09:52 – Yesterday I started on taxes, which get more outrageous by the year. I’m sure we’ll have to write big checks for both federal and state taxes. We always do.
We finished series eight of Heartland last night. Amy married Ty after only eight years of dithering. I expect next season will be all about the newly married couple, and probably about them having a baby. One commenter on the CBC website said he’d just happened across the first five seasons on Netflix streaming and hoped to be watching Amy become a grandmother in 25 years or so. That’d be 33 seasons, which the series has the potential to do assuming that it continues to be funded and assuming that people are still making TV series 25 years from now.
I got email from Jen, who’s wisely decided to try cooking and baking at least once or twice a week using only her long-term shelf-stable stuff. The first problem she ran into, of course, was that most of her recipes call for fresh products like dairy and eggs. So she says she’s “cheating” on those items, but asked for suggestions. I told her to visit the WalMart website and order #10 cans of Augason Farms powdered eggs, butter powder, and cheese sauce powder and work those into her recipes. Two dozen #10 cans of each will cost them less than $1,200, or under $200 for each of the six people she’s planning a one-year food supply for, and will go a long way toward making the bulk dry staples she’s storing into palatable meals. I told her to start by ordering one can of each and trying them out. All of them are “best by” for one year after you open them, and a lot longer if you stick the open cans in the freezer.
As a bachelor I have never done much cooking or baking. I’m taking prepping as an opportunity to teach myself how to make real meals from the base elements of food. I’m enjoying it and I find that I do eat a bit healthier when I can control what goes into my food. No hidden artificial sweeteners (a personal prejudice of mine).
On another front I’ve been researching solar panels, chargers, inverters and batteries. I have a very low electrical needs since my house has gas heat, hot water and stove. For just a couple of thousand I can almost go completely off the electrical grid. Any advice would be appreciated.
I seriously doubt you can go off the grid for anything close to $2K. Batteries cost a lot, and their useful lives are relatively short, so you’d need to plan for that on an ongoing basis.
Gas heat is fine, but a typical furnace fan has a start-up draw of 2 KW or so, which is pretty major. Refrigerators/freezers are other items with big start-up draws.
I suspect you’ll find that it’ll actually cost $20K or so to go off the grid.
THE END IS NIGH! REPENT!!!
http://www.cnn.com/2015/04/01/travel/feat-antarctica-highest-temperature-ever-recorded/index.html
Bob:
How do you track your cost of goods sold? It takes my wife (who does my one-man business accounting) two months to go through all the invoices from electronic parts suppliers, allocate purchase price information to various products I sell (each of which has typically 50-75 components) and then decide how much remains in inventory of the purchased parts.
I can’t help but think she is approaching the subject like GM must do with screws and nuts that go into automobiles. She will not use a computer, and copies all the information into hand written ledger books and comes up with some numbers using a printing calculator.
So when you say you have just started the tax work, I’m amazed based on our experience. And we use an accountant to prepare and file the returns.
“Yesterday I started on taxes, which get more outrageous by the year.”
Got ya beat.
Yesterday morning the IRS once again seized our bank account and cleaned us out, totally. Zero warning, in direct contravention of their own regulation of requiring 30 days notice. Second time they’ve done this.
I’m contacting lawyers today.
“Batteries cost a lot, and their useful lives are relatively short,”
This is somewhat true for values of lot and short, and systems without them have some unwelcome surprises for the prep minded.
Grid tied solar, that “runs your meter backwards” or “uses the grid for storage” or “some other obfuscation” is not backup. It came as a shock to many in the NE US that when the grid is down, so is their whole house solar. You may be able to generate all of your needs with such a system, but regulations keep it from being truly independent and prevent it from running when the grid is down.
