Several comments have mentioned how cheap a blender is, and implied that Trent is being cheap by not getting a new one. The thing you have to keep in mind, though, is that Trent most likely isn’t replacing this with a $30 blender from Target. Based on his other purchases I would assume that Trent is looking for a higher quality blender, which from what I tell could easily cost $100-$150. I have no idea how much he’ll end up saving by shopping around and waiting for a good deal, but its not hard to imagine it could be quite a bit.

The example I can give that I do know about is a mixer. If Trent said that his mixer was starting to need replaced, it would be easy to say he should just do it. Afterall, one can buy a cheap hand-mixer for $15. If, however, Trent is looking to get a Kitchen aid stand-mixer, he would be looking a price tag of something like $229, if he just ran out and bought one. It is very possible, however, to find these for $129 or even for $99 by waiting for sales and shopping around. I know, because my wife has bought two, one for herself and another for my Mom. This is an example of where waiting, as Trent is doing with the blender, could save a hundred dollars or more.

My point is that even if he only saves $20 or $30 on the blender, chances are good that the process itself saves Trent a significant amount over time. If it allows him to buy high-quality, long lasting equipment while still saving money, then I think its a good method. As Trent has said in the past, its these small decisions that add up to big savings.

However, if you talk with the IRS and explain the situation, they are likely to work with you on a payment plan. Even if they don’t, if your credit is good, you may be able to get a low interest rate loan from the bank, pay off the tax debt, and work on the loan repayment in installments rather than in a chunk.

Now, to make a handle for it, take a plastic cup and cut several crenellations or slots on the edge of it. Or, just drill some holes near the lip of the cup. (to allow the air pressure to vent). Hold this, inverted, over the vent holes of the plate to hold the plate down over the blender jar when you are using the plate as a cover.

There. you are good to go. You’ll have to hold the top down with the inverted cup, but it will work, it will be very safe, and it will allow excess pressure to safely vent through the slots in the base of the cup that you are using as a handle.

there are lots of ways.

The IRS wants the money, they don’t want to spend money paying for a jail cell.

It is true that as you take care of the big stuff, the return on your effort decreases. I’m just not convinced that you’re all the way there yet. It doesn’t take any more time to track ALL of your spending than it does to track some of it.

Any plastic item with a crack in it (say, a rubbermaid container) can be salvaged this way. First, stop the crack by drilling out the leading edge of the crack, which will stop it from lengthening, then reinforce the container using tape or some other method, depending on your needs. Other methods might be fiberglass mat and two part epoxy, or (low temp) hot glue and fiberglass mat.

If it’s a glass container with a crack in it, you won’t be able to drill it out (I don’t think) but, wrapping it in tape will prevent it dis-assembling on you during use and keep it safe.

That being said, I’m pretty sure that anyone with cracked blender container knows how to compensate for it safely.

I basically agree, with the following caveat: the IRS will get all their money, eventually. It’s just better to do it on mutually agreed upon terms by coming forward yourself than doing it on their terms when they discover you’ve broken the law by not filing.

You also need to be very careful what you say to the IRS. You should say, if asked, that you got very busy and forgot to file. You should never say that you knew you were supposed to file and intentionally didn’t file, or anything that could be construed to mean that. Failing to file by decision of your own (“i knew i was supposed to file, but it just wasn’t convenient so I didn’t”) is considered a felony and my understanding is that an IRS agent is literally duty bound to prosecute if something like that comes out of your mouth. A plea of disorganizion is acceptable to the IRS (I was moving back and forth and must have forgotten to file) because it does not display intent to defraud the government of tax revenues, whereas mindful lack of filing does display intent to defraud the government.

There is a number of books about dealing with the IRS that someone should read before dealing with them directly. And, in this case, it would perhaps be best to use a paid preparer or tax accountant to be the intermediary to avoid the possibility of incriminating yourself. Books to read include “What the IRS Doesn’t Want You to Know”.

You guys do want to pay this off as soon as possible, because there’s both a late filing fee AND a monthly interest penalty on outstanding unpaid federal taxes. But you don’t want to tap out all your funds immediately, so file all three years and apply with the IRS for a payment plan.

