Irvine.





I will be driving across country, leaving on the 15th and stopping at the Greens for a day or two.

New Year's at Elmcroft

George and Barbara spent New Year with me at Elmcroft. On New Years Eve Bruce and Mary came over for dinner. Dick Strong and Maryanne stopped by for a brief visit. During the evening we watched Laurel and Hardy in March of the Wooden Soldiers on DVD. We also watched the home movies that I had converted to DVD. We were surprised to find two clips of movies from Sumatra in the early 1930's. There are scenes from Lake Toba, Berstagi, and the plantation in Kisaren. Quite a treasure. I will have additional copies made to distribute. The remainder of the clips are family vacations to Maine, Cape Cod, Coumbia Lake in Connecticut, and many clips from Elmcroft. Many of them are in very poor condition from water damage.

On New Years Day George, Barbara and I viewed all of the 35mm slides and sorted about 400 as keepers. Once I catalog them, they will be sent out for scanning so they can be shared with the family. Karen, Doug, Rachel. Emely and Jacob came over for lunch and the kids tore up the house - something my mom loved. I guess this will be the very last gathering. A sad ending and new beginnings.

Check out listing

Check out the Elmcroft listing on Realtor.com. There are two listings, one for the house and one for the coach house. Yes, I know there are mistakes and I am working on getting them corrected so don't post a comment about them.
http://www.realtor.com/Prop/1073193771
http://www.realtor.com/Prop/1073193772