California E-File For Free

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I use TurboTax to do my federal and California state income taxes. When e-file first became available, I remember having to pay a “convenience” fee of $15 each (for a total of $30). It seemed strange to me that I had to pay to save the federal and state government money; they didn’t have to hire someone to input my printed tax forms after all. Thankfully, a few years ago, the IRS finally realized this and made federal e-file free. Unfortunately, the state e-file for TurboTax has always required a fee, which has increased to $19.99 this year.

CalFile

UncleSamMagooInitially I blamed California for the state e-file fee; but last year, I found that California did provide several options to e-file for free and that I qualified for CalFile. The $19.99 fee is actually imposed by Intuit as a service fee. CalFile is a web-based application that allows you to fill in and submit an online Schedule CA 540 state income tax form to the California Franchise Tax Board. Because I had the California 540 form completed in TurboTax, all I did was to copy the total amounts from TurboTax into the CalFile web forms (which referred to amounts on the state 540 and federal 1040 forms by line numbers).

CalFile is totally free and easy to use. If your taxes are simple and you make less than $169,000 if single (or higher amounts if head of household or married), you can use CalFile. Check the CalFile qualifications. This year, you are required to create an account to use CalFile; however, both the CalFile Deluxe and Basic account types are free. An account allows you to quit and continue your online 540 form at a later time.

If you are doing state income tax for another state than California, I suggest going to your state’s website to see if there are free e-file options available.

CA SDI vs. VPDI

While we are on the subject of income taxes, when doing an itemized federal income tax return, you are allowed to deduct mandatory state fees in addition to the state income tax. Such a mandatory state fee is the California State Disability Insurance, which appears on the W2 form as “CA SDI”. If you work in California, this state-administered disability insurance premium is automatically deducted from your paycheck and totals to around $1000 a year. On the federal income tax return, this mandatory fee is considered a state tax and thus is deductible.

Until a couple years ago, TurboTax did not deduct the CA SDI in my itemized federal 1040 form, even when I explicitly inputted it as part of the W2 form. I had to manually work around TurboTax’s limitation by changing the deduction amount in the 1040 Schedule A form (line 5, “State and local Income taxes”). The latest version of TurboTax will recognize the CA SDI input on the W2 form, tag it as a “CA SDI” type, and deduct it properly on the Schedule A form.

In California, as an alternative to CA SDI, employers have the option to administer their own disability insurance plans, which must provide equivalent benefits as the CA SDI plan does. This is called the California Voluntary Plan Disability Insurance, which appears on your W2 as “CA VPDI” or CAVPDI. Because the costs of the plan, including administration and any employee subsidies, are considered a deductible business expense, some companies may decide to go with a CA VPDI after running the numbers and finding out that they could get a net gain.

When the CA VPDI first appeared, it was unclear as to whether or not an employee can deduct the CA VPDI on the federal income tax return. It is a mandatory fee indirectly mandated by the state after all. And from what I heard, the IRS did not correct the forms submitted by those who treated the CA VPDI the same as a deductible CA SDI. Unfortunately, the IRS eventually decided that the CA VPDI was not deductible by employees in the IRS Rev. Rul 81-194 ruling, which stated:

“Amounts withheld from wages of employees for contributions to voluntary plans are nondeductible personal expenses under section 262 and are not deductible as taxes, business expenses, or medical expenses.”

This IRS ruling is not a big surprise. This decision resulted in more tax revenue for the federal government, so it was actually a no-brainer decision. California followed suit by issuing an update to the Schedule CA 540 instructions to omit wording which suggested that the CA VPDI was deductible on the federal income tax reform.

So, just remember that you can deduct CA SDI, but you can’t deduct CA VPDI. The latest version of TurboTax will recognize the CA VPDI on the W2 form as a “CA VPDI” type and won’t deduct it in the 1040 Schedule A form.

Just in case, don’t forget that you can deduct your car’s vehicle license fee, which is a part of the yearly DMV vehicle registration. The vehicle license fee amount can be found in the itemized costs on the DMV vehicle registration renewal form that you get each year. It is a mandatory state fee and can be deducted on your federal income tax return.

Free Tax Software

I suggest filing your income taxes late so that you can borrow the TurboTax software CD (preferably, the version that includes one free state) from your family or friends once they are done with it. This will save you the cost of purchasing TurboTax, which varies from $40 and up. Alternatively, the online version of TurboTax provides free federal filing, but requires an additional $27.99 for a state filing.

I believe that the above information still applies if you use other tax software, like TaxCut.

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Who Are We to Blindly Judge?

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When I was very young, in elementary school, there was a celebratory event with cookies and punch. I remember taking extra cookies. As I was wrapping them up in a napkin, I looked up to see my teacher, whom I liked and respected. She had a cold, frozen face on and I could see the blistering stare of disapproval that she was attempting to suppress. Shamed-face, I turned away.

045GirlCryingAs I think back, I realized that it was worse that she didn’t ask me why I was taking extra cookies. I would have answered that I was saving them for my younger sisters. We were recent immigrants and didn’t get the luxury of cookies so often. But she didn’t. Instead, she made a quick judgment. And though she tried to hide her disapproval, I was able to sense it and be affected by it. I reacted with feelings of shame.

I am not making out my teacher to be some sort of horrible person. She isn’t. What she did was what many adults would do almost unconsciously in the same situations. I’ve done it. You’ve also done it. We’ve done it to other adults and to children. In the greater scheme, this is how I imagine cultural mores and social conduct are trained into children and enforced in adults.