Going with a true off grid backup storage system changes all the dollar calculations for rebates, tax breaks, payback, etc. If you meant $2k NET, I’d be skeptical but not hostile. If you meant $2k for a storage system, please post your gear list. I’d love to see it as I’m currently beginning to think about a long term “backup” to my backup generator.
nick
@OFD, I feel your pain. I once came back from a 2 month business trip, sat down to pay bills, and thought “I better check my balance first.” They had zeroed all my accounts, including money that did not belong to me (float for expenses.) The notice was returned to sender as I had been gone for 2 months.
After the panic and sick feeling started to subside, I got some good advice from a business owner friend. He told me to wait until I had an agent assigned to my case and then ask for it back. Long story short, I was able (using 42 pages printed from quicken) to show the agent that A. all the money was already spent (2 months of bills) B. it would end my business (IRS doesn’t like putting employees on unemployment) C. some of the money didn’t belong to me. I got all but my past due monthly payments back, had my quarterly reporting waived, and got a reduced payment plan. This was shortly after the IRS got spanked and went to their “kinder gentler policy” so things might have changed.
I was surprised by how fair and accommodating they were once I was able to document things. They went from “F U, we’re keeping it all” to the outcome I mention above in a day or two.
@Jack Smith, you need to get her on a computerized system. Quicken is straightforward and powerful. There are FOSS solutions to that may work for you. The ability to quickly print reports saved my a ton of grief in the episode with the IRS.
It’s my opinion that ANYONE who has income other than one employer, who files anything other than 1040EZ, should be using a tax professional. NOT H&R Block, but someone who does it full time, preferably someone who is an IRS Enrolled Agent, and can speak for you in court if it comes to that. I file about an INCH of paper, and would not think of trying to do it alone. Any good pro should easily be able to save you more than the cost of their service.
Don’t go it alone when you can lose everything you’ve worked hard for.
nick
Well, I did say “almost” off the grid. But for $4K I think I could do it. For example:
http://www.theinverterstore.com/720-watt-off-grid-solar-power-kit-with-3000-watt-inverter-charger.html
I just don’t use that much electricity. Good deep cycle AGM batteries tied to a smart controller are good for a minimum of 5 years and most likely longer. The 3000W inverter in the above link has a 9000W surge capability for motor startup surge.
Last year I used a total of 4364 kWh. That’s about 500W/hour. That includes running my window AC on hot nights and a dehumidifier in the basement in the summer. I just don’t use that much juice.
Last year I used a total of 4364 kWh. That’s about 500W/hour.
Peak will be MUCH higher.
So you used about 12,000 W-hrs per day. Those panels are rated to provide 720W under the best conditions imaginable, which means high altitude, dry air (high transparency atmosphere), positioning them exactly perpendicular to the sunlight (which means you need a tracking system), absolutely clean panels, and so on. In reality, you’d be very lucky to get half that in full sun.
Now, figure out how much full sun you get per day and how likely you are to go without full sun for a day, a week, or more. That has a big bearing on how much battery storage you need. (There are sites that provide average insolation by geographic coordinates, and it can very a great deal.)
I’m not sure about those batteries. They look very small. What’s their voltage? I assume they’re probably 6V, especially given that they’re using six panels and three batteries. Many solar panels provide 18V output, which if I’m right would mean that They’d be running two panels per battery in parallel. That means those 200 amp-hour batteries are storing 1200 watt-hours each. (And what discharge rate are they assuming? The faster you draw current, the lower the amp-hour total available.)
Assuming you average three hours of full sunlight per day, that means those six panels would produce a total of 1,080 watt-hours per day, plus some additional at times when it’s overcast or partly cloudy. If that’s accurate, it would take three days to charge your three batteries from 0% to 100%, and after a full charge they’d have sufficient capacity to provide 500W for a total of maybe 7 or 8 hours. And those numbers will vary significantly by time of year.
Given your current power usage, I’d want to have a dozen of these systems to cover those needs. (Actually, I wouldn’t. A larger scale system will cost a lot less per unit capacity.) Of course, if you live in the high desert, you could get by with less.
Incidentally, my $20K guess *included* subsidies and tax breaks.
Thanks, that is an interesting kit.
