Financial Beat

By Yvonne Chilik Wollenberg

The Internet: Don't rely on Web filters to screen the sleaze

Harried parents often count on Web filters to protect their kids from trashy Web sites. But the programs do a poor job of keeping out the bad stuff and letting in the good, according to Consumer Reports. Six filtering software programs allowed access to sites containing sexually explicit or violently graphic material, and those promoting drugs, tobacco, crime, or bigotry.

Cyber Snoop, which let 90 percent of objectionable sites through, and Net Nanny 4, which allowed access to 52 percent, received poor ratings for protection from Consumer Reports. Internet Guard Dog was rated fair, while Cyber Patrol, Cybersitter 2000, and Norton Internet Security were called "so-so."

A parental control feature offered to America Online subscribers did relatively well. AOL's Young Teen settings let only 14 percent of the inappropriate Web sites slip through, but it also blocked sites containing legitimate if potentially controversial material on topics such as sex education, abortion, and gun control. AOL's Mature Teen settings, designed for ages 16 and 17, weren't as effective, allowing access to 30 percent of the objectionable sites.

The best way to protect your kids is to supervise what they do online. You can check your child's recent activities by reviewing his browser's history list and bookmarks.

Schools and libraries may have to find effective ways of filtering Internet access under the Children's Internet Protection Act, which became law last December. If the law survives a challenge by free-speech advocates, libraries that don't comply would lose federal reimbursement for Internet access and other technology expenses.

Airlines: Delayed three hours? Have some free peanuts

More than one in four flights was delayed, canceled, or diverted last year, and experts say the next major crunch is just around the corner. Complicating matters, airlines' response to the situation has been less than laudable.

For example, Alaska Airlines was the best at providing passengers with adequate information about flight delays—but did so only 70 percent of the time, according to the US Department of Transportation's inspector general. The worst was Southwest Airlines, which made timely and accurate announcements just 38 percent of the time.

A growing number of delays happen on the tarmac, after the plane leaves the gate and waits in line for take-off. Passengers can be stranded for hours in an idling jet without access to airport services. So-called taxi-out times of one hour or more jumped 165 percent between 1995 and 2000.

And what do flight crews do with the passengers in these situations? Delta offers refreshments after a 45-minute onboard delay, and United and Alaska Airlines do so after 90 minutes; American Airlines passengers have to hold on for three hours. United hands out a high-energy bar, American supplies unspecified snacks, and American Trans Air pours a nonalcoholic beverage after one hour. Alaska provides free liquor after an hour.

At some point, the flight crews must consider meals. In general, what passengers get and when depends on the crew and what's available at the airport.

Taxes: Audits are getting rarer, but penalties remain high

For the third consecutive year, your chance of being audited by the Internal Revenue Service has dropped. Today it's less than one in 100, the lowest level in more than five years. Last year, the IRS audited only 0.49 percent of all tax returns and 0.96 percent of those for families with incomes of $100,000 or more. Just five years ago, the IRS examined more than 3 percent of high-income returns. The agency attributes the decline to staff reductions, increased workloads due to changes in tax laws, and aging computers.

"People need to remember that the IRS still has an extensive system to catch people who don't report their income," says IRS Commissioner Charles O. Rossotti.

For those caught fudging the numbers on their returns, the price can be steep. Extra taxes and penalties resulting from the simplest kind of tax audit average well over $3,000.

Charity: A more advantageous way to donate

or those inclined to give to charities, several brokers and fund families now offer the donor-advised fund—something like a mutual fund for charitable donations, with tax advantages attached.

You set up the account, donate a sum of money, decide who gets it and when, and take a tax deduction right now. The funds offer several advantages over donating directly to your favorite charities:

• You can write one check, then make several grants to different groups.

• You can delay granting money while you decide who the donee will be, but still get the immediate tax break. The money can accumulate interest, which will increase your gifts.

You can also donate stocks to your donor-advised fund, avoid the capital gains tax, grant the securities to a charity later on, but (as with a cash donation) take the deduction today.

Most funds allow you to open an account with $10,000, with minimum additional donations of $1,000 (exception: $5,000 at Vanguard). Minimum charitable grants are $250 to $500. Fees range from less than 1 percent to almost 3 percent of total assets. All grants are made in your name, unless you prefer anonymity.

Depending on your tax situation, you could be eligible to deduct cash contributions of up to 50 percent of your adjusted gross income, and deduct securities or mutual fund shares held for more than one year of up to 30 percent of adjusted gross income.

Donor-advised funds

The author is a freelance writer in Teaneck, NJ.

 

Yvonne Wollenberg. Financial Beat. Medical Economics 2001;7:14.