Replacing Vehicle Shocks & Struts

When is it time to replace shocks and struts?

Replacing shocks and struts on a vehicle is an very large expense. When do I need to replace them at all? Unlike tires, the vehicle still can pass state inspection with leaking shocks. There is no real driving force to make one to replace them, except one's personal preference.

Last time I had to replace shocks was because all four shocks were completely out of commission. The truck was bouncing around, hard to control./steer, and and tires were worn pre-maturely.

If I plan to keep the car for 100,000 miles, do I sell the car as is with the original shocks?

If I plan to keep the car for 130,000 miles, do I ride out the "bad time'?

If I plan to keep the car until it dies (say 200,000), do I wait until the bad shocks had done damages to other components of the vehicle?

If I plan to keep the car for say 200,000 miles, do I change them out somewhere in between, says, 120,000?

A set of shocks and struts runs about ($40x2 + $75 x 2) = $230, and the installation and alignment $300 - is it worth the extra expense?

Why cash out property before changed to rental use?

by Joe Gokaho 2010.02.12 D5

I am thinking about buying another property and converting existing primary home into a rental property. An accountant suggests to "cash out" as much as possible and use that as the down payment toward the new house. But why?

Why shifting the mortgage from your primary residence toward the rental property when interests in either "rental" and "primary residence" can be deducted from the tax returns.

As a rental property (Schedule E)

The Supplemental Income and Loss = rental income -expenses - interests - property tax -depreciation;

As a primary residence,

The interests, property tax are both deductible from the gross income.

# # #

When interest payment is deducted from Schedule E, the supplement income is added to AGI, when interest payment is deduct from Schedule A, AGI is also reduced.

So, it appears it doesn't affect the bottom line when determining taxes, right?

Well,

Many tax incentives are based on Adjusted Gross Income, the tax payment is based on (AGI - deductions). By shifting interests payment away from "Schedule A" to "Schedule E", you may qualify even more deductions. For example -the medical, educational deduction are based on AGI, if you have a lot of rental income, you may loose that deductions.

On the other hand, if you have losses on the rental property, you can only write off up to $25,000 a year. If your AGI is more than 150,000/yr - only part of the loss can be deducted. When I buy the 2nd, or 3rd or that vacation home -- it will be an interesting balancing act to avoid paying more taxes than you have to!

A New Texas Governor

by Joe Gokaho 2010.2.10 D3

I attended a GOP Texas Governor candidate rally at a local restaurant over the weekend. One asked why do I want to support Kay Bailey Hutchison, not Rick Perry? I am simple minded person, and my rational or irrational reasons are as follows:

1. Term limits - I think there is a reason for that. Kay is a good person, so as Perry, both of them have been on the same job too long. It's time for a change for both of them.

2. There are many projects that are driven by interests group, rather than "grass-root" demands. For example: The nice rest areas along Texas highways are great improvements over the olds, I use them often. But why did it cost 12 millions per rest area? I want it nice, but 12 millions a pop?? Gee

3. TxDot - is a mess. Transportation is an issue that affects everyone. Kay wants to get TxDot in order, if she can, it would a very positive effect toward prosperous economy.

# # #

Picture of Commissioner Wolff - interviewed at a Kay Bailey rally

Earned Income Tax Credit Needs to be Re-Tuned

by Joe Gokaho 2010.02.03 D3
This is the link to the "EITC" from the IRS website.
My main reason for opposing our current Earned Income Tax Credit is about the rules. It's all about AGI based.
Government wants us to rely on "government subsidy", not to work hard, because we might "earn too much" and loose EITC.
# # # #
Here are comparisons for "unjust" "unfairness" rules for qualifying EITC
# A A A #
Person A: has 2 qualifying children and makes $57,000 a year.
For Persona A takes standard deduction, the simple returns shows
that Persona A meets the EITC AGI threshold of $40,290 ($57,000 - 3 x exemption $3,700 - standard deduction $5,700 = $40,200)
Then person A get a check for $5,028, that makes
Person A earning = $57,000 and $5,028 tax free for a total $62,028/year
NOTE: EITC of $5,028 is equivalent to a W-2 wage 0f $6,905. //Note: FICA (6.2% & 1.45%) and federal income tax (10% for this tax bracket) or state income tax (CA 9.55%) //
# B B B #
Person B: has 2 qualifying children and he also makes $57,000 a year.
Person B decides take a part time job to supplement his income. The job pays $140 every weekends, That brings him a W-2 wages of $57,000 + $7,280 = $64,200
For Persona B takes standard deduction, the simple returns shows
The persona B has a AGI that EXCEEDS the EITC threshold of $40,290 ($64,200 - 3 x exemption $3,700 - standard deduction $5,700 = $47,400), so Person B doesn't get the $5,028 check.
For Person B, the real take home pay for that $140 weekend job, it only netted him $5,300 in his pocket.
Person B earning = $57,000 + $5,300 (after tax) = $62,300/year;
As is (do nothing) A earning = $57,000 and $5,028 = $62,028/year
# C C C #





Person C is making a bit more money that Person A and Person B, he pulls in $63,000 a year.
Person C figures out by contributing 10% of earning ($63,000) into his 401K plan will reduce his W-2 wages used for calculating AGI. The AGI is only $56,700 and Person C gets the EITC of $5,028
As (play with tax code) Person C earning = $63,000 + $5,138 (free) = $68,138

As (extra job) Person B earning = $57,000 + $5,300 (after tax) = $62,300/year;
As is (do nothing) A earning = $57,000 and $5,028 = $62,028/year

# # Freaking stupid policy # #

1. Why would Person B take on an "extra job" to help out the family, when government is telling you stay home like Person A - he is better off by doing nothing?
2. Why would Person C need more government assistance than Personal A? Person C is creating his personal wealth on tax payers back?

3. Why would someone improving their skill set to get a better paying job (says from $57,000 year to $67,000); then discovering that all that hard work yields same amount of beef ?

# # Tea Party Idea # #
Let EITC to be "age" based, not AGI based, helping out family with kids by giving parents more money into their pockets toward child education or after school activities. We are not penalizing higher wage earner, instead they will create more jobs for the economy in the "eduction sector" by sending their children everywhere as "consumers".
1. EITC is not a "cash back" based. EITC is not indexed AGI tax bracket.
2. Dependents - children under 25, are entitled to "additional deduction" - all filing format - either 1040 (long or short), taking standard deduction or itemized deduction, filing single, married, or head of household.
3. The exemption deduction of $3,700 per person still applies.
4. After AGI calculation, additional $12,000 deduction can be applied for 1 child, $16,000 deduction for 2 children or $20,000 for 3 or more children.
For the middle class, the typical tax bracket is around 15% to 25% bracket range;
The saving (15% -25% tax bracket) of $1,800 to $3,000~ $200 /month for 1 child,
or Saving of (15% -25% tax bracket) of $2,400 to $4,000 ~ $267 / months for 2
or Saving of (15%-25% tax bracket) of $3,000 to $5,000 ~ $333 /months for 3 or more
I call this a supply side (non-government) stimulus plan. It's not just cash in the pocket, but rather it is a fair and meaningful tax cut for educating our kids.