I can run most of my household on a 5000 w geni, with the exception of central air or electric appliances. I can run the AC fan and a window unit, and lighting. I’m careful which loads I run simultaneously, and I listen for the engine sound changing under load.
You are basically saying you can run your house on 2 @15A outlets, which seems REALLY low. What is your service entrance rated for?
Some considerations for you.
What is your peak (base plus startup surges)?
What are you actually pulling day to day? (put a meter on it, or something like this – http://www.theenergydetective.com/ )
– mine says I’m currently using 2.15 KW and that is my peak for today. At some point I used my electric range, and the central air must have kicked on at least once, so it seems low. I may have monitoring issue.
You must have refrigerators, maybe a freezer? TV? PCs?
Don’t calculate, measure. Turn everything on. Measure your actual load.
What is the actual insolation at your location? Will you get peak out of the panels? Will you be able to recharge the batteries fully under load, with normal sunshine?
– http://www.nrel.gov/gis/solar.html for some maps…
At a minimum, I’d want more batteries. And more panels… 🙂
nick
Gahh, this is rambling.
For comparison, most RVs and campers use a 30A service, so this is definitely within the realm of possibility if that is the size of your house and your load, and usage patterns.
EDIT- I see that they market this kit specifically with RVs in mind. Think about that usage pattern. That isn’t most people’s usage in their home, but it might be post SHTF. It seems like a good backup for charging stuff though in an extended outage.
(but it still seems way small.)
@Jack: If you have any sort of volume, trying to manage parts inventory and accounting by hand is, no offense to your wife, pretty crazy. It takes an insane amount of time, is highly error prone, and is never completely up-to-date.
On the other hand, I see from your website that you got your BSc in 1968, so maybe this is more of a retirement activity, and time is not of the essence?
If you want to think about software, I’d be happy to talk with you about how to go about finding something useful. FWIW, I’ve never seen a FOSS system in the area that I would trust my business to – commercial is the way to go.
I file about an INCH of paper, and would not think of trying to do it alone. Any good pro should easily be able to save you more than the cost of their service.
Hey Nick, what do you pay for that service?
I file about an inch of paper also but I do it via TurboTax efile service over the intertubes. I have an employer and two side businesses. The wife also has an employer and a side business that is slowly shutting down. Fairly complicated but not so bad that I cannot do it.
My goal isn’t to go off the grid. This would be an “emergency generator” and I would use it to run certain items while the grid is up and running (e.g. the little window AC) to save money and recoup cost.
If I did decide to go “off the grid”, this system, with very careful power management, could supply my house. No luxuries like the AC or an electric space heater on the front porch, though. The total kWh used last year includes some profligate use during the summer months. In January I only used 1/2 the average I mentioned.
I used an “enrolled agent” for my last couple of tax returns before expatriating. I had mixed feeling about it. On the one hand, the guy is working for me, he wants return business, so he has an incentive to save me as much money as possible. On the other hand, his “enrolled agent” status depends on the goodwill of the IRS, so is he really working for me? On the gripping hand, I figured having an EA’s signature on the bottom of the return ought to reduce the chances of an audit.
The US tax system is just insanely complex. It should be possible to file personal taxes on a postcard. The entire tax industry contributes nothing to real GDP; it is all nonproductive effort, and the economy would be healthier without it.
Edit: The EA turned out to be bloody careless. He got my wife’s SSN wrong on her expatriation return. He got my name wrong on my expatriation return. Leaves me wondering what mistakes he made in the returns themselves. I suppose he’s totally swamped at tax time, but still – that kind of basic mistake is just inexcusable.
@Lynn,
I think we pay about $800, which varies if there are extra schedules. I’ve been a client for a decade, so I may not be paying market rates.
We have between us currently one employer, but that is complicated by commission payments, one sole proprietorship, passive and active rental income, a wide variety of retirement stuff, including REITs and partnerships, a service based business, and a ‘things’ based business. There are also some kid things that affect the taxes too, although I’m not sure how much.
