The Land of Ozz

It was really more like Sticky Fingers had Fred Thompson. Presidential candidate Fred Thompson made his rounds in the low country of South Carolina today with stops at a gun show and then a brief visit with supporters at Sticky Fingers in Summerville. I attended the rally at Sticky Fingers and got to hear Senator Thompson speak in person for the first time.

There were no ground breaking surprises in what Senator Thompson had to say today in Summerville, SC, but that is exactly the way he plans to keep things. Senator Thompson is grounded in strong conservative values unlike many of his republican opponents who could have easily switched parties and run on a democratic ticket due to their liberal views. Senator Thompson spoke of his strong support for the idea of appointing federal judges that will uphold the Constitution of the United States above their personal beliefs and prejudices. He ranked the presidential duties of appointing judges right up next to national security in terms of importance.

While appointing judges and national security rank high on Senator Thompson’s list of important presidential duties, it was the immigration issue that seemed to get the most attention today. This grates on my nerves a little since the immigration issues in this country have only been a big concern since September 11, 2001. A large portion of the general population of this country seems to have been put under some sort of hypnosis that makes them think that unsecured borders and illegal immigrants are closely tied to the events of 9/11. I will concede that immigration and border security are valid issues that a president should be concerned about, but in my opinion, these should not be the main issues that determine how people vote in 2008.  The root of the immigration issues did not crop up since 9/11 and will not be solved by the president alone. Unfortunately these issues seemed to be much more of a crowd pleaser than any other issues on the stump today.

I would like to have asked the Senator a few questions, but time and opportunity was not available for more than a few questions. I would like to have heard some specifics on the following:

• Given his experience in Hollywood and in Washington, elaborate on his publicly stated views on how he as president could help strengthen family values.
• What is the first thing he would do as president to help put money back into the hands of the American people the way SC did with the recent sales tax changes that netted my family of five almost enough tax savings to buy a month’s worth of groceries per year.

I have yet to see the heat get turned up on Senator Thompson’s lack of specifics regarding his Christian faith. Many of the front runners claim to be Christians and that may factor into the results here in the deep south when the primary day rolls around. Some big name players in the Christian community have questioned Thompson’s Christianity. I would certainly prefer that our president be a committed Christian. At the same time, I know plenty of self proclaiming Christians who are not qualified to be president of the United States of America. It is entirely possible that many of the presidential candidates are not true believers when they get out from in front of the camera. Regardless of how outspoken Senator Thompson is or not regard his faith, the fruits of his public service support his claims to uphold values that all of my Christian friends hold dear.

Senator Thompson has as good chance of winning SC in the up coming South Carolina Republican primary according to the most recent Rassmussen Poll. I hope my friends will follow my lead and vote for Senator Fred Thompson when the polls open in 2008.

A tip for you die hard shopping fans as we approach Black Friday.

Planned Cost - Sale Price = Savings

No plan to buy - Sale Price = Impulse Buy

A sale price on any item is only a sale price if you were planning to buy the item anyway.

It seems that there is a new tax law in South Carolina. The picture on the right shows a portion of the receipt my wife brought home from Wal-Mart this weekend. I was so shocked by the tax amount, or rather lack of tax, that I called the Wal-Mart store to ask if their registers were malfunctioning. The lady from the customer service center at the Goose Creek Wal-Mart enlightened me on a new tax law that removes the sales tax from our grocery bill.

This new tax code supposedly went into effect on November 1, 2007. Did it get buried on page 23 of section Q of the local paper? While I do not watch much TV, I would have expected to hear about this on the radio or maybe at work among the idle chatter. Is it possible that this tax cut came in so low under the local radar that no one even knows about it?

For a family that spends about $600 per month on groceries, this will help us to the tune of approximately $40 per month*. That is sweet. That is another date with my sweetie each month. If we share a “Tour of Italy” at Olive Garden and only drink water, we might even be able to squeeze out the sitter’s wages for a couple of hours. This tax savings will be put right back into the economy as far I our house is concerned. Thank you SC State Government!

*Note: Not all of our grocery budget is spent on unprepared food so the tax cut will only affect approximately 95% of our grocery budget. This sale tax change only applies to unprepared grocery items “that are eligible for purchase with US Department of Agriculture food coupons.” Source

How the IRS helps me save 50 cent per gallon on gas.

