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School’s Out! (briefly…)

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Yay! It’s spring break! One of the little blandishments of teaching that I’d forgotten about, it having disappeared in a fog of 9-to-5 overwork quite some time ago.

Mountain Laurel in bloom

Remembering it, however, after Departmental Chair kindly gave me three sections to plan for this semester, I set things up so that no student papers would sit on my desk and demand to be read over this lovely 70-degree week. The last raft came in on Wednesday, and I finished reading them and posting grades around 10:30 Thursday night. So…we’re looking at a whole week with no work!

The weather’s incredible and a mountain of household, yard, and computer chores have backed up and demand to be done. So there’ll be plenty to keep me busy over the next seven days. The question, however, is how idleness will play out not now but over the summer, when the community college hires no adjuncts (the plummy summer jobs go to full-timers) and even if they did, Social Security prohibits me from earning any more than a few classes in the spring and fall will pay.

Even though we didn’t work much around the editorial office during the summer, we were employed and I did have to traipse out to the campus several times a week. A lot of that traipsing amounted to time-wasting, but it did at least occupy time, if fruitlessly. Before I took on the administrative job, I always used to teach during the summer. Full-time faculty members earn a percentage of their salary for each summer course, amounting to a nice slab of cash—far more than adjuncts are paid for the same work. It was enough to fund a vacation, if I wanted to travel somewhere, or (more to the point) to cover some new improvement or purchase for the house. That’s where the dollars came from, for example, to buy things like the gorgeous sidebar from Crate & Barrel and the leather sofa and chair in the living room.

Next year, when I can earn as much as anyone will pay me, I may ask for a section or two at the West campus, which pays almost a thousand dollars more than the junior colleges pay. Probably to no avail: the university is hemorrhaging students as it raises tuition and fees while cutting services. The community colleges’ summer enrollment, we were recently told, jumped 17 percent over last year’s, which itself showed a significant rise. Thus it’s unlikely the university will have any summer sections to farm out to adjunct faculty…particularly since the Board of Regents just announced that, as a sop to students and parents enraged by the latest 20 percent (!!) tuition hike, they’re cutting university employees’ salaries by 2.75 percent. To make up for it, everyone will be trying to teach a summer section, and of course there will be far fewer sections to go around.

Mwa ha ha! How glad am I that I’m not working there anymore? Let me count the gladnesses…

At any rate, back on topic after that digression: What to do this summer? I’ve never had an entire summer break with nothing to do—even as a student, I went to summer school. Adding to the problem is that summer weather here is as oppressive as an Upper Peninsula winter. Instead of getting snowbound, though, people get heat-bound: it’s so excruciatingly hot you just don’t want to stick your nose out of the refrigerated cube that is your house.

I’ve thought about shutting the place down and going somewhere else over the summer. In 118-degree heat, it costs so much to run the air-conditioning and water that the cost of decamping to Yarnell probably wouldn’t be that much more than staying here. The problem is, though, that when you have a pool and a bunch of trees and plants, you can’t just shut the place down and walk away. In the summertime, when monsoon winds fill the chlorinated puddle with debris from the devil-pod tree and from every palm tree for miles around, you have to be here to clean the damn thing every day. And anything in a pot that’s not watered first thing each morning is fried by noon.

Back in the day when I was married to the globe-trotting lawyer, never once did we leave town but what we came home to some baroque new mess, crisis, or catastrophe. Yea verily, even before we owned a house with a pool, going out of town simply dictated that some fiasco would happen when we were gone. Dead cats, fires, thieving house-sitters, house-sitter killing himself and three young women in a drunken car crash, painter painting the black cat white, father doing battle with house-sitter’s wannabe burglar boyfriend, dogs retrieved from the kennel sick, ohhhhh god. I got to the point where I just. did. not. want. to. leave. town.

So. My enthusiasm for batting around the countryside all summer is about nil. Some things are worse than being hot.

This leaves: what to do next summer?

One possibility is to try to wring a book out of Funny about Money. I think there’s more than enough copy to pull together something coherent. If I finish off the “Financial Freedom” series before the semester ends, that can be the core of the thing. Anything that’s vaguely related can serve as support material, and a few entertaining irrelevancies can be thrown in as frills and flounces.

The question remains, though, whether I can sell something that’s already been done. Too many PF bloggers have already taken their (somewhat hackneyed) advice to press. Who is gunna buy a FaM book and how much are they gunna pay up front? I suppose I could go back to William Morrow. But both my agent and my editor there are long gone. No one at that house knows me anymore. And my inclination to seek out another literary agent is about as lively as my inclination to pack up and leave town for the summer.

