Tracking your tax return, tax refund and amended return

Its the tax season, and we all know the drill – buy a software, get a professional to do it for you, or just fill the forms directly. Either way we are all filing our tax returns now.

But what happens after we drop the envelope at the post office? How to track it? Well, apparently there are ways.

First – dropping at the post office: we don’t really have to do that. Whether you’re using a software to prepare taxes on your own, or hire a professional to that – chances are that you can file electronically. I.e.: the data will flow over the Internet (securely, of course) directly to the IRS. You’ll receive a notification that your return had been delivered to the IRS within minutes or hours, and that would be your proof of timely filing.

If you do send paper return via mail, make sure you send it via certified mail. That is the only way to ensure that the postal receipt you get will be treated as a valid proof of timely filing. You would also be able to track the package and know when it was delivered to the IRS.

But once it has been delivered, whether electronically or physically, what can you do to track your tax return?

Well – there are two ways:

1. Call the IRS and ask. You’ll be waiting for a while until a representative answers, and then you’ll have to actually talk to the IRS.

2. Get the very same information over the Internet.

Its easy, really, and the IRS added a new option to also track your amended return now.

In order to track a return with a payment you don’t really need to do much, just watch your bank account, and you’ll see the check cashed/withdrawal initiated. But if you want to track your refund – you should start here: The IRS Where’s My Refund page. For returns filed electronically you can start checking there as soon as 24 hours after filing, but for returns filed via mail on paper – it may take up to  a month until they appear in the system. No need to call anyone, the representative over the phone will see exactly the same information.

The amended returns are always filed on paper, and will not show at the “Where’s My Refund” page. Instead, for amended returns, go to this new page: The IRS Where’s My Amended Return page. Remember that it might take up to 3 months for the amended return to show up there.

When on the site, make sure you’re on the right site. Check through your browser that the site is secured and it is indeed “IRS.GOV” and not anything else. Most browsers will show on the address bar a notice about it.

Similar on-line sites exist for the States as well. For example, here in California you can track your refunds through this CA FTB web page: Check your California Refund Status. Check your own State’s taxing authority web site for details for your location.

Enjoy the tax season!

Your Little Advisor.

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A little on Bitcoin

There’s a lot of fuss going on around about “the next best thing” on the Internet – the Bitcoins. I decided to compile some of my thoughts and impressions on this thing, and explain why I think it is a giant scam.

First – what it is: bitcoin is a software that is designed to produce certain amount of digitally signed chunks of digital data, called “bitcoins”. The software is designed to be decentralized (similarly to BitTorrent network, hence the name), and the digital signature is supposed to ensure that every chunk of data is unique and authentic. The software creates these chunks through a process called “mining” when several distributed (or one powerful) computers recalculate the digital signature hashes. The created signed batches are given as “rewards” for the hashing efforts.

The proponents of the bitcoin software call it a currency, claim that it is safer than the government backed currency, and that it is “real”, vs the “paper” regular currency.

I will show now why it is not true, and why it is in fact a scam (basically – its a Ponzi scheme).

1. Safe. How safe is it? The accounts are anonymous, the money doesn’t exist in reality, and the digital wallet will only work if you’re connected to the network. Once your computer is stolen or the password is compromised – there’s no real way to recover, and the police won’t help you much because no real thing was stolen. Here’s an example just from today – $12000 worth of bitcoins stolen. What can you do if it happens to you? Nothing. Safe? Think again.

2. Reliable. It is only reliable if people think its reliable. That’s exactly why its a scam. While the “paper” money is backed by your government (and say whatever you want – its the government you elected, so if you trust them to govern you should trust their money, or vote them out), the bitcoins are backed by nothing. Today someone wants them, tomorrow – the trend is over and you’re stuck with bits on your computer that worth nothing. No-one to hold accountable, no-one to outvote, no-one to complain to. Reliable? Think again.

