Monday, December 30, 2013
This means it will be possible for me to earn a maximum benefit (one based on 35 years of maximum earnings). Through 2009 I had 26 such years from my job with IBM. Through 2013 I have 4 more from my new job. And if I continue to work through 2018 (when I will be 64) I will have 5 more for a total of 35. So by continuing to work (after being laid off from IBM) I can potentially be credited with as many as 9 additional years of maximum earnings (instead of the limit of 6 I had assumed in my earlier post) and increase my benefit by about 15% (instead of 10%). However it remains the case that the increase in the benefit is considerably less than the increase (35% for 9 additional years) in years worked.
While looking into this I noticed I hadn't gotten my annual Social Security Statement since 2010. This is because the government (in a somewhat dubious effort to save money) stopped sending them out in 2011. I found this a bit annoying but it turned out to be fairly easy (for me at least) to create an online account with Social Security and print out my current (based on my earnings through 2012) statement.
Thursday, December 26, 2013
This is a point the "Mr. Money Mustache" blog (which I recently added to my blog list) makes with which I agree. Although in my view the blog has a tendency to go overboard veering towards "what doesn't kill you makes you stronger" territory which discussing biking in lousy weather and the like.
Wednesday, December 25, 2013
Sunday, December 15, 2013
Thursday, December 12, 2013
This book largely consists of revised versions of a series of articles Thaler (often with coauthors) published in the Journal of Economic Perspectives between 1987 and 1991 on the general theme of economic anomalies, situations where people behave contrary to theory. These articles summarized academic research on each topic. I found this preferable to Ariely's book which in my view unduly emphasized his own research. However the articles are now over 20 years old and so potentially dated. And they are written in a style which I didn't find particularly engaging.
But my main objection is the same as to Ariely's book, it is not clear how significant these anomalies are. I think most people understand that economic models are approximations which are not exactly correct. So finding a few cases where their predictions are off doesn't by itself mean too much. As Thaler concedes near the end of this book, what is really needed are models (or theories) that predict better.
So in summary I don't think this book offers a lot to the lay reader. There were a few points of interest but in general it isn't going to be of much help in understanding current economic issues or in making better personal finance decisions.
Wednesday, December 11, 2013
My main problem with the book is that it is weak on the big picture. By way of analogy human vision is generally pretty good but not perfect as the existence of optical illusions shows. But a book just describing various optical illusions would not be a particularly good way of giving an overview of human vision. Similarly it is hard to know what to conclude from a book describing a few experimental situations (often quite artificial) in which people behave irrationally. I didn't get much more from this book than the observation that people sometimes behave irrationally which I already knew.
One reason for the book's problems with the big picture is as mentioned above it is largely based on Ariely's own experimental work. I believe a book like this should present a general overview of the field suitable for the lay reader. This would include summarizing the most important and well established experimental results. Just describing your own work (in what I sometimes thought was excessive detail) is not as useful. Among other things it is difficult to be objective about your work, its importance and weaknesses. Also I suspect there is a publication bias at work in this whole field. I doubt it is as easy to publish experimental results concerning situations in which people do behave more or less rationally. Which could give an unbalanced view of how pervasive irrational behavior actually is.
The book does present an useful general principle, namely that people like to evaluate things relative to other things rather than on an absolute basis. So B may appear more attractive when presented with a clearly inferior alternative C than when considered in isolation. So experiments can be devised in which people prefer A to B when given 2 choices but prefer B when given 3 choices with C an inferior version of B added. The addition of C makes B appear more attractive although this violates models which assume A and B have a definite absolute value. Similarly people tend to evaluate their circumstances relative to their recent past (or compared to people they consider their peers). So happiness is not as related to income as much as you might expect. A rich person whose life is getting worse will tend be unhappy while a poor person whose life is getting better will tend to be happy even though objectively the rich person is still much better off.
