Adventures in OMG are we going to have to pay huge amounts of taxes on our slightly under a year in paradise?

Back when we went to Paradise for my leave, we spent hours and hours researching the tax situation.  We read lots of stuff online.  We read articles published in tax journals available from the uni library.  We talked to friends and colleagues who had taken out-of-state leave recently, including one who had both gone to Paradise for leave and who had used a professional accountant.  We called up the tax board in Paradise and asked.

Everything was unanimous (well, except a couple of random internet Q/A things that didn’t really look legit)– if we lived there less than a year, kept our residence here, didn’t register to vote or get a driver’s license etc., then we would only have to pay taxes on income directly from places in Paradise.  We would be considered non-residents, and non-residents only have to pay taxes from Paradise-sources, not from, say, my University salary.

So, of course, the other day in the mail we got two scary tax documents from the Paradise tax board asking us for our 2015 Paradise state taxes.  Apparently the fact that we sent our federal taxes from a Paradise address meant that they expected us to file a return.

Which freaked us out, because our state taxes where we normally live are a pittance compared to state income taxes in Paradise.  We’re talking thousands of dollars if all of our income counted.

So we redid the internet searching and DH called the tax board in Paradise again.

Turns out we had a 1099 from an honorarium I got in Paradise, and although I normally don’t have to pay Paradise state-income taxes on honoraria from Paradise (which I tend to get once every few years), since I was living in Paradise at the time, I did need to pay state income taxes on that income.

So we just needed to file a non-resident tax form, which is a pain, but the only part we’re going to be taxed on is the honorarium plus a small penalty.

We’re talking maximum $100, not the thousands we’d been envisioning.

Whew.

That was a bit terrifying there, but we can handle $100.

Update:  After about 6 hours of dealing with Paradise non-resident state tax forms, we ended up owing $46 plus $48 in late penalties and interest, for a total sum of $94.  So I guess the penalty wasn’t so small after all!

December Mortgage Update and Trouble in Monetary Paradise

Note:  this post was written before the election results came out.  Now there’s a lot more uncertainty than just DH’s job.

This month (November)
Balance:$3,913.33
Years left: 0.333333333
P =$1,194.19, I =$20.22, Escrow =$812.79

This month (December)
Balance:$2,714.41
Years left: 0.25
P =$1,198.91, I =$15.49, Escrow =$812.79

Whenever I start getting used to not worrying about money at all (seriously, I just paid $1.95 processing fee for DC1 to have hot school lunches for a month without trying to optimize not having to pay the processing fee again vs worrying about DC1 deciding zie wants to go back to cold lunch… not to mention not even thinking about the costs of paying for hot lunch!), something happens to add a bit of uncertainty to the mix.

For example, we get an opportunity for unpaid leave or DH decides he hates his job or etc.   So I stop not worrying and start paying attention again.

This time DH’s company has asked him (and everybody else) to take a 10% paycut for the next two months.  The boss and lead programmer are taking larger cuts.

The reason is a cash-flow problem with an underlying cause coming from employee turnover several years ago resulting in too many little starter grants and not enough longer-term big grants right now.  Once this cash-flow problem is resolved, they’ll be ok until April.  Which isn’t exactly a long time either.

We don’t need DH’s salary on top of mine for our regular expenses, but we do in order to not care about money at all.  To eat out whenever, to max out retirement, to fly to see DH’s family over Christmas instead of spending two days driving (something we’ve already committed to), to just donate money where it’s needed, and so on.

So, once again, we’re back to being glad we’ve saved a lot and not increased our expenses to match our income.  I’m not sure how this warning shock will change our spending going forward.  It seems like the 30K emergency fund in cash is still what we will want to have, but I probably ought to start aiming for that now instead of in March when the mortgage is finished.  [Update:  see previous post about how we’re just going to stockpile cash until the US government is sane again.  No 30K limit.]

Have you faced income uncertainty?  How do you deal with it?

