Quarterly Taxes

If you make quarterly tax payments, you have 2 weeks before the second payment toward your 2008 tax liability is due.

Most Americans are on someone else's payroll and their taxes are withheld from each paycheck.

Many individuals are either self employed or have variable incomes from which taxes are not withheld. To get their tax $ to Uncle Sam, they make "quarterly tax payments" on April 15, June 15, September 15, and January 15 (of the following year). If these dates fall on a weekend, the taxpayer has until the following Monday to postmark their tax payments.

Most states follow the same dates in regards to their state income tax payments.

Many tax preparers can help determine the amount that should be made each quarter or set up their clients with payments that will avoid penalties come next April. Should your income or investment income vary significantly during the year, call your tax adviser and talk it over with him or her.

It seems we need to have a calendar and calculator to satisfy the tax man besides the $.

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Garage Sale

We went to a friend's garage sale yesterday. Thursdays are big days in their community for yard sales.

We bought several items we didn't know we needed. A medium size cooler for $2 and a desk lamp for $2. Both useful items. A small clock radio for $1 which works great. A leather lady's wallet for $1 and a box of books including cookbooks for $5.

We probably picked up things we would not have purchased new but we saved $ on books we can read and pass on. The leather wallet will go on the shelf until my current one wears out so it is an investment of sorts. The clock radio is playing now but I had to place it across the room. It seemed to pick up interference from the computer.

I do not shop garages regularly but I knew the owner and felt good buying clean working things from her. There are many people who drive all over shopping other people's trash looking for treasures. With the price of gas, it sounds more expensive to hunt down savings.

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Coupon

How do you say it? Q-pon or KOO-pon? Webster's says either is correct.

Which ever way, using them saves $ and encourages competition between retailers. Some stores accept coupons from competitors. Most come with limited dates. I don't think using them because they are expiring should be the number one factor. Use them because you were planning the purchase anyway.

Another thing to keep in mind. You probably paid for the coupon. Either you purchased the newspaper or magazine or you spent your time and paper to print the coupon off the internet.

Which ever way. Q-pon or KOO-pon. Just use them wisely. Develop your own storage of them. I have a coupon wallet with divisions for paper products, dairy, cleaning, sauces, etc. I spend time about once a month going through each category and discarding the out of date coupons.

Bob is my coupon clipper. I file them. Together we remember to carry the wallet with us to the grocery store.

Keep clipping.

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The Bulk Way

We used to belong to Sam's Club. We have talked of joining Costco. The problem for us is buying in bulk. When our daughter was at home, the annual fee was easily worth the membership. We would buy a 3-bottle pack of shampoo and large boxes of sandwich bags.

We are not sure the member fee and driving the extra miles to get to the mega warehouse would be economically beneficial.

We do cook in bulk. I made stuffed peppers last night. I doubled the old recipe and made 10 halves. The two of us will enjoy them 3 nights in a row.

I also make meatloaf with 3.5 to 4 pounds of meat. These types of meals taste better the next night. The meatloaf can serve as lunch sandwiches too.

Sometimes, the bulk way is the savings way.

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Slashed Interest Rates

Since August the FOMC (Federal Open Market Committee) has lowered short term interest rates 6 times, from 5.25% to 2.25% in March. Is this good for everyone?

Smart Money magazine (May '08) has an article by Roger Lowenstein about this topic. He says the thought that lower short-term rates are better is simplistic and arguably wrong. "Many people facing resets on adjustable-rate mortgages will see less severe rate hikes. But for society lower rates are not an unmitigated blessing. People with money in the bank or investments in Treasury bills and other short-term securities will see their income reduced. Retirees and others on fixed incomes, such as pensions, will lose out."

He continues: "When Americans are discouraged from saving, they have only two alternatives. The first is to start spending. This is why lower rates lead to higher prices." I had to stop and think this through. I believe his point is supply and demand. More demand, prices can stay high or increase.

Continuing: "You can think of each rate cut as sending a palpable signal to every American: Live better! Spend more! Buy the extra sofa! More videogames! So what if you max out your credit cards and your home equity line as well? "

The other alternatives is: "people convert their dollars to another currency." The rate cuts signal that dollars are poor investments; try euros or yen instead. This is why the dollar has plunged to an all time low. Commodity producers are boosting prices to compensate for what they perceive to be shrinking dollar value. Gold is up, coal is up, wheat is up.