There are a few more worthwhile observations in the book but not in my view enough considering its length. And I didn't think the book was particularly well written. So while I don't think the book is totally worthless I would not recommend it.
Sunday, December 1, 2013
I have also added the Mr. Money Mustache blog by a man who retired (sort of) at age 30 by saving a ridiculous fraction of his income. I find his point of view interesting although I often disagree with it. And there would be problems if everyone tried to adopt his ideas.
I would like to add Kevin Drum's blog at Mother Jones to my blog roll but I have never been able to get the link to work properly in the Blog List widget. For some reason it sends you someplace else in the Mother Jones website although the link works fine in the body of a post as above. If anyone knows how to fix this let me know.
Saturday, November 30, 2013
I have set up an author page for him on Google Scholar which lists his papers with citation counts. I relied on Google's clustering algorithm to generate the list of papers. I didn't see any that obviously aren't his but there could be omissions.
Thursday, November 28, 2013
Krugman's diagnosis is that our current sluggish economy reflects an overall lack of demand. There are idle resources but businesses are unwilling to hire people and increase production because they fear (with good reason) that they will be unable to sell the resulting goods and services. I find this plausible. A competing explanation cites structural problems, that the economy is set up to produce the wrong things and that time is needed retrain workers and refit factories. I don't find this convincing. If overall demand was adequate but not matched to supply you would expect to see shortages developing and prices rising for those goods and services in strong demand as well as idle capacity in areas of weak demand. But for the most part this isn't happening. Now structural problems could become a problem as the economy improves. I am not convinced that estimates of current capacity generated by naive extrapolation of pre-crisis GNP trends are realistic. But I don't think structural problems are currently a binding constraint.
I find Krugman's explanations for the origin of the lack of demand and ideas for fixing things less convincing. He appears to believe that the economy has multiple equilibrium conditions and that although the economy is currently in a unfavorable equilibrium condition (into which it was pushed by the financial crisis) there is also present a preferable full capacity equilibrium. So all that is needed is temporary government actions to push the economy into the more favorable equilibrium where it will remain by itself without needing continuing support. For my part I doubt this more favorable equilibrium actually exists (under current conditions) making policy attempts to push the economy into it futile and potentially dangerous.
One point of disagreement is whether the lack of demand is a chronic condition. Certainly there was a temporary aspect, the financial crisis panicked people into trying to increase savings (or reduce debt) and due to the well known "paradox of thrift" this leads to a drop in demand. But the acute phase of the financial crisis is long past, people are no longer panicked but demand remains depressed. I think this reflects an underlying structural problem which needs to be addressed. Krugman dismisses my favored explanation briefly in a paragraph on p. 83.
For example, one popular story about inequality and crisis--that the rising share of income going to the rich has undermined overall demand, because of the shrinking purchasing power of the middle class--just doesn't work when you look at the data. "Underconsumption" stories depend on the notion that as income becomes concentrated in the hands of a few, consumer spending lags, and savings rise faster than investment opportunities. In reality, however, consumer spending in the United States remained strong despite growing inequality, and far from rising, personal saving was on a long downward trend during the era of financial deregulation and rising inequality.
I find this unconvincing. Personal saving is measured on a net basis which can hide a growing imbalance as part of the population saves more and more while another part spends more than their income and goes deeper and deeper into debt. This can maintain demand for a while but isn't sustainable indefinitely. Eventually the indebted portion of the population reaches their borrowing limits and is forced to cutback on consumption while the savers continue to try to save leading to a drop in demand. This looks to me a lot like conditions before and after the crisis point.
Krugman has two main ideas for improving the economy, pushing up the inflation rate and a temporary deficit financed surge in government spending. Both seem politically difficult at present which in my view is just as well as I find them uncongenial.