Paradise puts me in charity with the world

We’re both living in our own paradises this year.  #1 has to go back in not so long from now.  #2 has no end date in sight.

But we’ve both noted that paradise seems to make us happier and more mellow.

Part of that I am sure is the weather.   It’s hard to be sad when the sun is shining and your toes are neither too hot nor too cold.  And #2’s Bad Place really did seem to be trying to kill her.  Like literally, with allergies and pneumonia and stuff.

And the food is always good.  And the libraries are awesome so there’s always something to read.  And there are lots of cool people around to socialize with if we want to socialize.  And nobody is talking about how awesome Donald Trump is.  It’s really easy to think that all is right with the world.

It’s not that bad stuff doesn’t happen.  Papers and grants still get rejected.  But that somehow doesn’t seem like such a big deal.*

#1 wishes there were a job for her in paradise.  But it isn’t like I was unhappy where we normally live.  It’s just so much easier to be happy here.  It’s like that nothing really matters feeling you get with middle age coming even faster.  It’s easier to focus on the important stuff– comes automatically instead of with effort.  I think we would live longer if we lived out here.

Does where you live affect how you view the world?  Are you happier living in different places?

*Personal tragedies are still just as tragic as they were when we were living elsewhere.  But the stuff that can be not sweated, well, why sweat?

Scenes from paradise

  • Hipster couple at Mediterranean restaurant at the table next to us gets their tea.  It is crushed fresh mint  leaves in hot water.  Man starts berating waiter.  “Where is the tea?  This is nothing but leaves!  There should be tea in here!  This is just leaves and hot water.”  The waiter apologizes and shows that the menu does describe the mint tea as being… fresh mint leaves in hot water.  But the waiter takes it back and the guy continues to grumble to his sympathetic companion about how he ordered mint tea but just got leaves in water and how can they charge $3 for that.  DH and I catch each other’s eyes and try really really hard not to bust out laughing.  We also fail to ask the guy just exactly what he thinks tea is made of, though we are both curious.  I bet this dude drives a bmw.
  • Yesterday DH heard banging while he was at work.  After it stopped he investigated and someone has put in a home-made wooden mailbox next to the park bench in the empty lot next to our house.  There’s also a bike with fruit in its basket and two cans of Campbell’s soup.
  • While DH is talking on the phone to his cousin, he looks out the front window and sees a police officer walking past carrying an orange rifle.  DH chooses not to investigate.
  • Outside the library three middle-aged women are discussing how there is now scientific evidence that consciousness is more than just biochemical reactions.
  • Update on the lot next door:  There is also now a lazyboy chair and a Christmas tree.  One of the oranges has moved to the top of the mailbox.
  • Update:  now apparently an entire living room/kitchen setup near the lazyboy and Christmas tree, including a tall lamp.  And a stone path to the brick pit he has set out as a firepit.
  • Update:  He spends the weekend removing ground cover with a spade.  He brushes his teeth.
  • Update:  It rained.
  • Update:  All the stuff from the empty lot is gone.  Including the mailbox.  All that is left is a burnt area where the firepit used to be.
  • Coda:  The parks and recreation department sent 5 people over to clean up the area and to cover all the bad bits with mulch.  It took several hours, though they did trim trees etc. too.

 

Ask the grumpies: Questions about living in paradise

Mid A asks:

[W]ould [you] want to live in paradise permanently, now that you have experienced it as a family? What income would you ideally generate to live a comfortable life (fancy cheese, travel to relatives, satisficing for keyboards, etc.)? Is the school environment more competitive and if so, what is your take on it?

Would we want to live here permanently?  Well… if I could move my job here, sure.  But I can’t.  Or if we were idle rich and not Mr. Money Moustache definitions of rich– like actually rich and could afford to buy a reasonably nice (for paradise) house someplace reasonably nice with cash and pay taxes and so on.  We knew we liked it here before living here as a family, though there are other paradises that we like more for some things and less for others.  So, given that I can’t move my entire department here, we’re going to stay in our small town.  If DH loses his telecommuting job, we will reconsider.  But up until that point, we’re staying put.  I honestly don’t know what I would do out here.  There are some SLACs, but they’re small, so there’s no guarantee they’d even have openings in my field.  Prestigious schools might have soft money openings.  Non-prestigious schools sound like high teaching loads and low salaries.  There’s not a ton of government or industry in my field of interest around here.  So who knows.