The ancient book published through Columbia is still selling, though weakly…I might be able to persuade someone there to buy a FaM spin-off. It’s not very academic, though. On the other hand, in these times university presses need to stock their lists with at least a few items that will sell. The recession could work in my favor there.

Another possibility is to try to write a detective novel and peddle it to my favorite client, Poisoned Pen Press. These things are such a hoot! And I know I can write the stuff. I’ve done two novels, neither of which I’ve tried to publish. Though they are unpublishable, they did provide plenty of practice building characters, plots, and scenes. One of them, IMHO, is pretty damned good—certainly better written than some of the stuff I’m seeing.

PPP’s advances are very low: from what I understand, only about $1,000. The way you make money off the things is to get out there and peddle them yourself. Obviously, if I’m teaching classes every day I’m not going to have time to junket around the country signing books and schmoozing with bookstore buyers.

Still, in a Bumhood setting, where we see that we really don’t need extravagant amounts of cash to live quite comfortably, a thousand bucks of money happening is, well—not unacceptable.

Speaking of PPP, just now I’m reading a wonderful thing by a writer named Judy Clemens, The Grim Reaper’s Dance. It’s due out in August. This is an amazing piece of writing! In the first place, Clemens is a fluent and graceful stylist—the astonishing characterization and plotline aside, her prose is a joy to read. And then we have the fantastic magical-realist story…what a tour de force! The conceit that takes this mystery novel way above the level of genre writing is the protagonist’s companion: Death.

Yes. That would be him: the Grim Reaper himself. Our heroine Casey is shadowed by the very Personification, who, materialized in the form of an amusingly creepy eccentric, follows her around and generally watches out for her. Along the way, he collects this and that soul. Visible only to Casey, who herself is pretty postmodern, Death may or may not be a hallucination. That very ambiguity makes the story strangely credible and highly entertaining. It’s a great piece of summer reading—highly recommended!

A third possibility is to volunteer to commit some good works. Trouble is, most everything around here closes during the summer, and so there won’t be much to do. Nor, really, am I fond of working for nothing. I’ve never been much of a joiner, alas.

And finally, there’s the possibility of actually learning something. La Maya is always engaged in one painting class or another; she says her teachers are open to taking on rank amateurs. These cost rather more than I can afford, however.

One of my students teaches piano. Once she’s out of my class, no conflict would be entailed in hiring her to teach me to plunk away. That would be useful for choir: I do need to how to read music a great deal better than I can now.

Or I could take yoga or dancing classes at the community colleges. Tuition is amazingly low for several weeks of entertainment. Who knows? Maybe I could take piano at the college.

Speaking of doing something, it is, I’m afraid, time to get up from the computer and go kill some of the exuberant weeds that are trying to take over the front yard. Onward!

Moments of (Belated) Fame

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I’ve been horribly remiss in failing to thank the hosts of the two carnivals where Funny appeared most recently! Got no excuse: just lazy, I’m afraid.

SimplyForties hosted a spectacular Carnival of Money Stories featuring wonderful photos and quotes from some of the women I most admire. This edition is pretty rich pickings, with many really excellent posts. I got a hoot out of Money Beagle’s stories of learning from the eight-month-old (at the rate I’m going, the kid’s probably in graduate school by now…). PT Money has a cool post on discovering online tutorials for various DIY tasks, wherein we learn that grrls can change faucets and fix toilets! And at Gather Little by Little, Mike contemplates the joys of making money online. Simply Forties kindly included Funny’s squib on big-picture thinking among this august company.

Across the Pond, Miss Thrifty hosted the 219th Festival of Frugality. Her theme also revolves around history: an extremely interesting reflection on rationing during and shortly after WW II in Britain. Fortunately, the posts aren’t rationed. Christian Personal Finance has some apposite tips on computer maintenance and repair. And speaking of maintenance and repair of the central appliances in our lives, check out what FIRE Finance learned about operating refrigerators. Peak Personal Finance recommends a strategy that I’ve heard before and think is a really good idea for people contemplating a plunge into real estate. Funny’s w00t about SDXB’s thrift store coup appears in this carnival.

In other news, Adam e-mails to report that Mrs. Accountability will be taking over as administrator of the Carnival of Money Stories. We certainly wouldn’t want her to get bored, so be sure to send your best money adventures to Blog Carnival’s handy submission site! Congratulations to Mrs. A and best wishes for a great run.

