Buy Strattera No Prescription http://www.physiciansnews.com Tue, 07 Feb 2012 16:44:06 +0000 en hourly 1 http://wordpress.org/?v=3.2.1 Buy Strattera No Prescription http://www.physiciansnews.com/2011/12/13/year-end-2011-tax-planning-for-physicians/ http://www.physiciansnews.com/2011/12/13/year-end-2011-tax-planning-for-physicians/#comments Tue, 13 Dec 2011 15:15:24 +0000 Physicians News http://www.physiciansnews.com/?p=4483 [/caption] By Michael Kline, CPA As the year draws to a close, it is time for medical practices and medical professionals to review the current year’s financial activity and determine if any tax planning opportunities are available to help reduce their overall tax burden. Below are some tax planning tips that can be utilized before year-end that can greatly reduce your tax burden. Depreciation The biggest and easiest 2011 tax-saving opportunity is the accelerated depreciation available until the end of 2011. For many physicians, the purchasing of new equipment can give rise to large deductions in the year the equipment is purchased. Depreciation can be accelerated based on two available tax provisions: bonus depreciation and Section 179 expensing. Bonus depreciation. For qualified assets acquired and placed in service through Dec. 31, 2011, the additional first-year depreciation allowance is 100%. Among the assets that qualify are new tangible medical equipment, computers and off-the-shelf computer software. Additionally, some leased equipment may also qualify, depending on the terms of the lease. With a few exceptions, bonus depreciation is scheduled to drop to 50% in 2012. You may want to purchase and place in service qualifying assets by Dec. 31. Section 179 expensing. This election also allows a 100% deduction for the cost of acquiring qualified assets, but is subject to different rules than bonus depreciation. Unlike the bonus depreciation, used assets can qualify for Section 179 expensing. However, a couple of rules may make Section 179 expensing less beneficial for a medical practice:
  • For 2011, expensing is subject to an annual limit of $500,000, and this limit is phased out dollar for dollar if purchases exceed $2 million for the year. So larger medical practices may not benefit.
  • The election cannot reduce net income below zero. So for businesses that are having a bad year, it can’t be used to create or increase a net operating loss for tax purposes.
The expensing and asset purchase limits are scheduled to drop to $125,000 and $500,000, respectively, in 2012 (though both amounts will be indexed for inflation). Although taking bonus depreciation and/or Section 179 expensing deductions now gives you and your practice immediate deductions for your equipment purchases, it also means you are forgoing deductions that could otherwise be taken later as normal depreciation. In some situations, future deductions could be more valuable. For example, tax rates for individuals are scheduled to go up in 2013, which means flow-through entities, such as partnerships, limited liability companies and S corporations, might save more by deferring the deductions. Retirement plan contributions Many medical practices offer retirement contribution plans, such as 401(K) plans, for their employees. In 2011, the maximum amount that can be contributed by an employee is $16,500 and $22,000 for participants over 50 years old.  By adding a profit sharing plan in addition to a 401(K) plan, owners of medical practices can increase the amount contributed toward their retirement to $49,000.  Although the practice would need to make a contribution for all eligible employees, the plan may be able to be structured to allow most of the contribution by the practice to go the owners. Additionally, the contribution, while deductible on the 2011 tax returns, does not have to be paid until the due date of the practice’s tax return, including extension. Individuals: Income, expenses and AMT Traditional income tax planning calls for deferring income to the next year and accelerating expenses into the current year. This defers taxes to the next year, which generally is beneficial — as long as you’ll be subject to the same (or a lower) marginal rate. Because the 2010 Tax Relief Act extended lower rates through 2012, in 2011 you have the opportunity to take advantage of this traditional strategy (unless you expect to move into a higher tax bracket next year). Potentially controllable income and expense items include:
  • Bonuses or self-employment income
  • State and local income and real estate taxes
  • Mortgage interest
  • Charitable contributions
But this opportunity isn’t without a challenge. Before taking action to time income and expenses, you must consider the alternative minimum tax (AMT). It’s a separate tax system that limits some deductions and doesn’t permit others, such as for state and local income, and real estate taxes and miscellaneous itemized deductions. It also treats certain income items differently. You must calculate your tax liability under both the regular and the AMT systems, and pay the AMT if your AMT liability is higher. So without proper planning, deferring income or accelerating deductions could trigger the AMT or increase AMT liability this year or next. The acceleration of some deductions, such as state and local taxes and some unreimbursed business expenses, could provide you no tax benefit if you are subject to AMT tax. Further complicating matters is the fact that, unlike the regular tax system, the AMT system isn’t regularly adjusted for inflation. Instead, Congress must legislate any adjustments. Typically, it has done so in the form of a “patch.” Such a patch is in effect for 2011 but not for 2012. This makes planning for the AMT — and thus properly timing your income and deductions — especially challenging this year. Gifting and estate planning While estate planning won’t necessarily affect your income tax bill, it’s a good idea to also consider your estate planning goals as year-end approaches. For example, the annual exclusion allows you to gift up to $13,000 per year per recipient, gift-tax-free without using up any of your lifetime gift and estate tax exemptions. But unused exclusions don’t carry forward. For example, if you miss the Dec. 31 deadline for making an annual exclusion gift to a particular family member, you cannot make double the gift under the