5 years ago when rents weren’t so high (3k/mo instead of 5k/mo — we’re currently paying 4k/mo because we got a deal on this place), I sat down and made that calculation including the increased tax burden and came up with 120k/year as a renter. That includes high quality full-time daycare for one kid for a year but only one car. And it is possible to get deals on housing if you keep your eye out for lazy landlords, so there are still places if you move quickly and are attractive to lazy landlords where you can get even 2K/mo for a 1200 sq ft 2-bedroom, but you have to be fast and seem like you’re going to stay for a long time.  We also have friends who bought at a good point and are paying less than 3K/mo on their mortgage.  In addition to rent increases, inflation has also happened since then.  So the answer would be something more than 120K/year if we’re renting and aren’t going to make a whole lot of sacrifices.  I don’t know what the answer would be exactly, though I will probably do that calculation at some point after we’re done, maybe without dealing with the additional tax burden though because that’s a pain to figure out if you don’t have to.

The school environment we’re in isn’t very competitive.  However, there are a lot of communities around here that have different levels of competition and different types of competition.  We were limited in where we ended up by DC1 wanting to stay grade-skipped (which knocked out one reputationally very competitive district and several not at all competitive districts), our inability to afford an extremely expensive place, and most landlords at the top of our price range not wanting us as tenants (cats, kids, the one year thing).  On top of that, within our district, many of the competitive parents send their kids to a lottery school that you can only get into by lotterying in the spring before kindergarten.  So my answer to that:  if you’re worried about too much competition, there’s a lot of heterogeneity across districts and within districts.  The same is true of preschools.  Here and in other paradises.  (And if you *want* the competition you may have difficulty being allowed to compete since the most competitive places tend to require waitlists or lotteries.)

Have any of you done the “What income would I need to live comfortably in paradise” calculation (for your paradise)?  Are you living in your paradise, why or why not? 

What free things have we been doing for fun in Paradise?

Paradise has the benefit of not being 80-gazillion degrees with 100% humidity.  WOOOOO.

Paradise has a lot of things to spend money on, but it also has a lot of fun activities that are completely free.  And we’ve been enjoying them!

1.  We have been going to all sorts of different parks and playgrounds.  The kids love this.  And, unlike the playgrounds in our hometown, they still have swing-sets.  Enjoy those swings while you still can, kids.  We’d do playgrounds in our hometown as well, and many of them are shaded, but even shaded it was really an early morning or late evening activity.  In Paradise we can take the kids whenever they’re feeling squiggly.  Drawback:  Their endurance is going way up.

2.  The library!  The last time we lived in a city this was a 20 min walk and we’d go once a week.  Now it is a 7 min walk and we go LOTS.  There are puzzles and so many books.  Their romance section isn’t great, but their other branches have more books and they deliver to this branch, so that’s been fun.  In our hometown the library isn’t as good and we have a lot more books at home so it was more of a once a month activity.  Related:  We’ve been reading more books.  DC1 has technically done two summer reading programs this summer, one in our hometown and ze is signed up for the one here.

3.  Free movies in the park.  Every Friday evening in the summer there are free movies in one of the city parks.  We do not do this in our hometown because it’s hot and there are too many mosquitos.  I don’t go to these, but the kids have been enjoying them (DH has been tolerating them).

4.  First Fridays.  Every first Friday of the month there’s music and dancing and booths and so on in the townsquare closest to us.  DC2 has been talking about the first one ever since it happened and cannot wait for the next.  At home the town next to ours has first Fridays, but it’s a drive and there’s less free stuff.  Related:  there have been a couple of community street fairs that have a few food stands for local restaurants but are mostly things like the firepeople letting people climb all over the firetruck, ditto police people and a police car, the library staff playing banjo music etc.