The time of year has arrived when many US employers kick off what we call in the civil service “Open Season”. This is a time of the year when employees are allowed to make benefit changes that may not be allowed at any other time during the year, with a few exceptions called qualifying life events. (i.e., death, birth, marriage, adoption, etc.) One of the most useful, but often overlooked optional benefits that many employers offer is the Health Care Flexible Spending Account. Through these accounts the IRS allows for tax payers to have money withdrawn from their paychecks pre-taxed to later be used to reimburse medical expenses. In 2003 the IRS extended the coverage of these accounts to include over the counter medications and medical supplies. Many employees avoid this program because they do not fully understand it and are scared of the possibility of loosing unused money. This is a valid concern, but in y opinion, those who avoid flexible spending accounts are leaving money on the table.

So what does a flexible spending account have to do with gas prices?

I am glad you asked. One of the allowed categories of medical expenses in the flexible spending account is called transportation. The general guidelines for the transportation category are as follows:

“You can include in medical expenses amounts paid for transportation primarily for, and essential to, medical care.

You can include:

• Bus, taxi, train, or plane fares or ambulance service,
• Transportation expenses of a parent who must go with a child who needs medical care,
• Transportation expenses of a nurse or other person who can give injections, medications, or other treatment required by a patient who is traveling to get medical care and is unable to travel alone, and
• Transportation expenses for regular visits to see a mentally ill dependent, if these visits are recommended as a part of treatment.

Car expenses. You can include out-of-pocket expenses, such as the cost of gas and oil, when you use a car for medical reasons. You cannot include depreciation, insurance, general repair, or maintenance expenses.” Source: IRS Publication 502

With this one benefit our family is able to offset our gas costs by an average of 50 cents per gallon based on $3 per gallon prices. I will add a disclaimer for our situation, but that does not take away from the fact that an average family can cut gas prices by 25 cents per gallon or more with a flexible spending account. My disclaimer is that our son Caden sees an above average number of doctors on a regular basis so our transportation expenses are more than double that of a normal family of the same size as ours. That said, I have broken out a separate line in my calculations to show how a “normal” family would be saving 25 cents per gallon on gas even if Caden had not seen so many doctors this year. The “extreme” column represents our situation with Caden’s appointments.

The IRS allows for 20 cents per mile to be reimbursed through the flexible spending accounts. I have included a little chart to show how much gas costs per mile based on a vehicle’s MPG rating and the price per gallon at the pump.

Below is how I calculate the 50 cents per gallon savings on the year. The numbers used here are based on six months worth of transportation expenses with an average of 16.5 miles one-way to our medical service providers. I used Google maps to determine the distances. We completed 55 trips for medical purposes at 33 miles round trip on average for a total of 1814 miles in approximately six months. (Shown below in the “Extreme” column) There were 29 trips averaging 28.6 miles not including Caden’s appointments. (Shown below in the “Normal” column)

You will notice that our adjusted price per gallon of gas price is now at $2.51 based on the original $3 per gallon purchase price.

There are a few notable items.

1. The better mileage your vehicle gets the more you will save per mile. I actually used conservative numbers for our car so the actual savings for us is well above 50 cents per gallon on the year.
2. The vehicle that my wife drives averages less than 10K miles per year of driving. The higher the percentage of miles driven for medical purposes will increase your savings. If your vehicle is used only for medical purposes, then you would likely end up making money.
3. Higher gas prices will mean less savings unless the IRS adjusts the mileage rate for 2008. The rate went up from 18 to 20 cents last year.
4. If you drive a vehicle that gets terrible mileage or if the price of gas goes up faster than the mileage rate, then you would be better off taking the actual expenses in reimbursement instead of the 20 cents per mile allowance.

Participation in a Health Care Flexible Spending Accounts should be approached with some caution. Any money put into the accounts pre-taxed must be used for expenses within the plan year or the money will be forfeited at the end of each year. I had planned to get an implant this year that was going to cost about $1800. The implant could not be scheduled this year so I ended up with $1800 more in my flex account than planned. This led me to start combing through the list of reimbursable items allowed by the IRS to see what I could use to retrieve some of my cash. The transportation expenses were a great discovery that I was not aware of even though I have been a faithful flex plan participant for more than 10 years. The transportation expense reimbursement along with regular co-pays, over the counter medications, deductibles, and other medical expenses is allowing for me to utilize the entire $2100 that I diverted into my flexible spending account pre-tax this year. My total tax savings will be as much as $588 based on a 28% tax.

I encourage you to investigate your benefits package to see if it includes a Health Care Flexible Spending Account. If you are already a member, then I hope you are making use of the transportation category to save you some cash on gas.

Today marks three years of blogging for me.  I began blogging on Caden’s Page on the day of Caden’s birth.  I did not know I was blogging at the time, but figured it out in rapid fashion.