exclusion the next year to make up for it. Also consider the $5 million lifetime gift tax exemption. Although action by Dec. 31, 2011, isn’t required, action by Dec. 31, 2012, may well be. The exemption is scheduled to drop to $1 million on January 1, 2013. The $5 million exemption presents an unprecedented opportunity to transfer substantial wealth to your loved ones tax-free. It may be especially valuable if you are holding assets you expect to increase significantly in value. Making a gift now will remove not only the assets’ current value from your taxable estate, but also all future appreciation on them. Achieve your tax planning goals We’ve discussed only a few of the 2011 tax planning opportunities and challenges. And it’s possible that tax legislation could be signed into law between now and Jan. 1, 2012, that would extend expiring tax breaks or make other changes for 2012 that would affect your 2011 year-end strategies. Further, changes in the economy, the markets or your personal situation could also have an impact. It’s critical to review your tax situation now with your tax advisor and revisit it if anything changes. ### Michael J. Kline is a Certified Public Accountant. A partner in Citrin Cooperman’s Philadelphia office (www.citrincooperman.com), Kline is responsible for client service and quality control, and consults with clients on issues including ownership structure, entity decisions, audits, and multi-state tax and succession planning. Kline can be reached at mkline@citrincooperman.com or 215-545-4800.  ]]> http://www.physiciansnews.com/2011/12/13/year-end-2011-tax-planning-for-physicians/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2011/10/13/will-you-conquer-the-cash-crunch-in-retirement/ http://www.physiciansnews.com/2011/10/13/will-you-conquer-the-cash-crunch-in-retirement/#comments Thu, 13 Oct 2011 14:50:34 +0000 Physicians News http://www.physiciansnews.com/?p=4324 How to Meet the #1 Financial Challenge Facing Baby Boomer Physicians and Avoid Common Pitfalls By David Mandell, JD, MBA and Dinah Bird, Ph.D., CFP, CIMA Those of you born between 1946 and 1964 are part of the 77-million strong Baby Boomer generation – one that is now contemplating retirement. If you were born before 1946, you may already be retired or seriously considering it. If you fit into either of these groups, the following issue will be paramount for all of your financial decisions moving forward: “How do I take the wealth I have saved and efficiently turn it into cash income to sustain me during retirement?” No wonder, as the quote above makes clear, so many soon-to-be retirees are so worried about running out of money in their retirement. In this article, we will discuss problems with the solutions retirees typically rely on to generate cash income in their retirement and suggest alternatives that may be safer and more efficient. Conventional Wisdom on Generating Cash in Retirement “Conventional wisdom” suggests that financial planning for retirement should include various investment strategies for generating cash to live on. Let’s examine the leading strategies for generating cash and the significant risks inherent in each of them: 1. Periodically liquidate a portion of investments This technique is used in almost all retirees’ planning. It simply means periodically selling assets to generate cash to live on – whether those assets are in IRAs, personally-held securities and investments, real estate, the family home, business, etc. The problems with periodic liquidation are:
  • Risk #1: Market timing Timing the sale of an asset can be tricky, as many retirees can attest to in the aftermath of the stock market crash of 2008. The investment you are selling may be discounted 30 to 50 percent at the time you need to sell. Being stuck in a “liquidation only” strategy in market downturns can be dangerous.
  • Risk #2: Taxes When selling almost any asset, you will pay capital gains taxes at both the federal and state level. These taxes can eat up 25% of the gains. For distributions out of a qualified retirement plan or IRA, the tax bite can be as high as 45%! Relying solely or significantly on liquidation strategy means being subject to these taxes and to the risk that such rates will increase. Given that federal capital gains tax rates are at the lowest in their history, being subject to future tax increase is not a risk to overlook.
2. Allocate heavily to a ladder bond portfolio/ dividend producing stocks A laddered bond portfolio is a strategy commonly used by retirees whereby an investor purchases a group of bonds with different maturities, attempting to match cash flows with the demand for cash. One bond might mature in one year, another in three years, and the remaining bonds might mature in five-plus years. Each bond represents a different rung on the ladder.
  • Risk #1: Inflation As inflation goes up, the bonds in the laddered portfolio do not keep up with buying power. The bonds and their interest may pay the same, but the investor can purchase fewer goods with the same amount of money.
  • Risk # 2: Interest Rate As rates rise, the prices of a fixed rate bond will fall, and vice versa. Although bond laddering is a tried and true approach, consider the problems of allocating a substantial amount of money to a laddered portfolio in light of today’s interest rate environment and a seven year treasury paying 2.875%!
  • Risk #3: Market Timing/Downturns In terms of dividend-paying stocks, dividend pay outs are based on a percentage of the stock’s price. As the stock market fluctuates, so does the yield from the stock. The stock dividend will go down dollar-wise if the market takes a down turn -- just when the dividend is most needed.
3. Purchase an annuity The life annuity (not to be confused with the variable annuity) is designed by actuaries to pay interest and principal back to you over your lifetime. Essentially, you write an insurance company a check today and they pay you monthly, quarterly, or annually for the rest of your life (or the longer of your life and your spouse’s).  The benefits of this strategy include:
  1. The amount the insurance company pays you is “fixed” and will not decrease if the stock market crashes or if interest rates fall.
  2. Even if you outlive your life expectancy, the insurance company continues to pay you or your spouse for as long as you are alive.