3. “Real” money. Is it real? It comes out of thin air. There’s no underlying value. Paper money has underlying national economy, precious metals have the underlying intrinsic value and have demand in industry that means they will always have some value. Bonds, stocks – have certain guaranties and assets to back them up. You can evaluate these assets and decide what’s the risk you’re taking. You can try to assess the future growth of the national economy and decide whether to invest in its money. But what is the underlying value of the bitcoins? NOTHING. So how is it real? Think again.

4. Ponzi scheme characteristics. The bitcoins are created by a certain algorithm, and it provides a limited supply. More than half of that supply had already been created and allocated between the early investors. Some paid real money into it, some just “created” the coins out of the thin air. The earlier they started the more coins they have. Compare it to gold: people have been mining gold for thousands of years, and there’s still plenty left to mine. Bitcoins have been around for only several years, and more than half have already been allocated to very few. The more people join in – the more profits these early starters have. So they have an inherent interest to get you all suckers into this scheme. But what do you get out of that? People who claim that bitcoins are the real money and the paper is worthless – want you to pay the same old paper US dollars for their bitcoins. Now think – why would they want these unreliable worthless pieces of paper and give up their own “real” currency to you? That’s the whole point of Ponzi schemes. Once the suckers stop coming it collapses.

So what do you do with this? Whatever you want. But consider this: the bitcoins are currently used mostly to break laws. That’s the barter of choice for drug dealers, money launderers, tax evasion and cross-border smuggling. They need you to pour in your “paper” money so they could cash-out of their bitcoins. Do you really want to support these people? Think again.

Bottom line – don’t just believe everything you hear, think for yourself and evaluate for yourself.

Your Little Advisor

Posted in Banking, News and Politics, Online Shopping, Reviews, Taxes - General | Tagged , , , , | 3 Comments

What’s the best way to insure your phone?

You buy a new phone, its all shiny and expensive, and you’re worried about it being damaged or lost. We’ve all been there. The question is: what insurance is the best to deal with it.

My answer is: self-insure. Yes, that’s right, the risk is not worth the premium you’d be paying.

Consider the costs (AT&T as an example, but its not significantly different with other providers):

You pay $6.99 per month -  that’s about $84/year.

Add to that $200 deductible (for the more trendy devices such as an iPhone, see the list here).

So you’ll pay for the replacement phone ~$280, while you got the new one (assuming you signed up for a 2-year contract) for about $200. Less, in many cases. Usually, the replacement phone you get will not be a new one, but refurbished, and a year after the model was introduced its already an “old” model selling for free or low price (with a new contract). Breaking a contract on AT&T costs $200 after 12 months of service (less after longer periods).

So in case of a disaster – you just get a new phone for $50 with a new contract (which will get you the same or newer model, and probably new and not refurbished). Even when adding to that the $200 early termination fee for the old contract, after 12 months you end up with a cheaper replacement without the insurance than with it.

So unless you lose/break your phone more than once a year – the math speaks for itself: the insurance is not worth it.

Hope it helps,

Your Little Adviser.

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Consumer Financial Protection Bureau is looking for feedback from students

If you’re a student then the newly created consumer watchdog CFPB is looking for your feedback.

CFPB is a newly created Federal agency charged with protecting the rights of the American consumers. They’re starting looking into various marketing practices of financial and banking products to students. Specifically, they’re interested in information about marketing of bank products, credit and debit cards, loans etc – to students.

If you’re a student and want to provide feedback to the agency – you can do so via email as published by the CFPB on their official website here.

Your feedback is greatly appreciated as it will help the consumer protection agency in ensuring that the US students are not being subjected to abusive marketing and lending practices and ensure that your rights are protected. You have until March 18th to do so.

Thank you,

Your Little Advisor

(no affiliation with CFPB or any other government agency whatsoever)

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Investing in ETFs? This is for you.

Charles Schwab started offering a new trading platform for ETFs, called “OneSource”. This platform allows free trading on a subset of all the ETFs available, meaning you save the buy and sell commissions.