The rationale for increasing inflation is that this would allow additional cuts in the real interest rate (which is currently constrained by the inability to reduce nominal interest rates below zero, "the zero bound"). But I am unconvinced that any benefits would exceed the costs. Krugman suggests a relatively benign sounding increase from 2% to 4% but it is unclear why this would be enough to have a significant effect. Perhaps an increase to say 12% would be needed which sounds a lot less benign. In any case, as Krugman acknowledges, an increase in the inflation rate also has large distributional consequences favoring debtors at the expense of savers. So having a lot of savings myself I am not inclined to support increased inflation.
The rational for increasing government spending is to increase overall demand encouraging businesses to expand. I don't doubt it would have some such effects in the short run but am less convinced they would be sustainable. As noted above while Krugman believes temporary deficits would be sufficient to push the economy into a more favorable equilibrium I am not convinced. A political issue is what to spend the money on, there aren't that many uncontroversial and clearly temporary projects for the government to fund. Krugman points out that crisis imposed budget problems led state and local governments to lay off many workers (deepening the crisis) and argues that this could have been prevented by increased federal aid to local governments. But while this might have been a good idea several years ago it is entirely unclear that federal aid to hire all those workers back is a good idea now. There are other problems, some of the increased demand will be reflected in increased imports. This could significantly reduced any benefits to the US economy. US policy cannot really be evaluated in terms of purely domestic effects.
Krugman also discusses Europe's troubles. He attributes many of them to the formation of Euro zone with which I agree, the Euro was clearly a mistake. But it is unclear how to fix things, as Krugman states unraveling the Euro would be very costly but there are also serious problems with keeping it as it forces an inappropriate uniformity of policy throughout the Euro zone.
In summary this book is a reasonable explication of conventional liberal thought about the economy. However it is not all that original, I didn't find it to offer a lot of fresh ideas which I hadn't encountered before. Another issue is the political discussion (which speculates about the outcome of the 2012 elections) is a bit dated. Nevertheless it is reasonable introduction to the issues from a liberal point of view.
Monday, November 11, 2013
Of course politicians in general lie a lot so this is not some unique sin of Obama's. He was not the first American President to lie to the American people and he won't be the last. One of the (many) things that irritated me about President Carter was his claim that he would never lie. In my view a more honest man would have pledged to try to minimize his lies which Carter was failing to do every time he pledged never to lie. In any case just because many politicians have lied in the past and will lie in the future doesn't mean they shouldn't pay a political price when caught. It appears Obama is paying such a price and he deserves to. If he and his administration had devoted less effort to selling their plan politically and more to developing a sound and workable (which probably implies less ambitious) plan they and the nation would be better off today.
Wednesday, October 9, 2013
Apparently the Stop&Shop is the third supermarket to fail at that spot in a 20 year period. This is a bit surprising as it seems like a good location with easy access to Route 1. But perhaps the population density in the immediate vicinity is not as high as it could be. I hadn't seen any indications of distress at the store, although in hindsight perhaps the fact that (at least at the times I was there) most of the checkout stations did not need to be staffed was a bad sign.
Monday, October 7, 2013
One problem with the book is that when Silver moves away from his specific areas of expertise he makes mistakes showing he has failed to completely grasp the material. On page 110 Silver writes:
... They are hot: the 77 trillion calculations that the IBM Bluefire supercomputer makes every second generate a substantial amount of radiant energy. They are windy: all that heat must be cooled, lest the nation's ability to forecast its weather be placed in jeopardy, and so a series of high-pressure fans blast oxygen on the computers at all times. ...
Here "radiant energy" is at best a confusing way of saying heat. And I had never heard of oxygen (as opposed to simple air) cooling. In any case according to NCAR:
Bluefire relies on a unique, water-based cooling system that is 33 percent more energy efficient than traditional air-cooled systems. Heat is removed from the electronics by water-chilled copper plates mounted in direct contact with each POWER6 microprocessor chip. ...
The chess diagram on page 271 is obviously wrong (the pawn on g2 should be on g3) and the related statement on page 270:
These databases relied on the assumption, however, that Kasparov would respond as almost all other players had when faced with the position, by moving his knight back out of the way. ...
is simply false, the usual move is bg2, retreating the knight would be very weak.