Mr. Lowenstein: "Will this translate to higher consumer prices? It already has. Inflation over the past 12 months has been clocked at a rather alarming 4.3 percent."

He concludes that cutting rates is not a clear problem solver. "But if carried to excess, the Fed's interest-rate medicine could inspire the fear of inflation and delay the onset of recovery. When investors fear inflation, they are reluctant to lend long term, driving bond rates higher. This is why long-term interest rates, including those on fixed mortgages, have stayed fast despite the Fed's best efforts to lower them. A bear market in bonds is a real possibility."

The economy is a complex animal. No one pill is the cure.

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Moment of Remembrance

Today we have set aside, this last Monday in May, as Memorial Day. It was originally May 30 but in the 1970s it was moved to make for a 3-day holiday weekend.

This afternoon at 3pm, we are to pause and in our own way remember those who have served our country. A moment of silence and prayer.

The remembering of fallen soldiers began after the Civil Way. By 1890 Memorial Day was recognized by all of the northern states. The South refused to acknowledge the day, honoring their dead on separate days until after World War I.

I found this quote on line: "Traditional observance of Memorial day has diminished over the years. Many Americans nowadays have forgotten the meaning and traditions of Memorial Day. At many cemeteries, the graves of the fallen are increasingly ignored, neglected. Most people no longer remember the proper flag etiquette for the day. While there are towns and cities that still hold Memorial Day parades, many have not held a parade in decades. Some people think the day is for honoring any and all dead, and not just those fallen in service to our country. "

Please join me at 3pm and take a moment to reflect and acknowledge.

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Congress Gets Answers

On April 1, 2008 oil execs were called in front of Congress and drilled regarding oil prices.

The oil heads reminded us that the US is dependent on foreign oil. Things would be different if we drilled our own resources. The foreign market sets the price of crude. They made it sound like foreign countries and companies hold monopolies and our hands are tied. They called for permission to drill US oil.

May 21, 2008 five execs of oil companies sat before Congress. They were condemned for their salaries. Three of the five said their compensation was public record. The other two said their personal compensations were not the top amounts in their companies and were not public record.

They were harassed about their salary amounts and the audience laughed.

These men answer not to Congress for their salaries but to stockholders. Let me remind you that if you own mutual funds, you likely own some big oil stock. These men and their companies' profits affect your own income and wealth.

Also, the sales tax levied on gas at the pump is based on a percentage. Many states are enjoying the inflow of $ due to the higher price of gas. So many states have been threatening to raise income tax rates to cover their deficits. The sales tax on $4.09 per gallon is much more than on $2.30 per gallon.

One more thing about big oil. Their overall margin of profit is less than 8.5%. Please consider that this margin is relatively small. Many industries work within margins at 10% and greater.

If the salaries and compensation of these 5 gentlemen were not awarded them, the affect on the price per gallon at the pump would be changed by $.00001 per gallon.

Let's hold off executing the leaders of an industry and shine the mirror on our Congress. Untie the hands of this industry and allow drilling at home. Now.

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Conservative Black?

Are there conservative Blacks in America?

How can there be? Everyone knows that the Republicans are the racists and want to keep African Americans in their place. Right?

How did history get rewritten? How come the Dems are the party of equal rights?

Doctor Martin Luther King was a registered Republican.

The fight to integrate schools began under Kennedy, right? Wrong. In 1957 in Little Rock under the Eisenhower administration.

Lincoln was a Republican.

Al Gore father was a senator that fought diligently against the Equal Rights amendment.

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Fresh, Really Fresh

We're upon the holiday weekend. It's time for gardeners to have their plots turned and plantings started. Talk about savings.

For the price of a few spindly tomato plants and some packets of seeds, a harvest of fresh veggies.

Plant now for treats in late summer and fall. Squash, peppers, carrots, eggplant, green beans. Fresh from the back yard. If you can or freeze, your labor will be enjoyed for months and months. You will thank yourself for the hard work and $ spent now.

It's like that with savings. Hard work now and $ taken from spending to savings. The bounty will only be there if you put in the work now.

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Let's Sue 'Em

Fox News reported: "The House voted Tuesday to let the Justice Department pursue energy antitrust and price fixing cases against members of the OPEC oil cartel, although critics said such attempts would likely be fruitless and could prompt a backlash from oil producers." We are suing the big oil controllers.