It’s possible that we could do it ourselves with a combination of Quicken and TurboTax, but we would have to spend a LOT more time on it, and I’m sure we would either leave money on the table, or risk fines for underpayment. We DO need to be aware, and active, just like you are with your physical health and your Dr, but more on the level of ‘educated and interested layman’ than professional. Given how much it changes from year to year, it is a full time job just keeping up with the tax code.
The one year we thought we would try someone new (and local) my wife basically ran it thru turbotax as a double check on the new guy. She found several major misses, and we went back to my preparer even though this guy’s office was well recommended. It helps to have an ongoing relationship, so there is an understanding of how your businesses and life work, and a continuity of strategy (like depreciation schedules.)
I started using a preparer the year I had unemployment, full time employment, and self employment. Having to file 1040A anyway for the unemployment made the choice to pursue savings by itemizing and sched C a no brainer. I’ve never regretted a dollar paid to my preparer since.
BTW, I recommend meeting with your tax preparer in Oct or Nov to do a rough pass at your taxes. If you have any business income or deductions at all, you can probably find some things that will reduce your taxes, or help your business, to do prior to the end of the year. It may be as simple as delaying a purchase, or moving a needed purchase earlier. In any case, having a couple of months to execute is always a good thing.
nick
Bob, I don’t think your worst case scenario applies. Modern solar panels work well and I can put them in a place of all day sun.
My electrical usage patterns might not be that different from an RV user. I’m single and live alone. In the morning a couple of hours with a few lights, a coffee maker on for 20 minutes, the TV for a little while to see if the world collapsed overnight. Then the only things left using electricity after I leave for work are a few power leaches (wall warts and such), fridge and the furnace fan in winter. In the evening it is similar before I go to bed; a few lights, some TV and the fridge and heat. I don’t run outside lights. I don’t leave lights on in empty rooms. If I was diligent about the power leaches and the used the AC less I could probably cut another 1/4 of my electric usage.
This will jump from intellectual to empirical since I do plan to buy something in the next month or so. Not necessarily the system I linked to, I will probably search out better quality and / or prices for individual items as I continue my research. And I have a limited budget.
I pay $1,300 per year for our Sub S business which has ten employees, 2,000 invoices per year, etc. I had to argue extensively with the guy about the conversion of the accrual based books to cash basis for tax filing this year. He finally came around to my thinking but it took me summoning him to my office and making him show me his calculations. He then realized he had a problem which was going to cost me and the other shareholders quite a few bucks.
Personally, I file using TurboTax and have not seen any problems with it in the past few years. I’ve got to be careful with the occasional tax-loss carry forwards and the depreciation of my office property though.
Peace in our time! Obola == Chamberlain.
http://freebeacon.com/national-security/iran-brags-about-nuke-concessions/
Peace in our time! Obola == Chamberlain.
No shit! Obola and Lurch think Obola will give them a free speech and all agreements are followed because RACIST not too. Just like BJ Klinton and the NORKs.
I’ve used Quickbooks for 15 years (Online for the last two). My CPA can log in and work it. He also comes by once a quarter to go through all with me. He does the 1120 and my 1040, also. QB has an inventory module that might be worth looking into. QB online integrates pretty well with Fed and State tax systems. YMMV.
Incorporate for tax protection. And charge as many expenses as possible (the one thing the IRS says you shouldn’t incorporate for. lol!)
I’ve never had the IRS pull money from an account. A good reason to keep cash in your mattress. The IRS is immune, of course, from any wrong doing.
Chad says on 2 April 2015 at 11:23
THE END IS NIGH! REPENT!!!
Hmph! Homosexuality, paedophilia, immorality, drug culture!
All those naked little fairy penguins in Australia getting high on grass.
And then they take photos, and spread it all over the Internet.
Disgusting, I tell you! Just disgusting.
