You would think the tax code is clearly written without ambiguity or terms subject to interpretation. Apparently this isn’t true. Last May, I received a pro rata performance bonus check for the seven months I worked in 2013 before I retired. The money was direct deposited to my account and I received a letter describing the performance bonus at our South Dakota address.
In February, I realized I didn’t get a W2 for this payment. I contacted Human Resources at Volkswagen of America (VWoA). They sent a duplicate to our South Dakota address. I saw why I didn’t receive it before – it listed my old Michigan address. I didn’t think much of it and gave the document to our tax accountant, George Montgomery. George pointed out a tax problem. Since the W2 listed my address in Michigan, Michigan state tax was withheld – to the tune of $700!
George tells us this is one of those “subject to interpretation” cases. The tax code is unclear. Sometimes it can be interpreted as taxation is based on where I resided at the time the money was earned. It can also be interpreted as taxation is based on where I resided when the payment was made. I’ve been fighting the VWoA payroll manager over this interpretation, but it seems I’m fighting a losing battle.
The weather warmed considerably yesterday. We had blue skies and a high temperature of 81 degrees. Beach weather! Instead of bumming around on the beach though, I went to Pacific Beach Recreation Center to play pickleball.
Three pickleball courts at the PB Rec Center
It’s a shame to have indoor pickleball courts here when the weather is so fine. I played several games over the course of three hours. I had my smart phone in my pocket so the S Health app counted my steps on the court. Pickleball is definitely good exercise as I made 13,216 steps and burned 930 calories according to the app.
S Health app on my smart phone
Carole Sue Bringas picked me up at 5pm and took me out for sushi. I’ve known Carole since the eighth grade. We hung out with the Cadman Park crowd through high school. She took me to Sushi Ota, a popular place on East Mission Bay Drive near Lanna Thai. Carole is a sushi novice, but she really enjoyed the meal and is beginning to expand her sushi repertoire.
Platter at Sushi Ota
When Carole dropped me off at the coach, I saw two boxes UPS left at our site. I was expecting them. I wrote about leaving our CB radio turned on for several days and damaging our chassis batteries in this post. Since then, I had an external battery charger connected to the chassis batteries while we’re parked to try to revive them.
Last week, it occurred to me that something wasn’t right. I guess I’m a little slow on the uptake sometimes. When I left the CB radio on, we were connected to 50-amp shore power. When we have shore power, our inverter charges the house batteries. When the house batteries reach a certain level, excess charging current is diverted by a device called an Echo Charger to the chassis batteries. The CB radio is a small draw – it shouldn’t have killed our chassis batteries if the Echo Charger was working. I didn’t connect the external charger when we first arrived here at Mission Bay. Within two days, our chassis batteries were down to 7 volts – basically dead. I connected the external charger to keep voltage available. Last week I investigated and found a connector that had come loose, probably from vibration. This loose connector cut off the Echo Charger. Now I understand why the chassis batteries were drained. The damage is done though – deep discharges like this cause irreversible damage to the battery plates.
Our chassis batteries need to be powerful enough to crank the Cummins ISL diesel engine. This requires a starting battery that can provide high current for short period of time. Our chassis batteries also power some 12-volt accessories at the dash panel – radio, CB, and the DHS surround-sound amplifier. The surround-sound amplifier is the biggest consumer. Watching a long movie with the surround sound thumping can draw a lot of current. Normally, with the Echo Charger working on shore power, this isn’t an issue. If we’re dry camped without shore power, it will draw the chassis batteries down some, then the batteries will charge when the generator runs or the engine is running. Ideally, a deep-cycle type battery instead of a starting battery would be used for this duty.
I thought about rewiring the surround-sound amplifier to a circuit drawing off the bank of deep cycle house batteries. This would involve routing the wiring from the front cap of the coach to the panel in the bathroom cabinet, near the rear of the coach. I didn’t like that idea.
I finally decided to bite the bullet and buy two 12-volt hybrid batteries made by Optima. The batteries I bought provide 900 Cold Cranking amps – wired in parallel I have 1800 cold cranking amps to start our engine. These batteries are a unique spiral-wound absorbed glass mat construction and can also withstand deep cycling. This should solve the issue of cycling the batteries while watching TV without shore power. Of course, this type of battery costs much more than a typical maintenance-free starting battery.
Optima blue top battery
Batteries are categorized by group size. The group size doesn’t define the capacity or particular use. It describes the physical dimensions (i.e. height, length, width). Our chassis batteries are group 31 – large batteries. The Optima batteries weigh 60 lbs each!
Today’s task will be to remove the old starting batteries and install the Optima batteries. I think it will be a back breaker. The chassis batteries are located in the rear of the battery bay. I’ll have to kneel down and reach with arms fully extended to lift the batteries out and put the Optimas in.
When that job is done, I think I’ll head to the beach!
Dealing with the tax rules can be tough. But in my opinion, it seems logical to be taxed on the location where you earned the bonus. For example, sports athletes have to pay based on the state they play each game in.
I lived and worked in England for a couple years as an expat. The paperwork was incredible for both the IRS and the UK Inland Revenue. My job involved substantial travel. I had to prove not only the country I was in (UK, USA, other), but even the time of my flight. If I left England after noon, that day was considered to be residing in UK. But before noon, it was the country I was flying to.
Just be glad you are not these people:
http://dfw.cbslocal.com/2015/04/16/irs-says-prominent-texas-billionaire-late-brother-owe-3b/
I hear what you’re saying John. But, comsider this. The Federal IRS collects taxes when income is received, not necessarily when it’s earned. If they considered the bonus to have been earned in 2013, I would have to file an amended 2013 federal income tax. This isn’t the case, they treat it 2014 income since I was paid in May, 2014. I didn’t reside (or even set foot) in Michigan in 2014, the year the bonus was paid. Michigan should not have collected tax and unemployment insurance, but VWoA withheld the money and turned it over to the Michigan Department of Revenue. At this point, no one is willing to make the effort to overturn this error – so I’m out $700.