So the mighty Senate of the United States is suing OPEC so we can have lower gas prices! Are they kidding?

Is this just so they are doing something to help us?

Have any of them considered allowing us (we the people) to use our own resources and drill for our own oil? We the people would like to use our own stuff and be less dependent on the Arabs and others.

Let us drill in Alaska. Tell the conservationists that this place is tundra. There are no trees for 750 miles and very little living species. Let us drill off shore. The Gulf of Mexico is currently tapped by other countries. Why not us?

When Hurricane Katrina hit, not one drop of oil escaped to damage the environment.

Let us drill our own. Stop wasting efforts suing OPEC. Let's get real about this. Let us open our own resources.

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Mud Is Out

The mud is out. The slinging has commenced.

While Hillary is winding down to her D day, the boys are throwing the nasty mud.

For some unexplained reason, Mrs. Obama is off limits. Where have those people been living? Once Michelle stepped on stage on her husband's campaign, she placed herself in the cross hairs.

I have noticed though the press has looked the other way, especially CNN, on her new found pride in America, etc.

McCain has pronounced that President Obama will rush to meet with Fidel's brother in Cuba. B. Husein has corrected this. He will not do this first after elected.

George W. tells Israel that there is no negotiating with Islamic terrorists and Obama takes it personally. Isn't that interesting. He was offended. Maybe the spot light on his naivety in appeasing his former clan hurts.

It will be a long road to November. Hang on.

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Digging Up Savings

I pulled up some hostas in our yard yesterday. It would have been easier about a month ago before their leaves were completely out.

Hostas love shade or partial sun. They come in many sizes and colors. The yellow or gold ones can handle more sun. The deep blue-green leaved ones prefer little or no sun. Some have variegated leaves and some have crinkled edges. They do send up taller stems with little flowers but they are not significant.

Hostas are great to fill corners in landscape like under trees or between bushes. In the back yard we have a corner that is shaded by a large maple tree and the house. The soil is not rich. Our "blues" love it there.

Rather than buying new plants, consider learning about propagating your own. The hostas are simple. When the leaf "fingers" are a few inches tall, dig the entire clump out. Be careful to dig deep enough to capture most of the roots. With a clean sharp knife, cut the clump into thirds or fourths so that the smaller clumps have leaves and roots in tact.

Plant these new clumps where you want them and where they will have similar light exposure as in their original place. You can return one clump to the home hole and even share the smaller clumps with friends or neighbors.

Remember to work the soil before transplanting and water well. The plants will go through a shock reaction but they will be happy to have more leg room. I have heard that similar dividing can be done on day lilies. Research more on line or visit a nursery for tips.

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Being Carded

A recent Money Magazine article caught my attention. It's about being carded when you use a credit card. The cashier may ask to see your ID as a way to curb fraud losses.

The author reminded me that by surrendering not only my credit card number I would be providing my driver's license information, address, age, and other statistics. In the least, the retailer may use it to place me on their mailing list.

Showing ID does nothing for the purchaser as most major credit card companies protect the holder from fraud liabilities.

MasterCard, Visa and Discover forbid stores from requiring ID when a signed card is presented. American Express discourages the practice. Let the clerk now this should you be asked.

If the store insists, the author suggests a phone call to the credit card company may help or a complaint against the store may be filed. "Rogue merchants can be fined or suspended."

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Fixed Not Enough

With all the interest cuts the Feds have made since last summer, we are really feeling it.

I understand the rates were cut for a few reasons including inflation and fear of recession. The pain is felt in bank savings and money market funds and bonds. To find the balance, many in retirement are hurting. They rely on their bank savings, CDs, and other fixed income investments.

With the large decreases in the prime rate, retirees loose out on the fixed $ they count on.

Our money market fund was paying just under 5% a year ago and now is paying less than 2%. It's making less than half what it was.

We live in the western suburbs of Chicago. Our real estate taxes went up again. They usually do. We know they are headed much higher over the next few years due to high school expansions and upgrades.

Our neighbors on fixed incomes do not have fixed expenses. With gas and groceries rising and property taxes fixing to take a big step up, the crush hits the elderly first and hardest.

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Gently Used

Garage sales are good hunting grounds for bargains.

A friend who is pregnant found a Bjorn baby holder. The kind used to strap a very young baby snugly against your chest. They are great for outings like a walk or a picnic where a stroller is either not welcome or difficult to maneuver.