However,  as interest rates have been at historic lows for a number of years, annuity payment rates are also extremely low.  This makes their internal rate of return (IRR) very poor.  As with any insurance product, the strength of the insurance company is also a risk. Since you may want payments for decades in the future, only the strongest carriers should be considered. Finally, the inflation risk to this technique also weakens its attractiveness. If inflation repeats itself like the early 1980s with the prime rate at 21% or even a reasonable 8%, then a 3% annual check from the annuity (not uncommon in today’s market) is not as attractive.  For these reasons, a life annuity can be part of a balanced cash income strategy, but it typically should not be heavily relied upon. Case Study: Abby the Allergist Abby is on the brink of retirement at 62. Abby has social security, a $1.2 million home near her four grandchildren, a 4% life annuity on a $500,000 policy, and an impressive 50/50 investment portfolio of stocks and bonds valued at $3 million that is a combination of her IRAs, 401(k)s and savings. Abby enjoys semi-annual vacations with her grandchildren but otherwise expects to easily live on $200,000 income per year during her retirement. She is in good health and, due to her family history, expects to live until the age of 90. Abby divorced many years ago and has no alimony liabilities. She has a long term care insurance policy that will pay her $10,000 annually. All is looking good for Abby’s retirement. Abby’s practice was bought out two years ago, and has decided to retire five years earlier than planned.  She considers this a safe decision, as she has a paid-off home, an annuity, long term care insurance and a $3 million 50/50 stock/bond portfolio. Despite retiring earlier than anticipated, she has planned well and is better positioned than 99% of Americans at retirement. Abby decides to keep her house to avoid selling at a loss. She forgoes a reversible mortgage because the “fees are outrageous.” Current inflation is benign at 1.7%, which is a nice advantage. She has the cushion of long term care if needed. Abby is living within her $200,000 per year budget. Abby’s meets her $200,000 annual cash needs by these income streams:
  1. Social Security                                    =  $30,000.00
  2. Annuity payments (4% of $500,000)                  =  $20,000.00
  3. Dividend payments from her 50% in stocks (2.00%)      =  $30.000.00
  4. Interest payments from her 50% bond ladder of 1-10 years,
Which has a blended yield of (3.00%)            =  $45,000.00 Total in flows            = $125,000.00 Abby’s two largest drains on her annual income are:
  1. Income tax     ($50,000.00)
  2. Property tax on her home     ($30,000.00)
Total out flows = (80,000.00) Netting out the outflows from the income, leaves a shortfall of $155,000 of cash. Abby will need to liquidate stocks and bonds in her investment portfolio to make up the shortfall of $155,000 for taxes and cash. Chances are very high she will have to liquidate some of her stock when the market is down due to normal stock market fluctuations. Consequently, Abby will have to sell even more stock to generate the appropriate amount of cash needed. Plus, there is a high probability that inflation will cause the price of her bonds to decrease as she liquidates them for cash. Abby’s investments will most likely not sustain her for the 28 year time horizon and her portfolio will be depleted before her death. Abby may very well experience the number one fear of retirees -- running out of money in retirement! Can Abby modify her investment liquidation strategy so she will not outlive her income? The Alternative Income solution can help Abby overcome this challenge. Instead of liquidating her portfolio of stocks and bonds for cash each year, Abby can add alternative cash income to her bond portfolio. By doing so, she will boost her income, provide an inflation hedge and liquidate less of her stocks/bonds, allowing her portfolio to grow. An alternative income strategy will help extend the life of her investment portfolio so she will have investments for as long as she lives. What is an ALTERNATIVE INCOME Strategy? “Traditional” investments are considered stocks, bonds, currency, or hard assets, such as real estate. An “alternative cash income strategy” is one that involves combinations of such assets to create a unique portfolio designed to generate cash income. REIT – Based Alternative Income Strategy One Alternative Income Strategy provides a diversified cash flow stream from hard assets that are in the form of an investment security called a Real Estate Investment Trust or REIT. The advantages of using REITs for forming a foundation of a cash-focused retirement strategy are:
  1. According to the law, at least 90 % of the cash flow streams generated from properties in the REITs must be passed to the owner/investor of the REIT.
  2. REITs can be an inflation hedge; as inflation increases, the property rents usually increase as does the value of the property.