Image:

Daryl Samuel, Statue of Rip van Winkle in Irvington, N.Y., by Richard Masloski
GNU Free Documentation License, Wikipedia Commons

March Madness, Round 2!

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FMF reports that Funny’s post is up in Round 2 of the March Madness contest. Just came from there and…yipe! There are some REALLY  good posts!

Please go on over to the site and vote for your favorites. FMF asks that we vote only once in each round (duh!) for our choices. So if you voted for Funny in the last round, you can vote again in this one…but don’t “forget” your first vote in Round 2 and accidentally vote twice in the same round. 🙄

FMF will donate from $100 to $500 (depending on the final ranking) to each winner’s favorite charity. I’m hoping to snare five hundred buckolas for All Saints, where they actually expressed some concern and caring at the time I was canned. Self-centered motive: yes. Altruistic cause: even more yes. They support charities ranging from soup kitchens and old folks’ homes to Habitat for Humanity.

Vote!

Don’t Panic: A sign of light

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Frugal Scholar had a bit of a meltdown as rumors of 25 percent cutbacks swirled through her campus. This kind of talk is unnerving, especially since we know that when layoffs loom, the talk that precedes them often comes to pass.

There’s certainly no real evidence that the economy’s alleged recovery is affecting the average Jane and Joe at the state level. Here in Arizona, the state and cities are at the point of canning firefighters and police, and we’re told that unless we vote in the proposed tax hike—which we probably won’t, this being a Kill-the-Beast sort of place—schools will be shut down and cutbacks will be Draconian. Real estate is still worthless, and while the media yelp enthusiastically over openings at this and that megacorporation, they’re all minimum-wage burger-flipping, shelf-stocking, and housekeeping jobs.

But…some individual stories offer a glimmer of  hope. Tina, a.k.a. The Kid, landed herself an editor’s job in the College of Business out at the Great Desert University. Pay isn’t great, but it’s a helluva lot better than the College of Liberal Arts and Sciences was paying her. A paycheck could fall way short of that and still be an improvement: she earned more in five hours waiting tables at Applebee’s than we paid her in a week. What she’s earning now at least apes a normal wage. And, because the journal has private funding, she will get occasional bonuses that, mirabilis, will not be paid through the rapacious state of Arizona.

Meanwhile, she had a bunch of freelance gigs pending, all of which had been sitting there for quite some time and none of which were doing anything. She had given up on them, figuring it was all so  much hot air.

Now, however, the largest of those putative clients wants her to manage a textbook project. Pay: $39,000, more than the enhanced new salary at GDU. Add that contract to the day job, Applebee’s, and her other contracts and, says she, in 2010 she could rack up as much as $100,000!

Not bad for a liberal arts graduate. Not bad for cobbling together a living from a bunch of different sources.

She’s now considering farming out this work to her fellow editorialists, keeping a finder’s fee for herself. This strategy will bring a few bucks for her and keep her clients on the string, so if the job falls through for any reason (it is ASU, after all, and ASU is the State of Arizona, an institution in shambles), she’ll still have the freelance work to fall back on.

Another friend was offered ten grand to do a book project but turned it down because she has enough work, thank you.

So, the post-layoff world is not altogether bleak. It is possible to turn up work here and there (some of it paid in cash), and my experience is confirming SDXB’s assurance that it doesn’t cost anything like what you expect to live in Bumhood. I’m now not only not sorry GDU laid me off, I’m glad of it! Wouldn’t go back to work full-time on a bet.

Medicare, Medigap, and Long-Term Care Premiums: How deductible are they?

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In response to my rumination about the strategy for surviving in Year 1 of Bumhood, when Social Security imposes an earnings limitation that amounts to real poverty, readers have speculated that structuring my business as a sole proprietorship rather than as an S-corporation would allow  me to deduct Medicare, Medigap, and long-term care premiums dollar-for-dollar against business income, rather than having to jump the 7.5% hurdle set up for people who itemize. Frugal Scholar made the interesting discovery that “employees of an S corp can take the self-employment health insurance deduction.”

It’s an interesting concept; I just sent off an e-mail to Tax Lawyer inquiring about it.

Somehow, though, I doubt Uncle Sam will let me run Medicare premiums through a corporation. Social Security automatically withholds Medicare Part B from your Social Security check—you don’t get a choice about it. It might be possible to work some sort of scam with the Medigap premiums, but even there…questionable.