This sturdy harness costs over $75 new. She found hers in perfect condition for $12. They are completely washable. The garage owner gave her a quick overview of the closures and adjustments.

Granted, you have to travel up many driveways to find that treasure that is currently some one's trash. But a $63 savings can be right in your neighborhood.

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IRS Has Problem

The IRS was quoted as saying they knew there was a problem.

It seems some stimulus checks were mailed to the wrong people. Not that they were not expecting or "deserving" of the $ but they were made out to someone else with that person's social security number.

The recipients have not gotten through to the government to find out what to do with these checks. It seems their system has been so overwhelmed that callers are lost in a maze of "choices" that never ends with a human voice.

So they have checks they can not cash and someone else has their social security number and full name. Talk about a security breech.

Our stimulus $ was a direct deposit and our mail acknowledgement was correct.

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Hare v Tortoise

The tortoise in the story wins the race with slow steady steps.

So is the story I read recently about a man in New Mexico. He is retired with savings exceeding $650,000.

Joe saved through his employer's plan which preceded the company's 401(k) plan. He started in his mid-30s with 1% of his salary ($15/week). He invested each and every bonus and increase in salary. That's right. He was committed to living below his income and saving the rest.

Joe placed his saved income in one stock fund. He rode out the one-day 23% plunge in October of 1987. Along the way he read books and visited the mutual fund website.

He diversified and kept to a 70%/30% stock/bond allocation. Joe took an early retirement and now holds a 60%/40% balance.

A true success story.

There are 3 things you can do with earnings. Spend it, save it, give it.

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Lapel Pin

Now we see President Obama move more central. He's wearing his flag pin again. He's trying to appeal to the white middle class.

He's probably also trying to cover up his faux pax regarding the 57 states of Islam. I know he meant the 50 states of the US but that is not what he said with great clarity and confidence.

Obama is as liberal as possible. His views, what little we can gather as there's little track record available, border on socialism.

Let us not loose our freedom. Let us not be duped. Let us pray for Obama and that our eyes will be open.

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Social Security

Bob received his annual report from the Social Security Administration.

Bob will soon be 59. The report shows the monthly expected Social Security check if he should take it at 62, three years from now. It also gives the amount at 65 and at 70.

I'm not sure how to decide when to take Social Security. I have several questions like can he continue to work and get a SS check? How does one make a wise decision between 65 and 70.

It probably depends on expected life expectancy. Bob's dad died in 1990 at 73 and his mother in 1998 at 81. His brother died in 2004 at 59. I don't think we can determine much based on these numbers.

Meanwhile, he'll keep doing what he's doing as long as he enjoys it. Since he works for himself, it's an easy thing. He can always take on less projects.

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Postal Increase

Another penny per stamp beginning today. What was $.41 is not $.42. Big deal. One more cent.

Last May we had a 2 cent increase. The year before that (January 2006) it was also a 2 cent increase.

In the last ten years, a postage stamp has increased over 30%!

If the trend continues, a stamp will cost you $.55 by 2018. I would venture it will be more than that with gas prices so high. In fact, the next stamp increase may happen before another year has passed.

We pay some bills on line. We pay our credit card and our municipal utilities. I wish more companies would allow directed electronic payments. I am not yet convinced to allow automatic withdrawals and I do not want to pay for bill paying services.

I know gas prices are affecting personal usage. Maybe postal increases will affect my bill paying alternatives.

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Burlington

In the past 2 weeks I've been told stories of great savings at Burlington Coat Factory.

Winter before last, I found a great winter coat at BCF. It's a London Fog and has been a great coat. It's washable and classic.

Two weeks ago, a young couple expecting their first child found the nursery bedding set they wanted at BCF. They had shopped at Babies R Us and on line. The choice set was $30 less at Burlington.

Last evening, a niece was talking about her great savings when shopping for a baby shower gift at Burlington. Several of us agreed that the store is a bit messy and confusing. There is much to sort through to find the gems.

Often, the time spent searching out treasures is a wonderful $ saver.

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Electronics

Automation. Computer driver robotic workers. Humans replaced.

Bob generally refuses to use the self checkout lanes at the store, especially the grocery store. He knows it eliminates the need for living cashiers.

There’s one automation in our life we use. Electronic toll taking systems.

For several years Illinois has had I-pass. We have a mounted transponder on the inside windshield. We zip through toll booths, barely slowing at all.