  3. REITs typically offer a low correlation to the U.S. stock market, which means that REITs help decrease volatility.
A REIT-based Alternative Income strategy basically works like this: An investor buys into an REIT portfolio, which will generate about 6.5% income to supplement the money needed for expenses. Consequently, fewer securities are needed to be sold out of the retiree’s portfolio, which should generate more growth in their investments.  Adding REITs as an alternative income to a portfolio has the potential to augment conventional strategies by enhancing cash flows and extending the life of the retiree’s investment portfolio. Conclusion Generating income throughout retirement is a significant challenge. Common techniques, including asset liquidating, bonds, dividend-paying stocks and life annuities, all have significant risks associated with them.  Therefore, the use of alternative income techniques is often recommended to augment traditional techniques. ###   The information contained herein should not be construed as personalized investment advice. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security. You can contact the authors at (877) 656-4362 or through their website www.ojmgroup.com.    ]]> http://www.physiciansnews.com/2011/10/13/will-you-conquer-the-cash-crunch-in-retirement/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2011/09/27/how-to-survive-an-irs-audit/ http://www.physiciansnews.com/2011/09/27/how-to-survive-an-irs-audit/#comments Tue, 27 Sep 2011 17:12:39 +0000 Physicians News http://www.physiciansnews.com/?p=4286 By Michael Kline, CPA The mail gets delivered to your office and you immediately see the return address on the letter is from the Internal Revenue Service. You check the addressee and it is definitely addressed to you. Your heart starts to beat faster and your worst nightmare is about to come true: an IRS audit. The letter states that the IRS wants to examine your tax return which is followed by what seems to be an endless list of information you will need to provide to the IRS auditor. Should you receive one of these letters, the initial step is to contact your accountant. Chances are he or she has been through the process before. Your accountant should help ease any of your anxiety. If you choose to have your accountant handle the matter, then have him or her contact the IRS to arrange a time and place for the audit. It is always best not to have the IRS auditor perform the examination at your place of business because he or she may then be privy to information or conversations that may give the auditor reason for additional investigation. If possible, have the examination performed at your accountant’s office.  The IRS auditor may still request to visit your office to be sure it actually exists. During the initial conversation with the auditor, it is beneficial for you or your accountant to ask why your tax return was selected for examination. The answer may provide you with some insight into the area of your tax return that the auditor will be focusing on. Many times, however, the auditor will tell you it was a random selection. [caption id="attachment_4292" align="alignleft" width="150" caption="Michael Kline"][/caption] Once the date and place are agreed upon, it is time to compile the information requested by the auditor. This task can be incredibly easy, or excruciatingly difficult, depending on the level of organization of your business records; most are somewhere in between. [Sidebar: Using a computerized accounting system and keeping digital copies of your receipts for seven years can make this process much easier.] Most likely, the auditor will want a copy of your general ledger. The auditor will want to use this to select areas of your financial records to test. The auditor will test these areas by requesting documentation of your expenses, usually requesting invoices to match the expenditures reported on the tax return. Additionally, the auditor will request invoices for capital expenditures such as equipment or leasehold improvements. Gathering and organizing the requested information is clearly the most important step in the audit process. Your goal should be to compile all of the requested information in a complete and organized fashion. Most importantly, be aware of possible overstatements of expenses and understatements of income. Once you have gathered the requested information, it is very important that it is presented to the auditor in a clear and organized manner. This is one case where the book may be judged by its cover. If the information is provided to the auditor in an unorganized fashion, he or she may assume that your record keeping is not accurate. This may create cause for additional testing. You should also take time to compare your financial records to the tax return that is under examination. Many times the financial records no longer tie into the tax return because adjustments were made subsequent to the original filing. If they do not match, the auditor will immediately become skeptical of the accuracy of the financial information you are presenting. Performing this type of "self audit" can give you valuable insight into the accuracy of your practice's records. It will also give you time to reconcile or support all of the differences, before you meet with the auditor. There are two theories when meeting with the auditor. The first is to not let the auditor the least comfortable as possible, so he or she will leave the office as early as possible. The opposing view is "kill'em with kindness." Put the examiner in a comfortable setting where he or she can complete the audit. The former is more of a myth than a reality. The examiner needs to complete all of the procedures, and the condition of the space provided will, most likely, not influence the result and may have the opposite effect. Therefore, it is advisable to treat the auditor as you would any guest in your or your accountant’s place of business. You and your accountant should also be present at the initial audit meeting. This will consist of the auditor completing a lengthy questionnaire with your input. The questionnaire is used by the auditor to understand the accounting methods used to track income and expenses for your practice. In this meeting, you should act as if you are a witness on the stand in a legal trial and only answer the questions that are asked, with factual information that is relevant to the question. If the question requires a yes or no answer, than that is how you should respond. Many times, individuals elaborate on the questions asked and the auditor uses this information to expand their audit to additional areas where they may suspect issues exist. Your accountant should answer as many questions as possible. The accountant’s training and experience provides an understanding as to why the questions are being asked and the truthful answers that will not raise additional issues. After the auditor has completed the audit of the materials and information provided, he or she will meet with you and your accountant again. At this point, you will be able to respond to any identified issues.  You should make every effort to locate information that will satisfy the auditor’s preliminary findings.  