5.  Driving to state/local parks.  (This does cost gas.)  Some of the state parks in the area cost $ (though not much money) for either entrance fees or for parking, but many of the smaller ones do not.  They spent two hours throwing pebbles and sticks into a pond and did not want to leave.

6.  Grocery shopping/farmers markets/specialty markets.  While not technically free, we have to get food for the week *anyway* and it’s been fun seeing all the different kinds of food there are.  The kids love Trader Joe’s!  Our friends out here with kids the same age say they never take their kids grocery shopping because they don’t behave, so YMMV on taking kids to do chores.

7.  Biking.  I haven’t gotten a bike yet [update:  I ordered one], but DC1, DC2, and DH all have bikes, and DH has a seat for DC2 for longer distances.  They have been having enormous fun just biking around.  They’ve been doing a lot of seeing if they can get to daycare and DC1’s school, checking the cheap neighborhood bike guy to see if he has any adult bikes in yet, trying out playgrounds that are farther afield, and so on.

8.  Walking.  Just checking out the neighborhood and places we can walk to from where we live.

9.  Playing with friends.  We have some friends out here with kids exactly the same age as our kids and they’ve been having a great time.  It’s been really odd socializing mid-week instead of just on weekends.

10.  Going to short plays put on by a summer camp every other Friday just outside the library.

That’s it for so far, but we haven’t been here long!  I suspect there will be activities attached to public school.

What have we been doing less of?  Less ipad.  Less Netflix.  Less swimming (DC1 is taking lessons, but the HOA pool was free and we don’t have passes for the nearby pool).  Fewer video games.

What have we been doing that costs money?  Street fairs with yummy food.  DH and the kids went to a museum (there are plans to do more, but spread out and when relatives visit).  DC1 did a daycamp that had a field trip to an amusement park.  As mentioned before, we signed DC1 up for a few daycamps in addition to swimming lessons.  DC2 has daycare.  DH has used up most of his saved up allowance on exploring coffee shops and sandwich places.

What free fun things do you do?

Renting in paradise, an update

I’m afraid to post this and almost afraid to write it, but we’ve sent in a deposit for a place in paradise.  How did we do on our priorities?

1.  I will be able to get enough sleep at night– no thin walls, no cigarette smoke.  (Also non-crazy landlord, but how does one screen for that?)

We ended up with half of a duplex that has a staircase separating the two parts, so it’s more like a townhouse.  There’s an empty lot with trees on one side and a house on the other side.  It’s also on a busy street, but I think I can handle traffic noise.  The landlord seems laid back and our friends know the tenants who are moving out (who are moving out because they bought their own place).

2.  At least 2br.

Exactly 2br.

3.  In unit laundry.  Dishwasher.  Reasonable appliances (though we can always buy cheap ones).

Laundry is in the garage.  Dishwasher in the kitchen.  The other appliances seem reasonable, though my in-laws have their stove and it’s not my favorite.  (It’s that electric kind with the glass top so it’s easy to clean, but not that much fun to cook with.)

4. In a decent to good school district and DC1 can stay grade-skipped (or they want to test before keeping the skip– I’m fine with that too).

The elementary school will allow DC2 to go into 5th grade.  It’s a 9 star school with a good mix of demographics and SES and not 100% white or wealthy.  Languages are optional and expensive after school ($500) and I don’t think they offer band or anything like that (update:  there is a musical instrument option offered through the school from a local non-profit), but we’ll see once we’re allowed to actually register.

5.  We can keep at least our main kitty, little kitty.

Cats allowed!