Recently, in the last 3 years, Illinois has raised the rates of the manual or cash toll lanes. What cost $.40 is now $.80. Doubled. The exception is the I-pass users who are charged the old rate. That is incentive. In fact, the I-pass lanes around Chicago are all at regular speed, no slowing.

Our credit card is tied to the transponder. The system hits our credit card $40 as needed and subtracts usages.

We discovered that the Indiana toll road accepts our I-pass. Their rates increased the beginning of April. However, using I-pass the rates are the old ones. From the west end to the Sturgis/Howe exit used to cost $3.05 and still does for I-pass or EZ pass or I-zoom. But the ticket takers and cash payers now dole out $5 for the same drive.

Automation can equal $ saving.

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It's Here!

It's here! The stimulus $ just hit our bank account!

We can pay our Visa bill. We are on our way to our first real estate tax payment which is due June 1. We can order our boat serviced and delivered. We can start a college fund for our grandchild. We can give it to a charity. We can get our landscape refreshed professionally.

We can save it.

What about you? Do you have a plan or are you waiting to have the $ in hand?

I read in the local paper the story of a man who lost his job in 2007 and took a chunk of his 401(k) to cover education expenses. Just as his training finished and he landed a better job, he did his taxes.

The early retirement withdrawal was not only taxable but also carried penalties. His tax return showed the most income he has ever had.

Last week he got his stimulus $. The $8.40 won't go far.

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Flashback

It was a flashback to the late '70s. A gas line! Traffic created 2 lines that snaked onto a small side street in Portland, Indiana.

As I pulled out of the parking lot south of the corner, I saw the reason. $3.55/gallon! My tank was nearly full. Otherwise, I might have joined in the "reunion."

I told Bob about it after he finished his job. We drove by the corner on our way to dinner. No lights. Closed so early?

Ah. Just like back under President Carter, gas station ran out of gas.

We left town without checking to see what new price was listed and if a tanker had made a delivery.

Memories.

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When Someone Else Buys

When someone else is buying, it's free and why not have caviar?

In the case of higher education, the principle holds. Financial Aid, the $ paid as scholarships and grants that are not loans, have contributed to the increase in higher education costs.

This idea is not mine alone. It is well presented in a book by Richard Vedder entitled "Going Broke by Degree: Why College Costs Too Much."

Per Andrea Neal, as read in the Fort Wayne Journal Gazette, The US Commission on the Future of Higher Education reached two conclusions in 2006. College costs more due to a financing system that provides limited incentives to take aggressive steps to improve efficiency and productivity; and the aid system is complex, inefficient, and often does not direct $ to students who truly need it.

Aid is used to attract to campus the brightest students which works against the goal to attract the neediest students. In Indiana 70% of awarded aid in '05-'06 went for merit and not need.

The author Vedder suggests eliminating the tax funded aid. There are discussions underway to make the system accountable, to assure $ goes to the poorest student, and to require colleges to cut costs that consumers would demand if they themselves were paying the sticker price.

Indiana has formed groups who are studying changes. One idea would be to stop using the Federal formula and possibly limit the eligibility factor to two: family income and family size. The task is to eliminate the inflationary effects caused by third party payers.

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Indiana's Turn

Bob and I are working in Indiana this week. The TV and radio programs are crammed with commercials. Hillary is pushing her idea to discontinue the Federal gas tax for the summer because she "gets it."

President Obama claims that's only a quick fix and the problem needs long term thinking.

These are repeated over and over and over. Now, the local radio station is offering reports from poling places. People are calling in with their impressions of turn outs. Also, repeated traffic reports than may affect things.

How long has it been since Indiana had much of a voice in any election outside the state? People are charged up. We know the airwaves will be full of results beginning about 5PM.

The entire nation is watching Indiana and North Carolina. This could be the end of Hillary's run. It could make things more difficult for Obama. Will the Dems finally have their candidate locked in? Or will the fight continue?

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Obama is Right?

I agree that removing the Federal gas tax for 2 or 3 months will not solve the bigger problem. I realize a break from it would help families enjoy summer trips or help with gas expense in general.

However, at what cost? The Federal gas tax goes primarily for road maintenance, bridge repairs, traffic flow improvements, etc. These projects are important to the bigger picture, to enterprise and business.