You may not be able to find the specific invoice or bill the auditor requested. Therefore, you need to determine if there is other information that may appease the request. For instance, if you are missing an invoice for the purchase of medical supplies, you may be able to present the delivery slip or a duplicate invoice obtained from the vendor. It is always easier to resolve issues with the auditor rather than with his manager or an appeals officer. Thus, you should make every effort to continue the dialogue with the auditor to determine if there is any other information you can provide to satisfy the questions raised. Depending on the final findings of the auditor, one of two things will happen: you will accept the findings or challenge them. Either way, you will have survived the initial audit. Keep in mind, good accounting practices and organized records will make an IRS exam much easier to survive.  As they say, an ounce of prevention…. About the Author: Michael J. Kline is a Certified Public Accountant. A partner in Citrin Cooperman’s Philadelphia office (www.citrincooperman.com), Kline is responsible for client service and quality control, and consults with clients on issues including ownership structure, entity decisions, audits, and multi-state tax and succession planning. Kline can be reached at mkline@citrincooperman.com or 215-545-4800.    ]]> http://www.physiciansnews.com/2011/09/27/how-to-survive-an-irs-audit/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2011/08/09/keeping-your-investments-on-track-throughout-your-career/ http://www.physiciansnews.com/2011/08/09/keeping-your-investments-on-track-throughout-your-career/#comments Tue, 09 Aug 2011 23:50:22 +0000 Physicians News http://www.physiciansnews.com/?p=4209 By Peter Rohr Physicians, much like lawyers and business leaders, face different financial needs as they progress through their career. From finishing medical school to joining a practice, having years of productivity and ultimately retiring, each phase presents its own set of unique financial needs and challenges. However, a common thread is evident through each phase; it’s never too early to start planning for your financial future to help ensure long-term success. Strategizing Debt and Saving for Your Future Although six years of medical school tuition is an investment with good return over the long-term, many recent graduates find themselves battling sky-high student loans. Thus, it’s important to have a strategy in place for tackling debt post-graduation. Your financial advisor can ensure that your financial strategy takes into account the debt that you must pay down, while allowing you to meet your other short-term financial needs, positioning you for long-term financial growth. As you are establishing your career, it is also important to think ahead to your future and start saving for retirement. One way to do this is to take advantage of the retirement contribution program and benefits made available through your practice. Everyone’s risk tolerance and budgetary needs are different, so work with your financial advisor to find the most appropriate way for you to pay down debt, and the right asset allocation to help you invest for the future. Of course, asset allocation does not assure a profit or protect against loss in declining markets.  Remember, investment products are not FDIC-insured, not bank guaranteed and may lose money. Building Your Career – and Financial Security For physicians focused on building their practice, personal time can be hard to come by. But paying close attention to your finances throughout your career is critical to achieving your long-term goals, and a financial advisor can help you stay focused and on-track. Indeed, according to the January 2011 Merrill Lynch Affluent Insights Survey (MLAIS), when asked the number one piece of long-term saving and investing advice they would give their 30-year-old-self, 34 percent of affluent Philadelphians recommended working with a financial advisor or working with one earlier in life. The highly demanding life of a physician leaves little time to think about the importance of a financial portfolio and ways to balance expenses with other financial obligations. While furthering your career, you may also be raising a young family, saving for a child’s education, looking to buy a second home, and traveling.  In order to plan properly, it’s important to incorporate all of these expenses into your overall financial strategy. As with tending to your personal finances, it is also important to create a balanced financial strategy for your practice. You need to consider how to balance the budget in order to support the medical associates who have joined your group, all the while keeping in mind the long-term plans for the practice. Creating a budget and setting financial goals, for both your personal and professional life, can help you prioritize your financial needs and set a foundation for your financial future. Working together with a professional who understands your financial concerns and priorities, and who can help guide your overall financial strategy, will allow you to focus on your career aspirations. Planning for a Transition Transitioning out of the practice can be intimidating and emotional for physicians – but the earlier you plan, the smoother the path can be. Consider your options a few years before you are ready to pass the baton – who will take the reins?  Passing your practice to trusted younger physicians can help you feel that your legacy will be in good hands. Consider how involved you will be in the practice during your last years practicing and how you would like to the transition to occur.  There is no need for an abrupt exit; the transition into retirement can be a gradual process that takes place over time. With retirement on the horizon, creating a strategy that best meets the needs of your practice as well as of your personal finances will allow you to gracefully transition into your future. Retirement Your Way According to the MLAIS, 88 percent of Philadelphia’s affluent believe their retirement will differ from that of their parents. In fact, more than half plan to continue working during what would normally be considered their retirement years, and 30 percent plan to relocate to another city. This suggests that for many, “retirement” may be an active time, full of adventure, education – possibly even a second career. And this requires careful planning in terms of finances.  Put a strategy in place and start putting money away for retirement early. As you get deeper into your career, set specific goals for investing – consider how much you’ll need to live the lifestyle you want, and what your personal goals will be during these years. In order to live the retirement life you have dreamed of, it’s important to plan early. In addition to planning ahead in order to support your lifestyle in retirement, it’s important to consider unforeseen expenses that may arise when developing your financial strategy. For example, as a physician you spend your career focusing on healthcare for others, but it is also important to consider your own healthcare needs during retirement.  