If you’re a small investor, adding monthly small amounts to your savings, you probably know that the trade prices of $7-$15 can eat 1-2% of your yearly profits just like that, even more if you’re investing less than several hundreds of dollars at a time. This is a huge (relatively) price to pay, and if it is such for you – look at Schwab’s “OneSource”. It offers more than 100 different ETFs free of trading commissions, and you only pay the regular ETF expense ratio (which you pay anyways).

You can read more details here.

However, there’s a caveat. You will not find the more prominent ETFs in the list. Funds like SPY (SPDR S&P 500 Trust), QQQ (Pwershares QQQ Trust – Powershares NASDAQ Composite Index Tracking Fund), ONEQ (Fidelity Nasdaq Composite Index Tracking Fund), and many others.

You can find alternative ETFs for the same segments, but here’s the thing: they’re small. Small means less shares, less trades – less liquidity. While Mutual Funds will allow you redeeming your investment without a buying counter-party, for ETFs you need someone to buy the shares from you. If the ETF is small and there are not much trades on it, it may be hard to redeem your investment and get the best price.

You can read more of the criticism in this article.

So, as with any other thing, free comes at a cost. You need to compare the funds available and assess their suitability to your needs. The fact that you don’t pay trade fees may not save you much if you have to sell at a discount later. But then again, including these funds in this platform might help them grow significantly and in fact build them as a competition to the established large funds I mentioned before. That might even be the reason for this particular funds’ selection, if you ask me.

So invest wisely, but do consider every aspect. By the way, Schwab is not the only broker having no-fees ETFs list. You can look at Fidelity, TD Ameritrade, Vanguard, Scottrate, and others. The ETFs in their list may vary, and if you don’t find the ETF you want in one firm – check the others before compromising on an alternative.

Keep in mind that this article is not an investment advice and you should do your own research about your investment decisions. All the names mentioned were just the famous names that came to my mind, and I have no affiliation with any of them.

Your Little Advisor.

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Conclusions from the Best Buy $50 Coupon Fiasco

In case you missed it, Best Buy came out with a $50 discount coupon on $100+ purchase made with Mastercard this week. The terms of the coupon weren’t very restrictive, as one would expect, and they didn’t even exclude gift cards. The coupon was released by email, wasn’t personal, and wasn’t limited to any specific person or group of people. Anyone could use it provided they paid with Mastercard. And many did. People printed tons of copies of the coupon, and bought gift cards in thousands of dollars at 50% discount (you get $50 of a $100 purchase, so what do you do? Buy a $100 gift card for $50 many many times). Apparently even the Mastercard requirement wasn’t enforced everywhere and some people reported being able to use the coupon while paying cash.

Best Buy understood how deep the hole they dig to themselves was pretty quickly, and changed the terms of the coupon the same day it came out (limiting its validity to only that day, excluding gift cards, etc). But the damage has been done already. Some people got the original coupon and wanted to use it the next day, others were arguing at the cashiers‘, etc etc. The public opinion of Best Buy couldn’t be worse. Of course, I’m pretty sure there’s going to be a lawsuit as well.

But what have we learned?

1. Big business can screw up. And often do, and this is just the latest example.

2. When business do screw up, they correct themselves quickly.

3. If you can use the screw up – use it fast. Don’t wait for the next day as they close the loophole by then.

4. Don’t be greedy. Those who stacked on tens and hundreds of giftcards cause the businesses not to come out with good deals – businesses know the deals will be abused. Everything is good in moderation.

5. If you see a deal that’s too good to be true – it probably is. If it is still true – go and get it while its available.

Happy shopping,

Your Little Adviser.


Posted in Coupons, Smart Shopping | Tagged | Leave a comment

Promotions on Tax Preparation Software are ON!

The major tax preparation software manufacturers (Intuit and H&R Block) have started their promotions already. Usually, they only start the promotions towards the end of the tax season, after all the early submitters have paid the full price already. But this year, probably because of the fiscal cliff public debate, the promotions started early January.

You can find all the various versions of TurboTax and H&R Block at Home discounted in many places. Both H&R Block and TurboTax have on-line only options on their home sites.

Here are the current prices: Continue reading

Posted in Reviews, Taxes - General | Tagged , , | 4 Comments