Don't Mess With Taxes

Have you heard of heard of the Rule of 72?

It's a formula that will tell you how long it will take to double your money. And you don't even need an advanced degree from MIT to understand it (although these Money Chimp calculators do help those of us who can't do math in our heads).

Here's how it works: Divide 72 by the interest rate you're getting for your money and the result is the number of years until you're twice as rich. As another Texan once said, "It's just that simple."

It's also just that distressing, considering the minimal rates of return most of us have been getting on our savings the last few years. The yin and yang of rates is that while low is good for borrowing, either via loan or on credit cards, it's horrible for savings.

Take, for example, the 2.72 percent the hubby and I are getting on a CD that, thankfully, is about to mature. If we were stuck forever with this paltry rate, it would take more than 26 years to double our money. (In our defense, it was a short-term CD while we investigated other, more lucrative, places to put the cash.)

The tiny amount of interest earned last year on the CD would just about cover the recent appliance repair call we had to make. Luckily, however, we didn't actually need the cash to take care of our broken dishwasher. When we bought the place last summer, we also got a home buyer warranty that pays for a year of work (less a per-repair service call) on most of the residential equipment.

Of course, that brings us to another rule: The Rule of Two. Basically, this is the rule that says in order to get any repair done properly, it must be done two times.

Sometimes the Rule of Two occurs because of an initial nonrepair, like when you call the cable guy and he finally shows up and the problem you reported is no longer evident. Fifteen minutes after he leaves, the video glitch reappears, so you have to call and set up a second appointment because the main office can't just radio the technician and have him turn around. (I've taken to taping the errant signal so I can at least prove that it once existed.)

Most of the time, though, the Rule of Two takes over when you think -- hope -- you've had the problem remedied. Like those times when that damn "check engine" light comes on the day after you paid the mechanic $700 to make it (only briefly) go away.

Well, we are now in the midst of the Rule of Two in trying to get our dishwasher fixed.

Last week, I made the first call to the warranty company, which called an appliance service, which promptly sent out a technician. So far so good. Until we used the machine the day after the repair.

Yep. Same problem. Time to call to have the repair repaired.

At least with this latest call to the warranty company, I got some small consolation in discovering that we're not the only ones dealing with the Rule of Two. The company's automated phone directory told me, "If you’re calling about a new problem, press 1. If you’re calling because the problem still exists after a service call, press 2."

I didn't wait for the rest of the menu. I had the instruction I needed. Plus, I was afraid that the electronic voice might tell me, "If dozens of our contractors have done shoddy work and you’re still waiting to get your original problem fixed, dial 99."

No, I just wanted to cling to the hope that take two is all we'll need. I'm keeping my fingers crossed. This second guy actually ordered a new part instead of trying to jerry-rig a repair a la his predecessor.

When we get enough dirty dishes to justify running the machine again, we'll see if the issue ends with the Rule of Two. Or whether we'll discover that an even more annoying Rule of Three (or more) exists.

Tax double take: Doing a task twice isn't always a bad thing. Take taxes. Sure you want to get the dreaded filing job over with as soon as possible. But being in too big a hurry can be costly. Even when your return is relatively simple, it's easy to overlook something.

So here's a two-step filing recommendation. Complete your 1040 and all the other accompanying forms and schedules, but don't sign, seal and send them. Let 'em sit for a day.

Yeah, that's hard to do, especially if you're getting a refund; you want that money yesterday.

But if you get a little distance from your return and then come back and check, your fresh eyes can help guarantee that you have done everything properly. Who knows, your second look might even turn up something you forgot the first time around that could get you a bigger check from the IRS.

You go, Mr. Wick! Craig Ferguson, host of the The Late, Late Show, film star, director and screenwriter, novelist and portrayer of Nigel Wick, the deliciously degenerate boss on The Drew Carey Show, interviewed Survivor host Jeff Probst this early morning. The topic of Richard Hatch's tax evasion trial naturally came up.

Probst opined that the sentence Hatch could face seems kind of harsh, considering that other people commit more egregious crimes.

Ferguson quickly called him on that argument: "You've got to pay your taxes. You're part of something bigger and it's not fair to all of those who do pay."

With such insight, if Ferguson ever wants to take the U.S. citizenship test, he'll definitely ace it. But even if he's officially an American, I hope he never, ever loses that wonderful Scottish burr.

Addendum: This post was selected Feb. 19 for inclusion in the Carnival of Investing #10.