{"id":927,"date":"2013-02-26T16:09:44","date_gmt":"2013-02-26T16:09:44","guid":{"rendered":"http:\/\/vhfinancialmanagement.com\/?p=927"},"modified":"2013-02-26T16:09:44","modified_gmt":"2013-02-26T16:09:44","slug":"taxes-and-the-value-of-your-time","status":"publish","type":"post","link":"https:\/\/vhfinancialmanagement.com\/2013\/02\/26\/taxes-and-the-value-of-your-time","title":{"rendered":"Taxes and the Value of Your Time"},"content":{"rendered":"
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I have written in the past about the value of fully utilizing all deductions when it comes to income tax preparation. \u00a0The IRS will certainly come after you if you don\u2019t report all income, but the IRS will not hunt you down to let you know you missed a deduction.\u00a0\u00a0 It\u2019s your responsibility to put forth the time and effort, but with that being said, I\u2019m going to say something that may seem antithetical: Sometimes it\u2019s not worth your time or energy.<\/p>\n

Knowing where not<\/span> to look<\/p>\n

Not every deduction is worth your time and energy to substantiate and use.\u00a0 Sometimes I\u2019ve seen clients who have spent a great deal of time gathering information only to find out it\u2019s not allowable on their return.\u00a0 A good example of this issue comes in the form of medical expenses.\u00a0 Medical expenses are an allowable deduction after the expenses surpass 7.5% of your AGI (Adjusted Gross Income).\u00a0 This \u00a0AGI number increases to 10% in 2013 with The American Taxpayer Relief Act of 2012. So, spending a Sunday afternoon finding and organizing receipts only to find out it won\u2019t change your return is not a good use of your time.<\/p>\n

We are all busy.\u00a0 Utilizing our time to the best of our ability will make us happier, so knowing where not<\/span> to look is important.\u00a0 Another example of time not<\/span> well spent would be for charitable mileage.\u00a0 Did you even know that miles driven for charitable purposes are deductible? Sounds like a winner, right?<\/p>\n

The problem is charitable miles are deductible at 14 cents a mile. \u00a0Here\u2019s an example: If a taxpayer drove 1000 miles in 2012 related to charity, they would receive a $140 worth of deductible miles on their Sch A (itemized deductions).\u00a0 If this taxpayer is in the 25% tax bracket, their charitable mileage would equate to a $35 tax savings.<\/p>\n

Sure, if\u00a0you’ve\u00a0kept records throughout the year, it\u2019s an easy addition to the return to save that $35.\u00a0 But, if it requires a good deal of time and energy to put together the mileage log, it may not be worth your time.<\/p>\n

The next time you carve out an afternoon to compile that\u00a0shoe box\u00a0full of receipts into a manageable document for your taxes, think about whether or not it is worth the time.<\/p>\n

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