5 Tips to Help Doctors Become “Tax Savvy” and Heal Thyself
“How to heal thyself”
Doctors have been subjected to some intense economic changes. Over the years they have been faced with Medicare and insurance reimbursement cutbacks, and steadily increasing every year costs for malpractice insurance, billing services, nurses, administrative staff, physician supplies and record keeping systems. With all of these issues, practicing medicine doesn’t look as good, at least as a business. What can be done to stop the bleeding? One way is to become a “tax savvy” doctor. The following are 5 tips to get you on your way.
- Choosing your form of business wisely. You can conduct your medical practice as a sole proprietorship, a partnership, a personal service corporation or an S corporation. Which one is right for you?
- Consider leasing rather than buying. Equipment leasing could offer financing and tax benefits that purchasing does not have.
- Maximize your retirement. There are many kinds of plans to choose from. The plan you choose will depend upon what type of entity you are, the number of employees you have, and the amount of retirement income the plan must provide.
- Keep a good set of books. You don’t want April 15th to sneak up on you and you are scrambling to find all of your receipts. This kind of accounting could lead to costly mistakes in the form of missed deductions. Missed deductions lead to higher taxes!
- Knowing the true meaning of April 15th. The only work on April 15th is the filing of your tax return. The real work is done during the year – PLANNING. Planning is what makes April 15th a breeze.
Depending on your personal tax situation, implementing these suggestions as well as others could help stop the bleeding and put you on your way of becoming a “tax savvy” doctor.