On page 374 Silver writes:
The greenhouse effect is the process by which certain atmospheric gases - principally water vapor, carbon dioxide (CO2), methane and ozone - absorb solar energy that has been reflected from the earth's surface. ...
Here "reflected" should be "absorbed by and re-radiated". The key point is because the sun is hotter than the earth solar radiation has shorter wavelengths than the earth's heat radiation. Greenhouse gases absorb more strongly at longer wavelengths hence block more of the outgoing radiation as compared to the incoming solar radiation. The effect is to warm the earth's surface. On the other hand sunshine reflected from the earth's surface remains shortwave and leaves as easily as it arrived.
These (and other similar) errors aren't critical to Silver's arguments and could be fixed without too much trouble but they diminish the reader's general confidence in the author's reliability. Silver would have done better to have had subject matter experts check for this sort of thing.
The book has other problems. At 454 pages it is quite long and there are things like the chapter on the Kasparov - Deep Blue match which could have been cut without too much loss.
I didn't care for the analysis of the failure of the rating agencies prior to the recent financial crisis. Silver discusses technical issues but the real problem is the agencies are paid by the people selling the securities they are rating. This gives them an obvious incentive to fudge their ratings. Silver understands this when it comes to political polling, polls paid for by a candidate will generally report more favorable results for the candidate than neutral polls. In the case of political polls the amount of fudging is limited by the existence of neutral and opposition polls. There were few such countervailing forces when it came to rating complex mortgage backed securities and the rating agency fudging got totally out of hand. At the end nearly worthless securities were being given AAA ratings. Silver largely ignores the bad rating agency incentives which remain in place and seem likely to cause similar problems in the future.
I don't want to be too negative, the book contains some interesting material and I agree with a lot of Silver's conclusions. But I can't really call it a must read.
Tuesday, October 1, 2013
The report refers to decisions made by the crew and speculates about the thinking behind them. But I expect the crew as a whole was not making decisions, instead the decisions were made by the crew's leaders (who appear to have been two men which the report does not name). If 19 people are killed in plane crash the investigation will naturally focus on the pilots. What was their training, experience, reputation? Similarly one would expect this report to discuss the background of the fire crew leadership but in fact it provides no information at all. Also in recent years there has been much attention paid to cockpit dynamics. For example if the pilot makes a mistake does the co-pilot feel free to object. Again this report does not discuss the analogous fire crew dynamics at all.
The fire crew was killed while apparently attempting to move from one safe area to another (perhaps as the report speculates because they felt the second area would leave them better positioned for further firefighting efforts, although it should be noted the overall leadership did not expect or particularly want them to do this). In doing so they chose a route that placed them in mortal danger. Initially they moved on a two track road along a ridge. This seems to have been reasonably safe at least at first as they had a view of the fire and various retreat options if it moved towards them. However they then left the road (which would have eventually taken them to their apparent goal) to descend off the ridge through a box canyon directly towards their destination (a ranch with a cleared area). Although this was a shorter route than continuing along the road it probably wasn't quicker as it was much heavier going. The report speculates that the ranch appeared closer than it was and that they didn't realize how slow the going would be. The real problem however was once they left the ridge they lost sight of the fire and (according to the report) the ability to perceive the wind shift that drove the fire towards them. By the time they realized they were in danger it appears it was too late to do anything. The report lists some of their options at the point they left the ridge but does not discuss one possibility. Why didn't they leave a scout on the ridge to keep watch on the fire and warn them if it started to move towards them? They had utilized a scout earlier in the day in what seems like a less dangerous situation so why not here? The report doesn't discuss this.
The report doesn't want to admit that any mistakes were made. This makes it hard to identify problems and make improvements going forward. The report's view is that firefighting is inherently dangerous and that these 19 deaths were just one of those things. I am not convinced.