According to the U.S. Department of Health and Human Services, 70 percent of people older than 65 will eventually need some sort of long-term care. In order to be prepared, your financial advisor can help you understand the options available to maximize your payments during retirement. No matter what phase of your career you are in, it’s never too late to start planning for the next step. Working closely with a financial advisor as you transition through each stage of your career can help you develop a sound financial  roadmap for your future, both professionally and personally, allowing you to reap the benefits of your hard work over the years. ### Peter A. Rohr is a Managing Director-Investments and Private Wealth Advisor with the Private Banking and Investment Group at Merrill Lynch which operates through Merrill Lynch, Pierce, Fenner & Smith, Incorporated, a registered broker-dealer and Member SIPC. He can be reached in Philadelphia at (215) 587-4731 or peter_rohr@ml.com.    ]]> http://www.physiciansnews.com/2011/08/09/keeping-your-investments-on-track-throughout-your-career/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2011/04/11/health-care-reform%e2%80%99s-tax-increases-what-it-means-for-you-what-you-can-do-about-it/ http://www.physiciansnews.com/2011/04/11/health-care-reform%e2%80%99s-tax-increases-what-it-means-for-you-what-you-can-do-about-it/#comments Mon, 11 Apr 2011 14:40:02 +0000 Physicians News http://www.physiciansnews.com/?p=4017 [/caption] Introduction There is little doubt that every physician in the U.S. has an opinion on the 2010 healthcare legislation and its impact on medical care in this country.  We are sure you do.  What is less clear is whether or not most physicians understand the tax ramifications of the new law.   While some newly elected and re-elected members of Congress have pledged to do away with this legislation, President Obama seems equally as set on making sure the new law remains on the books.  In this article, we will lay out the most significant tax provisions of the healthcare law and make some suggestions about ways to reduce the tax impact on you assuming the legislation stays intact. 1. Higher Medicare taxes on high-income taxpayers. High-income taxpayers will be hit with a double whammy under the new law: a tax increase on wages and a new levy on investments. Higher Medicare payroll tax on wages. Under current law, wages are subject to a 2.9% Medicare payroll tax. Workers and employers pay 1.45% each. Self-employed people pay both halves of the tax (but are allowed to deduct half of this amount for income tax purposes). Unlike the payroll tax for Social Security, which applies to earnings up to an annual ceiling ($106,800 for 2010), the Medicare tax is levied on all of a worker's wages without limit. Under the provisions of the new law, which take effect in 2013, most taxpayers will continue to pay the 1.45% Medicare hospital insurance tax, but single people earning more than $200,0000 and married couples earning more than $250,000 will be taxed at an additional 0.9% (2.35% in total) on the excess over those base amounts. This includes nearly all physicians, obviously.  Self-employed persons will pay 3.8% on earnings over the threshold. Married couples with combined incomes approaching $250,000 will have to keep tabs on their spouses' pay to avoid an unexpected tax bill. It should also be noted that the $200,000/$250,000 thresholds are not indexed for inflation, so it is likely that more and more people will be subject to the higher taxes in coming years. Medicare payroll tax extended to investments. Under current law, the Medicare payroll tax only applies to wages. Beginning in 2013, a Medicare tax will, for the first time, be applied to investment income. A new 3.8% tax will be imposed on net investment income of single taxpayers with AGI above $200,000 and joint filers over $250,000 (unindexed). Net investment income is interest, dividends, royalties, rents, gross income from a trade or business involving passive activities, and net gain from disposition of property (other than property held in a trade or business). Because the new tax on investment income won't take effect for three years, it leaves more time for Congress and the IRS to tinker with it. So we can expect lots of refinements and “clarifications” between now and when the tax is actually rolled out in 2013.

2. Planning opportunities

The following potential planning opportunities should be considered to reduce the tax bite these new rules might have on your practice and personal taxes: ·    To reduce the impact of the increasing Medicare taxes on wages, physicians should strongly consider using multiple legal entities at their practice, so as to manage how they are paid income and how that income will be taxed. · The 3.8% investment surtax does not apply to distributions from IRAs and other qualified retirement plans. Thus, taxpayers may wish to increase contributions to IRAs and 401(k), 403(b) and 457 plans.  However, consideration should be given to the fact that we are facing periods of rising tax rates and distributions from such plans are subject to tax. ·    The 3.8% investment surtax does not apply to distributions from Roth IRAs.  Roth distributions also are not taxable, and taxpayers at any income level are able to convert traditional IRA’s to Roth IRA’s effective this year. ·    Because income from tax exempt and tax deferred vehicles like municipal bonds, tax deferred non-qualified annuities, life insurance, and non-qualified deferred compensation are not included in investment income, investments in these vehicles should become more favorable relative to investments producing income subject to the tax. ·    Charitable remainder trusts should become more appealing because they permit taxpayers to defer income over a period of time, enabling them to stay under the threshold amount. ·    Charitable lead trusts will become more popular to shift investment income to a CLT which in turn will be offset by the "above the line" charitable deduction. ·    Installment sales will be popular to even out income over a number of years. ·    Roth IRA conversions will be considerably more favorable because they will generally lower future MAGI thereby avoiding the surtax. Tax planning for investment income will become even more critical.  Evaluating the tax drag on investments takes on a new meaning in light of the increased surtax on investment income.  In addition, income streams which are non-taxable become even more valuable.  Hybrid benefits plans and investments in cash value life insurance policies which can provide tax free income streams will help taxpayers avoid the surtax.

3. Floor on medical expenses deduction raised from 7.5% of adjusted gross income (AGI) to 10%. Under current law, taxpayers can take an itemized deduction for unreimbursed medical expenses for regular income tax purposes only to the extent that those expenses exceed 7.5% of the taxpayer's AGI. The new law raises the floor beneath itemized medical expense deductions from 7.5% of AGI to 10%, effective for tax years beginning after Dec. 31, 2012. The AGI floor for individuals age 65 and older (and their spouses) will remain unchanged at 7.5% through 2016.

This change makes it even more important for business owners and professionals to consider health and medical related planning that often can be enhanced through the use of C-corporations – an under-utilized entity for medical practices.

4. Limit reimbursement of over-the-counter medications from HSAs, FSAs, and MSAs.The new law excludes the costs for over-the-counter drugs not prescribed by a doctor from being reimbursed through a health reimbursement account (HRA) or health flexible savings accounts (FSAs) and from being reimbursed on a tax-free basis through a health savings account (HSA) or Archer Medical Savings Account (MSA), effective for tax years beginning after Dec. 31, 2010.