6.  A reasonable commute to:  Sabbatical Uni, DC1’s school, DC2’s preschool, given that we will only have one car.

7 min walk to DC2’s preschool.  It’s an hour and some round-trip if DH walks to drop both kids off, according to google.  There are some other options, including having DC2 bike hirself, or walking to the closer school and taking the bus ($700) to the assigned school, but we’ll figure that out.  For me it’s about a 30 min bike-ride or a 40 min drive (20 min without traffic…) or a 40 min bus drive (20 min without traffic).

7.  Walkable neighborhood that includes a playground.

The playground is across the street.

8.  Allows us to take Nice kitty

Allowed!

9.  3 br

Bzzt.  Only 2br.  :(

10.  Walking distance to a library

Yes!  7 min walk.

11.  Walking distance to shops

Yes!  Like, right around the corner distance.

12.  Excellent schools (as opposed to decent)

9 star is pretty good.

13.  Driveway or garage space, not just street parking.

One car garage and driveway.

14. Out door play area such as yard.

Bzzt!  There’s basically a dog run.  But hey, there’s a park across the street.

15. Furnished.

Bzzt!  I hear Ikea is cheap.  Once we have this lease thing figured out we will ask if the current tenants want to sell us any of their stuff.  Figuring out how to get other stuff over there is, of course, a bit of a nightmare problem we’re still trying to figure out.  (Like, we have to take the piano, but what about mattresses?)

16.  More than 1000 sq ft.

1200sq ft.  We had an apartment in grad school that size at the very end (using the money we’d saved being RAs for two years) and it seemed enormous.  It will probably be less enormous with two kids.

17.  Nice appliances.

Bzzt!

18.  Nice extras (countertops etc.)

Bzzt!

19.  Fruit or nut trees.

Bzzt!

20.  A price considerably lower than 5K/mo.

This place was listed for 4K/mo.  I don’t know what our friend out there told them, but she sweet talked the landlord into thinking we’re so amazing she should cut an additional $100 off the rent.  Also some additional utilities are included in the rent because it’s a duplex.  So instead of paying close to 5K, we’ll be paying just under 4K/mo.  That means I’m feeling a bit more relaxed about money, especially with a month of summer salary also happening.  If our house rents out, we’ll be able to make our savings goals!

And as an added benefit, since our friend did such a great job talking us up, if this all goes through, DH won’t have to spend a week of his vacation time apartment-hunting.  So he can spend it doing moving stuff instead.  :)

January Mortgage Update: Getting ready to spend a year in paradise

Last month (December):
Balance:$34,190.77
Years left: 2.5
P =$1,066.94, I =$147.47, Escrow =$788.73

This month (January):
Balance:$31,114.84
Years left: 2.25
P =$1,079.06, I =$135.34, Escrow =$788.73

One month’s prepayment savings: $7.91

If we kept up with our current rate of pre-payment, we would be done with the mortgage completely in less than a year.

We aren’t going to do that.

Why not?  Because we need the money!  Why do we need the money?  Because I’m only getting half-pay and we’re moving someplace for the year where daycare and housing are both twice as expensive.  (It’s all official!)  And taxes are insane because they provide social services and things.  Crazy, I know!

So we will need that extra 2K/month to pay for goods and services instead of pre-paying our mortgage.

It seems like there’s always something going on with money–getting ready for DH to quit his job, adjusting to DH having a job, then adjusting to a year at half pay with bigger expenses.  Life is never really in steady-state.

There’s so much to worry about.  Housing, schooling, daycare.  Months worth of money posts, eh?

We still don’t know what to do about the house.  I’m strongly tempted just to get a trustworthy grad student to kitten-sit in exchange for free rent and taking care of the house and utilities (we’ll be bringing Little Kitty with us, but we can’t take 3 cats, so either the cat formerly known as mean kitty will have to go with a relative while we take nice kitty who pees with us, or we’ll leave both kittens with a sitter.)

DH thinks it will still be worthwhile to try to find someone to rent at market price, even though that means we’ll have to fix the bathroom, repaint, and keep things clean constantly (also probably pay for storage for our furniture).  I think we’ll end up probably doing a hybrid– posting to sabbatical and new faculty sites and then getting a house-sitter if nobody bites.  Possibly striking a deal with new faculty if they are amenable.  We’ll see.  We may not worry about this until March.  I don’t know.