Added 12/25/2013: I fixed the link to the report. Some other material including a video was also released.
Saturday, September 28, 2013
Friday, September 27, 2013
Tuesday, September 17, 2013
This book is seriously flawed but it held my interest for a while (I found it dragging a bit near the end). What value the book has is that of chronicling one person's experience and perspective, it is not good for an overall big picture view of the financial crisis or even of Lehman's collapse. For this reason I think the complaint in the WSJ journal review that the book devotes too much space to McDonald's earlier career and background is wrongheaded. I think it is useful to know that his parent's divorce led to a period of (at least relative) economic deprivation, that he had to make an extraordinary effort (taking a job selling pork chops just to establish that he could sell and then studying for and passing the securities exam on his own) just to get an opportunity for a Wall Street career and that he resented the rich private school kids who appeared to have an easier path. I found McDonald's personal story of some interest and some of his anecdotes illuminating although perhaps not always in the way the author intended. For example McDonald tells the story of a gambling trip in which one of his co-workers goes down $160,000 playing blackjack. When McDonald sensibly suggested that perhaps it wasn't his night the co-worker gave him a "quitters never win" lecture and continued playing. In this case his luck did turn and according to McDonald he ended up $475,000. McDonald appears to feel this depiction of his co-worker is highly favorable but I would draw different conclusions.
The book does have numerous problems. It is not very well written. The explanation of some of the complex financial products Lehman dealt with is muddled at best (perhaps in part I suspect because McDonald didn't really understand them himself). McDonald isn't very revealing about his personal finances. At an earlier point in his career he and a friend founded a website devoted to convertible bonds which (by his account) was quite successful leading to its purchase by Morgan Stanley. But McDonald doesn't tell us the sales price or his cut. At Lehman he receives a bonus he is happy about but then is disappointed by his bonus the following year. But again he does not reveal the actual amounts (perhaps he suspects many readers will be unsympathetic to complaints about a $700,000 (or whatever) bonus). The details of his bonus are important because a large portion was in the form of Lehman stock which he was not allowed to sell for several years. This means his opinion that the government should have bailed Lehman out is not disinterested. In general McDonald appears to have a number of biases which I suspect color his account. Also McDonald was not high ranking enough to have personal knowledge of top level internal conflicts and in addition he left Lehman some months before the end. So the book's version of the key events in Lehman's collapse is third hand, poorly sourced and probably not completely reliable. And in my view the book doesn't have much of interest to say about the larger context, the financial crisis that precipitated Lehman's collapse.
So in summary while I found this book interesting in places for the view it gives of an aspect of Wall Street I can't really recommend it.
Wednesday, September 11, 2013
It is perhaps of some interest that although every informed person knew the stock was about to become worthless, trading continued (valuing the stock at a few cents a share) right up to the end. So the stock market is not perfectly efficient.
I contributed to this inefficiency in a small way by not selling my shares last year. This was a result of my natural sloth and the fact that the proceeds would have been small relative to the hassle involved (given that I was holding paper certificates). As it turned out this worked out well as the recent raise in the federal capital gains tax rate means the write off will be worth more to me in 2013 (although this is just luck, I wasn't considering it at the time).
Monday, September 2, 2013
I think American policy should embody a presumption against war. We should undertake military actions only when they are clearly in the national interest. The connection to the national interest in this case is extremely tenuous. Syria poses no direct threat to the US. There is a claim that Syria has violated an international norm. Be that as it may I believe a more important international norm is that nations shouldn't attack other nations absent an immediate and direct threat which isn't present here.
It is also very unclear what any American strikes are expected to accomplish. There appears to be a significant danger of mission creep. If our first strikes don't appear to accomplish much other than killing a bunch of people are we going to get more and more involved in an attempt to justify our earlier involvement?
In short I don't see a compelling case for military action so I would refrain.