Obama's comments made sense but I do not believe he has endorsed or worked toward the plan President Bush has been pushing for a few years. He has asked for alternative, innovative changes to how we propel our cars. He has asked for drilling our own resources. He has asked for increase nuclear power facilities. He has asked for more refining facilities.

All these things have fallen on deaf ears in Congress. How can Hillary point fingers at the administration? Because, it's easier than holding up a mirror.

Most of the chatter and promises are just empty political ploys.

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Optimism

One of my regular financial radio voices is Adam Bold on Saturday mornings. He's on 69 stations coast to coast. He also has a PBS television show - Your Investment Show. I could only find it on the web.

He spoke yesterday about what we know now that we didn't know back in August and January and even March.

We are not in a recession as the GDP was a positive number. The stock market has acted positively the last four weeks.

Oil may have found its top price. It's becoming evident that at gasoline prices near $4/gallon, Americans are changing their driving habits. Adam suggested oil will decrease toward $80-$85/barrel.

Stimulus checks are due out soon. The Reserve has cut rates 4% since August. They have signaled no more cuts ahead.

Most of the fallout from the sub-prime mortgage mess has come to light. It began back on August 8. In fact, he says indications are that home sales have neared their bottom and the numbers are stable.

We have the certainty of knowing one of the major candidates in the fall.

All these things are positive and Adam is quite optimistic.

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Gas Tax

It seems most states collect a gasoline tax based on a percentage of sale but the federal gas tax is a set $ amount per gallon. I found an informative article, History of the Gasoline Tax, written by Dr. Buechner.

"From 1932, when Congress first enacted an excise tax on gasoline, until 1956, the proceeds of the gas tax went into general revenues, although the amount raised each year was used as an informal benchmark for Federal highway spending. The Federal-Aid Highway Act of 1956 established the Highway Trust Fund and stipulated that 100% of the gas tax be deposited into the fund. From 1956 to 1982, the Highway Trust Fund was used solely to finance expenditures from the federal highway program.
Highway Trust Fund revenues were first allocated to mass transit in the Surface Transportation Act of 1982, when Congress raised the gas tax from four cents per gallon to nine cents per gallon and dedicated one cent, or 20 percent, of the increase to the newly-established Mass Transit Account. Each time there has been an increase in the amount of gas tax going into the Highway Trust Fund—1990, 1993 and 1997—20 percent of the increase has been allocated to the Transit Account and 80 percent to the Highway Account. Of the current gasoline tax of 18.3 cents per gallon, 2.86 cents per gallon is allocated to the Mass Transit Account."

I was thinking the Fed tax was a percentage rate and it could be lowered as a % of a larger amount yields a larger amount. But, since it is a set $ per gallon, the revenues from this tax will go down as folks drive less.

Maybe the Dems are just blowing smoke to get votes. Real answers include drilling our own resources now.

Hillary was quoted as saying President Bush is to blame as he has let oil prices increase from $20 to $120 per barrel. I would ask, what has she been smoking?

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May Day

Many years ago Bob and I enjoyed the May Day celebration in Daly Plaza in Chicago. The native dress and may poles were the aftermath of the big parade. This year the parade will be tomorrow.

I doubt if this May Day celebration will get near the coverage as the parades and rallies held across the country for immigrant rights yesterday.

May Day is a Polish holiday. Most of the Poles celebrating back in 1976 were immigrants. They had the rights to a public parade and display.

Yesterday's events were about immigrant rights and foreign flags, foreign language, and demands of the illegal immigrants. The illegal is a criminal. Most law breakers have few rights.

There are millions of Latinos here legally along with Poles, Greeks, Germans, Indians, Canadians, Brazilians, etc.

My mother-in-law's father came here legally from England. We have read the records from Ellis Island from early last century. Edgar was detained, recorded, his health observed, his $ was accounted for, and his sponsor was checked out. His story is like so many others who came legally. Then only as citizens did they enjoy the full rights of being here.

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One Step

Are you one misstep from financial crisis?

A friend just received a bill from the hospital for tests run. The $1,200 owed the hospital could put many folks into a tail spin.

Right now, it will match up with many of the stimulus checks folks are counting on. However, this amount could be the last straw.

My friend will be fine. He has 6 months of expenses tucked away for emergencies like this and can cover this amount. I advised he keep close track of all his medical bills for 2008. This may be the year his qualifying medical expenses exceed 7.5% of his AGI (adjusted gross income) and are deductible.

Good news. My friend is doing fine.

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