The most we would get for renting the house would be around 20K.  DH thinks that’s a lot, but given the amount of work we have to have done first and the annoyingness of keeping lawn and house sparkling (not to mention housecleaning expenses), I’m not so sure.  But maybe if we avoid Craigslist and just stick to a few exclusive sites it won’t be so bad.  Maybe we’ll get lucky.

I hope this all works out!  But if it doesn’t, I don’t want to be stressed.  Based on my projected savings calculations and the savings we did when DH was unemployed that we never put away (because we knew this was going to be a possibility, though we *thought* it would happen last year), we should have about 85K in our emergency/to-spend fund by May.  Hopefully that will be enough to keep us from stressing out if we don’t find tenants along with the paycut and the additional required expenses.  Right now I’m hoping to continue contributing to retirement and the 529s (although retirement literally would take up all of my take-home pay, so I won’t be able to completely both max it out and do a DDA and pay for health insurance), but that’s another area we can loosen if we need to.

I’m both excited and scared.  But I’m not that worried about money.  Still, we’re still going to have to stop prepaying the mortgage sometime this summer.

(Technically if I had another 72K, or even another 48K, I would be less worried about money.  A lot of our problems would be solved if we could just afford 6K/month to rent out a furnished house from a professor on sabbatical.  Our friends say there’s going to be a market correction, but I’m not holding my breath that it will happen before we get to or even before we leave paradise.  Bubbles can take a while to pop.)

link love (from Paradise!)

#2 is marooned in a sea of boxes in the new home.  So many errands.

A gai shan life steps towards parenthood.

Kinda wanna try this easy pasta recipe.

Should you buy Alibaba?

trigger (rape) warning:  science has a thomas jefferson problem

rage rage rage rage #chroniclesucks #allaboutthemens #victimblaming #patriarchy #anotherrapetriggerwarning

This owl wants to ask you a question.

wait, WHAT?

Science explains the double rainbow I saw earlier this week.

For my friends in the same situation:  The people brought home a strange creature.   (each panel better than the one before!)

This is what a feminist looks like.

xykademiqz nails it again.

I think I would like to be a book butler, assuming the pay was good.

Much love Hufflepuff fanfic

#YesAllFrankensteins

we learn nothing from ferguson

I cannot tell if most men are attractive or not

After enough reading of Captain Awkward, I learned that being demi-sexual is a thing.  It is, in fact, a thing that I am.

What that means is that I do not get physically attracted to people unless I know them really well first.  Love at first sight is straight out for me.  I’m definitely not asexual, as my feelings for DH can attest, but when DH is out of the picture I get much closer to that end of the spectrum.  If anything ever happens to DH, I will likely spend the rest of my life single because I am not going to find  “chemistry” on a first or even third date.

Along with that, I really cannot tell which men are supposed to be attractive.  Women I think I can tell because culture is better at defining attractiveness for women and pushing that culture on us.  With men, I think there’s a lot more leeway allowed for what is considered attractive.  I can tell if men’s bodies are supposed to be attractive– if their muscles look right, then that’s attractive for men.  But with faces it’s a lot more difficult.  If they look like DH, they’re more likely to look attractive to me.  If they have symmetric features, then I can tell that they’re supposed to be attractive.  But as I scan through the Bachelor in Paradise cast, I really just cannot tell.  And in theory, all of these men were picked because they *are* attractive.  They wouldn’t be on Bachelor in Paradise otherwise.

When I started watching Try Guys videos, I could tell that Eugene was conventionally attractive.  He’s got great hair, symmetric features, and a dancer’s body.  But the other three guys didn’t look that great.  As I watched more and more of the videos, and got to know their characters, they started looking good to me because they are likeable characters.  But are Keith, Ned, and Zach actually good-looking?  I have no idea.