@Q9, it sounds to me like you are whining. My only serious suggestion is to think, really, really, think, about what it might be like to be really poor, not just grad-school poor. Read some news clips about people who live on $1.50 per day or less in, say, a country in Africa. Or, closer to home, what it would be like to be homeless and, say, metally ill in this country. Then compare those situations to what you have right now. I’m serious. Your current life is actually an adventure in which you have a lot of options and all of your real needs can be taken care of, but you don’t even realize it because you are fixated on “eating out”.

I’m Canadian, so take this with a grain of salt. But if my understanding of US income tax filing is correct (and it comes from listening to Dave Ramsey podcasts), filing taxes is not optional. It’s not a choice you get to make. It’s not something you can decide to hold off for a year, then do it next year and just pay a little back interest.

It’s ILLEGAL. It’s literally a criminal offense to not file your taxes.

You can file and owe and not pay, and they can come after your assets, but they can’t put you in jail – as long as you FILED. But if you DON’T file at all, THAT IS a criminal offense, and you CAN go to jail for that.

Again, I’m not a lawyer, but I’d seriously look into that aspect of it before choosing to not file. It’s like choosing to rob a bank or choosing to commit fraud. It may be a smart financial move, but it’s not a serious option.

I don’t know why readers keep sending him such questions. The IRS offers its publications on all these issues online, and the tax prepartion websites also offer outstanding FAQ pages that clearly answer these questions.

As for Q5, why is the mother borrowing from her 401(k)? If that is for the down payment, and her rental property would be 100% financed, there is a risk that an unexpected life event could put the mother in a really tough spot: Unemployed, possibly due to a disability or illness, forced to pay back the 401(k) loan or take a tax hit, and forced to sell a property with no equity. She really needs to study this issue better.

If you leave it as a nondeductible contribution it will add some complexity to your tax returns. You will have to track that basis until you completely liquidate all of your IRA’s and file the form 8606 every year you take a distribution from IRA’s for the rest of your life.

In my eyes saving the trouble of that is well worth the effort now. Unless, of course, you already have after tax income (basis) in your traditional IRA.

Excitement normally goes hand in hand with unknown risk with the hope of a large payout at the end ie gambling.

I don’t live in the US but to me it sounds like your Mum needs to do a little more research find out things like:
~ Yearly maintenance costs (I’d imagine external wear and tear in a desert region will be higher)
~ Avg vacancy rates in the area
~ potential economic impacts in the future (ie a factory closing down)
~ Tax advantages/disadvantages
~ Potential over saturation of the market with rental properties

Lastly and most importantly if “everyone” is jumping into this area as it’s the current big thing she should probably look elsewhere, normally in financial stuff you don’t want to follow the crowd as the crowd will have already artificially inflated things like sale prices etc in that area be it property/stocks or some other investment opportunity.

Good Luck :)

If, as she says, she managed to save up an $11K emergency fund in just one year, that sounds pretty good. And if that’s not the entirety of the household savings (say, if she’s also putting money in retirement accounts, or if her husband is also saving money in separate accounts), that’s even better.

From the way she talks about the house, it sounds like they’re in no particular hurry to buy a home. If that’s the case, then sacrificing things that they really want (like the London trip) for the sake of buying a home a little bit sooner would be foolish, in my opinion.

What would I do if I were Yancey? First, leave the $11K alone, and keep adding to it, until/unless I need it for an emergency. Second, make sure I’m putting 10% of my income, minimum, into some sort of retirement account. Third, stay the heck away from precious-metal investing. Finally, take the London trip and have the time of my life!

Actually, you can use anything around the kitchen that fits over the top, but you’d have to hold it on. But if I were Sarah (who apparently likes smoothies, based on an earlier post), I’d be stopping by a store on the way home to get a new one.

Q5 Charlie: Your mom’s situation might work fine. $1600 rent for a property that costs ‘low $100K’ range is pretty good generally. I would make sure she figures all the costs realistically. What about all the other costs? How much does property tax, insurance, HOA, etc cost? Is the property near by or out of state? If it is far away then being a long distance landlord is a recipe for disaster.

Q10 Stan : Call Vanguard and see what they can do for you to recharacterize that IRA NOW.