Sunday, July 11, 2010
Wasted Time = Donated Time = No Expense Deduction
Hi again June,
You were nice enough to answer my question on your blog a year or 2 ago, so I'm back with another that I hope you can help with.
I have a small consulting psychologist practice in Virginia; I help the State determine whether or not disability claimants are medically eligible for SSI benefits. The biggest occupational hazard I face is people who don't keep their appointments. I work in 2-hour blocks, and when they don't show, the state government, with whom I contract, pays me next to nothing for my trouble.
Question: can I write off the difference between the little the State pays me for those "no-shows", and what I WOULD have been paid if the patient HAD shown up, as a loss? If so, I have 25 years of amended tax returns to work on.
I realize that this may be a tax attorney question, but I thought the answer might benefit your readers.
Fairfax Station, VA
No tax attorney needed. This is one of those really-easy-to-answer questions with a you're-not-going-to-really-like answer.
Your time is not an expense and so it is not deductible. For tax purposes wasted time is treated the same as donated time. Check out my posts on the topic right here expenses -- donated services or products .
Suggestions: Find out why they miss appointments. Do they need transportation? Have an arrangement with someone to drive them to the appointment. Maybe that could be an indie business for a friend of yours.
Do they simply forget? Hire someone looking to work from home to call each client the week before, the day or evening before, and even the morning of to remind of the appointment. What you pay the person making the calls for you is a deduction for you. If you're married and your wife can do the calling as your employee, even better. Or if you have a child old enough for the responsibility, that would work too.
Another suggestion: Have work ready to do to fill the time of the no-shows. Things like research reading, recordkeeping, learning French.