5. Increased penalties on nonqualified distributions from HSAs and Archer MSAs. The new law increases the tax on distributions from a health savings account or an Archer MSA that are not used for qualified medical expenses to 20% (from 10% for HSAs and from 15% for Archer MSAs) of the disbursed amount, effective for distributions made after Dec. 31, 2010.

Conclusion: tax planning more important than ever Above are just a few of the tax changes the healthcare law enacted.  In addition, with tax rates due to rise as sunset provisions take effect along with the tax increases above, high income taxpayers – like physicians -- can no longer afford to “sit back and do nothing” when it comes to entity structure planning, tax planning and retirement planning. David B. Mandell, JD, MBA is an attorney, author of 5 books for doctors, and principal of the financial consulting firm O’Dell Jarvis Mandell LLC, where Carole C. Foos, CPA works as a CPA and tax consultant. They can be reached at Mandell@ojmgroup,com or (877) 656-4362.  ]]> http://www.physiciansnews.com/2011/04/11/health-care-reform%e2%80%99s-tax-increases-what-it-means-for-you-what-you-can-do-about-it/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2011/01/14/doctors-betrayed-by-traditional-financial-strategies/ http://www.physiciansnews.com/2011/01/14/doctors-betrayed-by-traditional-financial-strategies/#comments Fri, 14 Jan 2011 15:10:04 +0000 Physicians News http://www.physiciansnews.com/?p=3844 piggy bankBy Christopher R. Jarvis, MBA and David B. Mandell, JD, MBA

According to the US Census Bureau, the average American family earns less than $49,000.  To become a large national firm in the fields of law, accounting, investments and insurance, you MUST deliver services, products and strategies that can be replicated millions and millions of times.  Before you can understand why MOST strategies and services are bad for doctors, you must understand the dynamic of the “Average American,” for whom these products and services are ideally meant to benefit from them. Most legal, accounting, insurance and investment strategies have been created for:
  1. The average American family whose annual income tax liability is less than 12%.
  2. The 98% of American families who will NEVER owe any estate taxes.
  3. An employee, not an employer, who will likely never be sued and who has no control over the choice of legal entity or type of retirement vehicles the employer will utilize.
  4. Someone whose income is based on productivity, NOT government regulation.
If the four statements above sound like your life, then “Off the rack” planning at most firms is likely sufficient for your needs.  For most doctors, most if not all of these characteristics are not true. As authors of books and articles, we regularly interact with publishers, editors and talk show hosts.  Radio and television stations, book & magazine publishers, and internet content editors are looking for content for their “average” reader.  In general, they fear that providing content generated for few high-income readers will “alienate” their average readers and the advertisers who pay good money to reach a specific audience.  Practically, what this means for physicians is: Financial and legal advice you get from print and online media and from large national firms is most likely not appropriate for physicians! Doctors who follow advice that is generated for the masses and doesn’t take into consideration their unique challenges should see themselves as the patient who focuses on the results of his own 10-minute internet search over the specialist’s educated diagnosis based on decades of experience and the results of a personal exam and test results. There is no profession with as large a set of unique challenges as physicians face. For this reason, it is imperative that doctors look for advisors who spend the majority of their time working with physicians.  To take it a step further, if you are a high liability or high income specialist, you will want to work with a team of advisors who are acutely aware of these additional challenges.  For example, an obstetrician has a much greater need for asset protection than a pediatrician and a surgery center owner has much greater tax challenges than a primary care doctor. Conventional Wisdom is Not Your Friend. In the beginning of the article, we pointed out what characteristics are common for US taxpayers.  Solutions that are widely-accepted in the media and by advisors are generally tools that work for these people.  One hurdle that advisors who specialize in helping high-income doctors face is the fact that the solutions we (as a group) espouse are appropriate for less than 1% of the families in the country.  For that reason, doctors who insist on only implementing strategies they have heard over and over again in the media and from their colleagues will miss out on valuable opportunities. Once you embrace the fact that you are different and require “different” planning than your neighbors, you will have taken one very significant step to significantly improving your financial situation. In the rest of this article, and in Part 2 of this article (which will be published next month) will share a few examples of common mistakes physicians make when listening to bad, but common, advice.  These include: Mistake #1 – “You Don’t Need a Corporation for Your Medical Practice.” Despite what your CPA may say, in most cases the cost and aggravation of creating and maintaining a corporation (or in many cases, two corporations for most medical practices) are insignificant relative to the asset protection and tax benefits corporations offers physicians.  With recent tax law changes and with many new proposals we will see over the next year, the benefits will be compounded.  Though these corporate solutions can reduce taxes by $5,000 to $50,000 per year for the doctor, these particular strategies are outside the scope of this two-part article. Mistake #2 –Owning Anything in Your Name, Spouse’s Name of Jointly with Your Spouse! We acknowledge that owning assets in your own name or jointly with a spouse are the most common ownership structures for real estate and bank accounts.  This is okay for 95% of Americans. Hopefully, by now, you realize that you are NOT in that common group.  You have potential lawsuit risk, probate fee liability, and estate tax risks that over 95% of the population do not have.  If you don’t want to unnecessarily lose assets to lawsuits or taxes or accidentally disinherit children, you need to consider alternative ownership structures.  Something as simple as a living trust or a limited liability company can often solve these problems. Mistake #3 – Wasting Time and Money on Qualified Retirement Plans. This is perhaps the single most important area of planning for doctors to address once they understand that they are different.  