The point of incorporating CE Desk as an S-corp, in my case, is to allow me to stay in business during this endless first year of penury, during which the government penalizes me if I earn more than $14,160 because I’m under age 66. I earn about $240 more than that teaching six sections of freshman comp. Without a way to shelter my editing and blogging income, I would have to close both of those enterprises down. As we know, when you quit working at a freelance enterprise, your clients go away permanently, so that when you want to revive your little business, you have to start over from scratch. I’m getting too darned old to start over from scratch! Plus FaM is starting to earn a small but steady income…I don’t want to get rid of that, either.

Channeling the income from the S-corp means that if I earn, let’s say, $5,000, through freelance enterprises, the money belongs to the corporation, not to me. I am an employee of the corporation. My “job” is to direct the corporation. The corporation has to pay me an amount deemed “reasonable” by the IRS. It’s not paying me for my day-to-day editing and writing work; it pays me to be a corporate director. So, on a $5,000 income it pays me a little over $500. That is salaried income.

The S-corp does not shelter the salary you pay yourself from self-employment tax. What it does is convert some (but not all) of your freelance income into a “dividend,” on which none of the social welfare taxes are due. From my pittance, it has to withhold FICA and Medicare, and it has to pay FUTAand the employer’s share of FICA on the amount it pays me. The rest of the money—the part that remains after my “salary” is paid—can either remain in the corporation to be used to cover operating expenses (or just to sit there) or can be disbursed to the corporation’s owner(s) as “dividends.”

Because Social Security views dividends as return on investment, not as salaried income, this part of my freelance revenues doesn’t count toward the $14,160 earnings limit.

While it is true that you don’t pay self-employment tax on the dividend part of your drawdown from the corporation, it also is true that you don’t get credit toward Social Security for that part of your annual earnings. Thus if you did this for a very long time—say, starting fresh out of law school or medical school—you would greatly reduce the amount of your Social Security entitlement when the time comes to retire. If you engaged this strategy, you would have to be certain that you were going to earn and save a great deal of money during your career…otherwise, in your old age you’d end up just as penurious as an aging college English lecturer.

According to Elderlaw, qualified long-term care insurance premiums and Medigap premiums are regarded as medical expenses and are deductible if they exceed 7.5% of your gross income:

Premiums for “qualified” long-term care policies will be treated as a medical expense and will be deductible to the extent that they, along with other unreimbursed medical expenses (including “Medigap” insurance premiums), exceed 7.5 percent of the insured’s adjusted gross income. If you are self-employed, the rules are a little different. You can take the amount of the premium as a deduction as long as you made a net profit–your medical expenses do not have to exceed 7.5 percent of your income.

Medigap will cost me about $1,200 in 2010; long-term care is about $960, for a total of $2,160. Medicare Part B will cost me $1,326 this year.

According to IRS Publication 502, Part B premiums are also treated as medical expenses:

Medicare B is a supplemental medical insurance. Premiums you pay for Medicare B are a medical expense. If you applied for it at age 65 or after you became disabled, you can include in medical expenses the monthly premiums you paid.

Thus the total amount, before I buy any eyeglasses, contact lenses, or prescriptions, that will qualify as medical expenses will be $1,326 + $1,200 + $960 = $2286. And I’m not even adding Medicare Part D into that. The total, with Part D, probably will come to around $2,400.

If I stand down off one class this fall, my total earned income will be $1257(12) + $2,400(5) + $500 + $500(12) = $33,584. That’s Social Security + teaching + freelance income + drawdown from 403(b). Multiply that by 7.5% and you get $2,518. So…one pair of Costco glasses puts me over the 7.5% qualifying threshold—that’s before I visit a doctor, before I buy a prescription drug, before I buy a couple boxes of contact lenses, before I pay for a shingles shot. And the 7.5% is on adjusted gross income, which you can be sure will be less than $33,584.

I don’t earn enough from freelancing to live on (far, far from it!), and so there’s no question of my working the business so that I write off medical costs and everything else against my taxes. If a miracle happened and FaM’s traffic went up about tenfold, I’d have to reconsider that. But unless the government can be persuaded to regard my teaching income as “self-employed” (which Tax Lawyer says it will not do), in my case the S-corporation is probably better than a sole proprietorship, because it allows me to keep the pittance I do earn through freelance editing and blogging from biting into my Social Security earnings.

Next year, when I’m 66 and can work until I drop without being punished for the privilege, will be another matter. But I’ll cross that bridge when I come to it.