As a sensitive child, I reacted in two ways. First, I learned to inhibit my own actions by imagining what others would think of them beforehand. Second, I made a vow to not judge others in any way. The first was a bad decision to follow in extreme and turned me into a “nice” person; which turned out to not be a very nice thing to do at all. The second, I’ve often failed at and it remains to be seen whether in the end, it is a bad or good decision. I think good and I will try to convince you so.

Why Judging Can Be So Wrong

I have two problems with judging. The first problem is that we judge the motivations of others. We say they did something because they thought or felt a certain way. Can we truly know what someone is thinking or feeling? Even if they tell us, we can’t be sure that they are not liars or that they don’t even know themselves. Most likely, they will tell us rationalizations and justifications that make them appear in the best light.

We are worse when we ascribe negative motivations like hatred to behavior. Supposed a neighbor invited you to her party. At the party, she doesn’t talk to you at all beyond a quick hello and you observe her talking to and laughing with others. You think, she doesn’t talk to me much because she doesn’t like me. But maybe, she was busy being the host and taking care of those whom she thought needed her the most. And she thought that you could take care of yourself and do the mingling on your own. She made a judgment and so did you.

The second problem is that we judge the actions of others. Have you hear the saying, don’t judge people, judge their actions? Well, it can be wrong. Some folks perform what can be considered bad actions for all the right reasons. Others can perform what can be considered good actions for all the wrong reasons. Can you tell which is which? Can you tell if it is neither? I can’t.

Take the over-used example of a person stealing food. Stealing is a bad action. What if their children are starving? The action is still bad, but we wouldn’t judge them as bad persons.

There are some actions that are so detrimental to society, like the killing of another, that judgment must be made and punishment mete out. Laws are enacted to enforce such cases. If you break the law, the fact remains that you broke the law, regardless of your reasons. But it’s not universal. You have civil law for murder (illegal killing). You have military law and international conventions governing war conduct to put limits on the amount of condoned killing by soldiers. Even more unclear, different societies have different ideas of what is illegal and what punishments are appropriate.

The Judging Paradox

Unfortunately, we humans have evolved to judge. We quickly judge if a situation or another person is dangerous or not. We decide to fight or flee. The decision is then automatically applied to future situations that are similar. It is a shortcut for our brains. In the past, when survival was more difficult, it saved our lives and the lives of our families and community countless times. In the present and future, it may cause more problems than it solves.

009ManMirrorI am not advocating getting rid of quick, automated judgments and decisions. If we had to think carefully when responding to each and every event that occurs, we would be so busy that we couldn’t think or do anything new. It is okay to have automated reactions, but the downside is that such reactions may not be appropriate and may even be damaging.

What I suggest we do is to become more conscious of when we may be blindly judging and to re-examine some of our decisions. For when we judge others, does the judgment not reflect on ourselves also?

Reframe, Reframe, And Keep Reframing

The best scenario is not to judge at all. We can try but it’s such a part of our human makeup that it would be impossible to do so all the time. When we have to judge, let us always ascribe the best motivations for actions that we can think of. More than likely, we will be wrong. But if we are going to be wrong, we might as well be wrong in the right way. Or at least, in a way which makes us feel good and helps us to react with our best selves.

I call the above method, to reframe. Our initial judgments will be driven by our emotions and we will reach the most negative conclusion about another’s intentions. We have to catch that initial judgment and reframe it by changing the conclusion to a positive one. For example, you are driving down the freeway and a car cuts in front of you. Heart beating, adrenaline pumping, and furious, you think, what a jerk, he’s doing it on purpose to piss me off, and I’m going to cut him off for revenge.

Quick, do a reframe! Force yourself to think, gosh, his wife’s pregnant, they need to get to the hospital, he’s unsettled and forgot to check his blind spot, and I had better back off because I don’t want to cause an accident on this most auspicious day. Calmed down and with a smile on your face, you immediately hit the brakes with great eagerness… and the car behind you rear-ends your car.

Ugh, ignore the last part. You get the idea. Reframe, reframe, and keep reframing until it becomes a habit. The trick is to catch yourself in the act of making a negative judgment and then to quickly reframe that judgment to a positive one. You will need to monitor your thoughts and feelings to do so. Check out my previous blog about monitoring and accepting thoughts and feelings.

Sometimes, another person’s action will affect you so strongly that you will not want to reframe. We can’t be saints all the time. To handle that, you will first need to acknowledge strongly how that action affects you emotionally, before doing a reframe. Doing so will defuse the negative emotion enough for you to do a reframe, which will then handle the remaining negative energy.

Going back to my earlier example of the party, you feel ignored or slighted because the neighbor did not spend much time talking to you. Express how that action affected you, “I am pissed off that she invited me and now is ignoring me. This is an insult!” Keep expressing how hurt you are until you can do a reframe. I like to think that we can always judge that the action is hurtful to us, but not that the person is a hurtful person.

In the End

With practice, over time, we will become less likely to judge others. We will be more likely to withhold our judgment and opinions. After all, isn’t being judgmental a lot of work? Evolution is not the best at reducing work. It just optimizes what is already there (judging) that works well enough. The more evolved method is to eliminate the work. Judging is extra work we don’t need.

Try your best to avoid judging people because we humans are so complex and messed up, that to get an accurate judgment of a person is beyond our abilities. If you catch yourself judging negatively, do a reframe. Don’t forget that this advice also applies to judging yourself. Treat yourself as well as you treat others. As Mother Teresa said, “… in the end, it is between you and God. It was never between you and them anyway.”

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