Friday, August 30, 2013
While looking over the New York tax computation worksheets I noticed something bizarre. Suppose a married couple is taking the standard deduction of $15,000 so that their taxable income (line 38) is $15,000 less than their AGI (line 33). Then if I have figured correctly, if their AGI is exactly $2,000,000 their tax will be $135,972.5 while if their AGI is just $50,000 more (that is $2,050,000) then their tax will be $179,487 or $43,574.50 more. This is a marginal rate of over 87%. Taking federal taxes into account some people in this situation seem to be facing a marginal rate of well over 100% for this income range. This makes no economic sense, it is just evidence that the New York legislature can't be bothered to write sensible tax laws.
Monday, August 26, 2013
The main park trail is a paved loop about one half mile long with some gravel spurs going off towards the river. Along with the flowers quite a few trees have been planted. Time will tell how well the trees do, some them don't look so good at the moment although perhaps some attrition has been allowed for.
Wednesday, August 21, 2013
Sunday, August 11, 2013
Thursday, July 25, 2013
And my New York state income tax refund still hasn't arrived. Apparently New York changed contractors and this has led to delays. At least New York also pays interest after 45 days (on excess withholding).
Sunday, July 14, 2013
On the other hand I don't agree that this case had nothing to do with Florida's "Stand Your Ground" (SYG) law. SYG laws in general encourage (by not discouraging as in "duty to retreat" jurisdictions) people to get into violent confrontations while armed. This will inevitably produce more shootings like this one (even if the defense didn't need to rely on the SYG law in this case). It should be noted that in a "duty to retreat" jurisdiction Martin too would have had a duty to avoid a violent confrontation (as it appears he could have done by going inside when he got home instead of reversing his path and confronting Zimmerman). Encouraging people to stand their ground can get them killed. You can argue that the negative effects of SYG laws are outweighed by positive effects but I think it is disingenuous to argue that there are no negative effects. For my part I think the law should encourage (within reason) law abiding citizens to avoid trouble. So I generally favor a "duty to retreat".
Sunday, June 16, 2013
Yesterday I visited the Great Falls National Historic Park in Paterson, New Jersey. I thought it was pretty nice and worth seeing if you live nearby. It reminded me a bit (on a greatly reduced scale of course) of Niagara Falls. We have gotten some rain recently so the Falls may have been a bit more impressive than usual. There was some spray or mist from the Falls at some of the viewing locations which was fine on a hot day but might not have been as pleasant in colder weather. There is no charge to view the Falls and parking was no problem yesterday.
I took the picture near the parking area. With a little walking you can get a closer view of the Falls from the bridge in the background and from a viewing area on the other side.
Thursday, June 6, 2013
Incidentally while Scalia's dissent accuses Kennedy's majority opinion of slanting the facts to support his argument the dissent does not appear to be perfect in this regard. In footnote 2 Scalia claims:
Sunday, June 2, 2013
Incidentally I could have used my personal car and received a mileage reimbursement. This probably was the better option but I was deterred by the fact that my employer's insurance would not cover any damage to my personal vehicle. But given the low value of my car and average driving ability the expected value of such damage was likely under $20 which would have been covered by the generous mileage allowance. Also using my personal car would have meant I could have left from and returned to my house instead of from my work location (where I picked up and dropped off the rental) saving some time and hassle. And I could have paid the tolls with EZ Pass instead of with cash again saving a bit of time and trouble. And finally although I liked the Yaris well enough as with driving any unfamiliar vehicle there was a bit of a learning curve which meant I was probably at a bit higher risk of getting into an accident.
Monday, May 13, 2013
I closed on the sale of my Ossining townhouse last Monday. The sales price was 1.59 times what I paid back in 1989 off a bit from the high point of about two times for units like mine (back around 2006). At about 2% a year appreciation this didn't keep up with inflation. Even before deducting for the 5% real estate commission and other expenses. So in one sense this wasn't a very good investment. Although it wasn't terrible compared to renting. And on the other hand I got to live there 23 years rent free and I liked the place. Which is also an important consideration.
