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The dharma of dollars what buddhism says about money and meaning

Buddhism, which holds that wealth is temporary and no path to happiness, might not sound like the best source for money wisdom. Not so, says Ethan Nichtern, the prominent Buddhist teacher, who has written a new book, "The Road Home," on self-awareness and spiritual seeking. Money is unavoidable and it is people's attitude to it that causes worry and stress, says Nichtern, who sat down with Reuters to discuss how money fits into a spiritual approach to the world.   Q: Can we escape our connection to money - or should we? A: We need to have some kind of system for measuring how we consume, produce, and share. So there will always be money in any complex society. And any human who wants to pay the rent has to learn the rules of budgeting. But it's not just a necessary evil. Money can also be spiritual or divine, by powering whatever positive activity you want to engage in. Q: You were raised in money-centric New York City. Did that shape your views?A: Growing up on the Upper West Side and in the East Village, I certainly realized how important money was. It determines so much of the structure of our world, and it also brings so much stress along with it. Especially in New York, people feel burdened by the need for the security and status that money brings. That's why we all need to open up and have this conversation. I've never had the (billionaire) Koch Brothers in my class, though - that could be awkward.

Q: Why is money seen as the solution to all our problems?A: In life, we are all wandering around in circles, thinking that our next stop will be exactly what we have always been looking for. But we never arrive - it's an illusion of an oasis. It is the same thing with materialism: The idea that 'If I get the right stuff, I will finally feel at home.' But we can never acquire enough stuff. Q: Why are we so dependent on something so abstract?

A: First money was gold coins, then it was paper, and at a certain point it just became computer files. Money has become more and more abstract, and we are basically just agreeing that this is the way things are. But that doesn't make it any less powerful. Even though it is abstract, we cling to it as part of our identity. Q: People's foremost money worry is retirement. How can we deal with that anxiety?A: Buddhism teaches about cause and effect. So by all means, prepare for retirement. There is nothing wrong with that. But the other way to look at it is, if the mind is insecure, then no amount of money will ever make us feel safe. Even if you saved $50 million, you would just worry about something else, like getting cancer or having a car accident. Just try to remember that everyone else on earth has a similar anxiety. Then you won't feel so alone. So plan well, and then let go.

Q: How can people use money as a positive tool?A: We are taught to use money in ways that isolate us. But money is an exchange. If there was only one person in the world, you could be a trillionaire, but it wouldn't even matter because all that money would be worthless. Think about how money connects you to other people. From a Buddhist standpoint, you should think about how to use that money to empower others. Q: Any final messages about the possibilities of money?A: You can be an awakened human being, and also make a living at the same time. When people say money is dirty, then they are just leaving it all to people who don't have any spiritual practices or values. That is an abdication of our responsibilities. Those of us with compassion actually need to go deeper into these arenas. With money, we can empower some very meaningful things in the world.(The writer is a Reuters contributor. The opinions expressed are his own.)

Your money avoiding panic from roth conversion glitch

taxes due on your 2010 Roth conversion from the Internal Revenue Service? Don't worry, you are not alone - and you likely do not actually owe any extra cash. Thousands of these frightening notices went out this spring to taxpayers who converted tax-deferred retirement money from a traditional IRA to a Roth IRA, in which income taxes are paid upfront and not owed later. The problem stems from the complexities of the 2010 Roth conversion - in which for one special year only, taxpayers could choose to spread the taxes due over two years, rather than paying them all at once. Add to that a glitch between some of the tax software programs and the IRS. It adds up to a lot of taxpayers who converted their traditional IRAs to Roths in 2010 receiving IRS notices that they owed more taxes (and penalties). If you received one this spring, you do need to respond, but it is not a reason to panic."People freak out about anything they get from the IRS," says Bill Fleming, of PwC's private company services practice. He says he has received a number of these notices for clients. "The software providers and the IRS had a disconnect."

With a traditional IRA, you pay taxes when you withdraw money, but with a Roth you pay the tax when the money goes in and then do not owe income tax again. So if you converted a traditional IRA to a Roth - a move that had been restricted but was opened up to taxpayers at all income levels in 2010 - you had to pay taxes on the conversion. While most Americans have long since moved on from thinking about tax year 2010, the IRS is only now sorting its way through the massive volume of 2010 returns and trying to find discrepancies that resulted in taxpayers not paying what they owed. Its computer system tries to match documents in the more than 100 million individual tax returns to find errors, and when it discovers a discrepancy it sends a notice to the taxpayers."They are running a regular matching for 2010, and they don't know it's a Roth conversion. They are just looking for a distribution from a retirement account. For whatever reason, they are not picking up," PwC's Fleming says. "They are saying, 'Oh, there's a massive under-reporting of IRA distributions. There must be a problem.'"Details of any Roth conversion appear on Form 8606, rather than on the main 1040 return, making it more difficult to match the information, Fleming notes. A glitch in the e-filing systems of some of the large tax software firms meant some data about these Roth conversions never made it to the IRS.

CCH Inc, one of the large professional tax software firms, sent a note to clients about the issue, noting that some electronic returns were missing page 2 of Form 8606."CCH alerted the IRS to the issue and has been working with them on a resolution," according to the notice, which adds that the erroneous notices were halted in late April. Thomson Reuters Corp, the global information company, another provider of professional tax software, had a similar issue: Its GoSystem Tax product did not signify taxpayers' intent to defer the tax on the 2010 Roth conversions, as permitted for that year only, on returns filed electronically."When the IRS later ran validation checks, these e-files were flagged and the affected taxpayers were sent notices," said David Wilkins, a spokesman for the tax and accounting business of Thomson Reuters. "We resolved the issue. Also, the amount of tax owed by these taxpayers was not affected and they were not required to pay penalties."

It is unclear whether consumer tax software was also affected by glitches, or whether most people who did Roth conversions chose to seek out accountants - and thus relied on the professional software - for help. H&R Block Inc spokesman Gene King said that his firm had not seen or heard of the problem in its consumer tax software. A TurboTax spokeswoman did not respond to requests for comment. The IRS did not respond to a request for comment. TAXPAYER RESPONSE This all may sound technical, and it is, but for taxpayers receiving the notices about large phantom tax bills, it is also a big deal. On the online investing advice forum, posters have been freaking out about dunning notices that sometimes reached into the tens of thousands of dollars. If you are among the taxpayers who received one of these notices, and you did everything right on your Roth conversion, you shouldn't worry. However, you cannot just ignore the notice and hope it goes away. Instead, you will need to respond (or have your accountant do so) and mail Form 8606 to the IRS. Doing so "resolves the notice and closes the matter without further action or impact to the taxpayer," the CCH notice states. Of course, none of this means you avoid paying the regular taxes that you do owe in 2011 and 2012 on those Roth conversions done in 2010. If you converted a traditional IRA to a Roth in 2011, you also owed tax on that this year; and if you do a conversion this year, you will owe the tax on it next April. That all means that you will want to run the numbers closely - especially if you are paying quarterly estimated taxes - so that you are not surprised by the tax hit when it comes due.

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