@OFD: Just out of morbid curiosity: what lets the IRS empty your bank account? Seems to me that some sort of court order (even if it is from an IRS court) ought to be required. Or can this just be a flea in the brain of some IRS bureaucrat?
Asset forfeiture happens when a government agency decides to do it. You don’t have to be convicted of a crime. You don’t even have to be charged with a crime. Basically any government agency can seize your assets at any time for any reason by a simple administrative decision. IIRC, Dean Koontz wrote a novel about this 15 years or so ago. He wasn’t exaggerating then, and it’s gotten much worse since he wrote the book.
We have been using Peachtree for our corporate accounting for 20 years at the advice of our CPA. The same one who I was just arguing with about the conversion from accrual to cash basis. He now advises people to use Quickbooks. The conversion for us would be a nightmare. Probably have to run two sets of books for a year or so.
Asset forfeiture happens when a government agency decides to do it.
The IRS usually does not use asset forfeiture unless they are worried that you are getting ready to do something. Or, you have pissed them off and they want to hurt you.
OFD, you need a lawyer. Yesterday! And I hope that you have some money in the mattress.
@brad; what Dr. Bob said; the State can do whatever it wants to us. No reason given, no warnings given, whatever they want. The IRS’s own regulations, which you can read online, say that a 30-day “final warning” is to be given before they take this step. They didn’t do that either time.
And this time we’d done everything they asked for and filed the paperwork and were waiting to hear from them weeks ago what they expected from us for an installment payment plan. I did exactly what the guy on the phone told me to do by the deadline he gave me.
Mrs. OFD has been a wreck over this; we’ve got the usual pile of bills and Princess demanding money again, etc., etc. Mentioned this during the ‘group’ today down at the VA and they echo Mr. Lynn; yeah, we need a lawyer yesterday. I have one to contact tomorrow about this; other vets also suggested contacting our Congress critters here, get more artillery involved.
No money in the mattresses but I’d just managed to move some dough onto three credit cards and our gas cards are OK. We should manage alright until her next check/s roll in, at which time we’ll just cash them or put them in MIL’s account. Probably a good thing it isn’t direct deposit after all. Of course they can nip this in the bud by grabbing her checks at the source, so that’s still a possibility.
Dude, that sucks. The real problem is that the IRS is a multiple headed hydra. You are always dealing with a new person every time you call in. We just got a form 8802 out of them for our customers in Greece, only took about eight months to get everything done properly. To just get a single form!
I had a problem with the IRS back in 1986 when they got confused between me and my dad. They gave us seven days to settle it out, took me five days. If I knew then what I knew now, I would have let them seize our home. It flooded two years later (that was a lot of fun).
I just found the perfect house for us, each person can have their own floor (thats a joke!). Built in 1912 by Clem Basset, a Texas Ranger. Carried two guns on his belt, two guns in his boots, and two guns in his saddlebags.
http://har.com/419-macek-/sale_59274131
http://homeorbusiness.weebly.com/history.html
Of course, they need to lower the price by a third or so. Half would be even better. This house is two miles away from our office. The downside would be the maintenance would probably eat me alive. I can just imagine the painting bill every five years on all that old wood.
Nice looking place!
You being so close, did you get to the Hamfest last Saturday? Some good bargains there…
nick
Nope, not a ham radio fan. I guess that it was out here in Fort Bend County?
Sure it’s got enough bathrooms?
My place was about $200k less and about 1/3 the floor space.
Sure it’s got enough bathrooms?
My place was about $200k less and about 1/3 the floor space.
The wife has toured the house. When the current owners bought it 11 years ago, they turned it into a B&B (bed and breakfast). So they turned all the bedroom closets into bathrooms to make it more attractive. Unfortunately, the number one rule about real estate is “location, location, location!” and this property violated that rule for a B&B. If you are going to be in an isolated area then it darn better be spectacular and not in the no man’s land between two residential subdivisions.
Ugh, I’d hate to be in the B&B business. British friends were thinking about it many years ago, fortunately they didn’t do it.