Roseville + Sacramento Accountant and CPA for Physician Groups
As a physician, you possess a wealth of medical knowledge that you use to care for your patients in the best way possible. While providing your patients with excellent healthcare is your top priority, it is also necessary to understand the tax implications of operating a practice or collaborating with other doctors to open a practice. If you require accounting assistance for your medical practice, contact an experienced Roseville accountant for physician groups today. At Cook CPA Group, our accountants are dedicated to providing you with the unique financial services you require to operate your business efficiently. With various changes to the tax law in the previous years, it is important to ensure you understand your tax liabilities. To schedule a free consultation to discuss financial strategies for your business, contact Cook CPA Group at (916) 269-9281, or contact us online.
Tax Law Changes for PhysiciansDue to the Tax Cuts and Jobs Act (TCJA), there are several new regulations that doctors should know about that may affect their practice and their personal finances. Understanding the extent of these new tax law regulations will help you plan a financial strategy that works for you and your business. The following is a list of effects the TCJA had on tax laws for physicians.
Decreased Tax LiabilityA large number of doctors earn salaries in excess of $300,000 per year. If doctors that earn above $325,000 per year are married and have at least two children, they may be eligible to save thousands of dollars in federal income taxes. This could provide you with an increase in income that could be used for various other purposes.
Loss of DeductionsThe TCJA also affected the state and local income tax deductions (SALT deductions). Deductions are used to decrease a taxpayer’s tax liability. With the passing of the TCJA, SALT deductions have been capped at $10,000 for joint filers. This tax law change will have a greater impact in states like California that have high taxes as taxpayers will lose the SALT deductions they were accustomed to.
Federal Estate Tax IncreaseThe new tax regulation also increased the federal estate tax threshold to over $22 million. With this substantial threshold increase, there is an extremely low chance that the inheritors of a physician’s estate will have to pay taxes. This change will also affect other estate planning options like gifts that are distributed. These are just a few ways that the TCJA changes to tax laws are likely to affect physicians. To learn more about tax tips for physicians, you should continue reading and speak with an experienced California accountant for physicians.
Tax Tips for PhysiciansOutside of tax law changes initiated by the TCJA, there are various other tax tips that a physician should consider. For example, as the standard deduction for a married physician is likely to be $24,000, it may be wise to increase the value of your charitable donations. Consolidating your deductions can increase tax breaks. If you are a doctor that is married with children, you may also want to consider utilizing a section 529 plan. These plans have recently been changed to allow parents to provide for the education of children from grade K to 12. In some states, 529 plans allow for tax deductions on certain types of contributions to the plan. If you are considered a self-employed worker, you should also ensure that you are keeping track of your self-employment taxes. These taxes are paid to Social Security and Medicare programs to be used for disability and retirement programs. Workers who are employed typically have these taxes automatically withdrawn from their account. However, self-employed workers must withdraw these taxes from their earnings manually. Self-employment taxes are usually paid on a quarterly basis. The amount of taxes that must be paid depends on a taxpayer’s earnings in a particular quarter. Failure to pay self-employment taxes can result in a wide range of tax penalties. Cook CPA Group offers a variety of financial services to physicians and various other types of businesses. Our group of accountants can help you with any of the following issues:
- Analyzing statements and financial records
- Filing state and federal tax returns
- Utilizing tax deductions and tax credits
- Choosing a business structure for your medical practice
- Dealing with issues that arise from unfiled tax returns
- Preparing business tax audits