I might done a bit better financially if I had been less slothful and gotten the place listed 6 months earlier in the Spring instead of the Fall of last year. Spring seems like a better time to list. There are more potential buyers looking and I think the complex is more attractive at that time of year with warmer weather and more greenery. Also I would have (potentially) saved some months expenses.
I took the picture two days before the closing when I visited the place for the last time. My unit is behind the middle tree. It faced South so it was nice and sunny and I liked the views of the pond.
Friday, May 10, 2013
When I was at IBM I tried for a while (until I lost interest) to keep track (via Science Citation Index) of papers citing mine. This is much easier. And Google Scholar seems to be pretty good at tracking down free online versions of published papers. It is interesting to see that the number of people citing my papers each year has been trending upward although I haven't been producing much in the way of new papers for a long time. However I suspect this is mostly because the number of papers being published each year has also been steadily rising.
In summary this seems like an interesting and worthwhile feature. It does depend on authors setting it up for their papers. At the moment many haven't but hopefully more will over time.
Sunday, April 21, 2013
Addendum (5/15): It seems I was likely given bad (or perhaps just highly pessimistic) information from the clerk. When I returned 2 weeks later for the final time I didn't have any additional mail in my box so it appears the change of address took effect almost immediately as I would have expected.
Tuesday, April 16, 2013
Regarding tax refunds, these count as taxable income if you deducted the taxes in a previous year but only if (or to the extent) that the deduction saved you money. In my case it hadn't because I was subject to the AMT (alternative minimum tax) which does not allow you to deduct state and local taxes paid. Showing this requires refiguring your prior year's taxes which ideally TurboTax would automatically do for you (assuming you used it in the prior year) but which in any case isn't that complicated (assuming you were using TurboTax) although TurboTax explains it badly.
Regarding estimated tax payments the government doesn't want to wait until April 15th to get its money. So it withholds taxes from your wages (and some other things) and requires quarterly estimated tax payments to cover the taxes on income (such as dividends or capital gains) not subject to withholding. If you don't pay enough in estimated taxes you will in certain circumstances owe a penalty. This includes cases where your total estimated tax payments were sufficient but you didn't pay them in equal installments throughout the year. However you aren't required to predict the future, if your income comes in unevenly during the year your estimated tax payments can be uneven as well as long as they keep up with your income as received. In my case I had large capital gains in December and made a large estimated tax payment in January. If my income had come in evenly through the year I would have owed a substantial penalty but as it was I didn't. However demonstrating this is a fairly involved process. You have to figure your income (and deductions) for the first 3, 5 and 8 months of the year, annualize them, figure the tax and then show your payments (withholding and estimated tax) covered at least 90% of the prorated tax amount. There is unavoidably a lot of work in figuring your partial year income and deductions but once you have entered the amounts TurboTax should be able do the computations automatically. But for some reason it doesn't, while it figures the regular tax on the annualized amounts it makes you figure the AMT yourself a fairly complicated calculation. And then it uses the wrong threshold for the June 15 estimated tax payment. This should cover 37.5% (90% of 5/12) of your annualized tax but TurboTax uses 45% (90% of 6/12 as if June was the seventh month of the year instead of the sixth). This is not entirely its fault as it is following an IRS example with the same error (I am assuming this error hasn't actually been written into the tax laws). Fortunately this didn't matter for me.
As I recall TurboTax warns you the alternative computations above are a lot of work without providing useful guidance on when they are likely to save you money. As a result I suspect some people are paying more in taxes than they are legally required to.
I found other aspects of the program irritating, it tries to sell various upgrades and when I printed out one copy of the return to mail and one for my records I got two copies of stuff like the filing instructions which is just a waste of paper (and ink).
All in all I am not inclined to go back to doing my taxes by hand but I find the program irritating also. Probably not enough to try a different program next year though.