Typical retirement plans are great for rank-and-file employees because they force employees to put away funds for retirement. Employers may match some percentage of employee contributions (which is free money for the employee).  The investment grows tax-free until funds are accessed in retirement (when the employee is living on modest Social Security and these retirement plan funds. As “the employer,” there is no “free money” for you as all the money that ends up in your plan account was yours to begin with.  In fact, you are responsible for those matching contributions so the retirement plan does have some “friction” for you if you want to make any reasonable contribution on your own behalf.  On top of that, you will not be living on $25,000 to $50,000 in retirement like your employees will.  You will have taxable investments, much larger retirement plan contributions and greater Social Security income (maybe).  In any case, you will be paying very significant tax on your retirement plan withdrawals.  Do you think that tax rates will be lower than they are now when you retire? With rising costs for employees and a possibility that you may actually withdraw funds from your retirement plans at a HIGHER tax rate then the one you received for the original deduction, the real benefit of retirement plans comes into question.  When you add the potential costs and aggravation of complying with ERISA, Department of Labor and tax laws surrounding retirement plans, AND the fact that any unused retirement plan balances will be taxed at rates up to 80%, you may find that retirement plans are not all they are cracked up to be.  A growing trend among successful doctors is to implement non-qualified planning alternatives instead of traditional retirement plans. Suggestion: Use a BETTER Retirement Plan to Support Your Retirement. Non-traditional planning can offer higher income physicians opportunities to contribute significantly larger annual contributions. Whether you are using non-qualified plans, “hybrid” plans, or even a tool primarily designed for risk management benefits, like a captive insurance company, you could possibly deduct $100,000 to $1,000,000 or more annually.   Most of these tools allow you access to the funds before 59½, will not force you to take withdrawals at age 70½ if you don’t need the money, and will not be taxed at rates up to 70% or 80% when you pass away.  For these reasons, savvy doctors utilize nontraditional plans more than traditional retirement plans. Note: Non-qualified or “hybrid” plans vary significantly in their design, their scope, and their applicability. Some plans work great for smaller practices with one or two partners. Others work best in practices with 3 to 20 partners.  Still others may work best for the larger practices. Risk #4 – Paying Full Price when the Government Offers to Pay Half. Technically, the government (Internal Revenue Service) is not paying half of anything. However, if they offer you a tax deduction and your combined state, federal and local marginal tax rate is close to 50%, you can think of a tax-deductible purchase as being ½ as expensive for you because the government will allow you to deduct this purchase. You must realize that nearly 50% of Americans do not pay any federal income tax (Source: IRS). In 2009, Exxon boasted $45 billion of profit to its shareholders – with $0 of US income taxes paid.  You can either look to advisors who can help you legally reduce any unnecessary taxes or you can let the system for everyone else but you.  Let’s look at an example of one simple way to use tax laws to your benefit. Suggestion – Deduct Long Term Care insurance (LTCi) through your Practice. Over 60% of American households will require some sort of Long Term Care assistance.  Doctors, more than any other segment of the population, realize that longer life expectancies and skyrocketing medical costs significantly increase the probability of a family facing an illness with devastating financial consequences. Without a shifting of risk through a long term care insurance policy, you will have to pay for this assistance from your savings.  You can cover your spouse through the practice even if you are not both physicians or employees.  If you are a C corporation, you may receive a tax deduction for 100% of the premiums and can pay all of the premiums over a 10-year period to take advantage of the deductions during your prime earning years (when the deductions are most valuable.). By paying premiums over a short period of time, you will ensure that you will not have unexpected expenses for this insurance once in retirement. Unlike traditional retirement plans where contributions that are tax-deductible and benefits are taxable, Long Term Care insurance premiums can be tax-deductible and the benefits are 100% tax-free. There are also non-traditional benefit plans that also allow physicians to make contributions of $100,000 or more per year, discriminate to only include the doctors or key employees, and access the funds before age 59½ without penalty.  These plans can be set up to be very important pieces of a family’s estate plan without sacrificing tax deductions or control of the assets by the doctor.  For further information on these plans that are beyond the scope of this article, please contact the authors at (877) 656-4362 or Mandell@ojmgroup.com. Mistake #5 – Wasting Money on Taxes and Term Insurance Premiums. A famous female financial advisor with her own TV show is one of many advisors to tout, “Buy term insurance and invest the difference.”  This is excellent advice for the “Average American” family who earns $49,000 per year, pays 12% in federal income taxes, and has no potential liability or estate tax risk whatsoever.  This is a perfect example of good advice for most people being terrible advice for high-income specialists. Most Americans pay very little tax on investment income and don’t care about asset protection, so the advice to disregard the tax-free accumulation and creditor protection benefits of cash value life insurance to maximize taxable investment accounts is fine…for those people.  Beyond  temporary income protection against the premature death of the breadwinner, the Average American has little need for cash value life insurance.  If you have the following characteristics:
  • I have no concern over lawsuits against me, my partners, my employees or my family.
  • I am not worried about 23% to 47% of my investment income going to taxes.
  • I don’t mind 40%-70% of certain assets in my estate going to taxes when I die.
Does this sound like the typical physician situation?  Of course, it doesn’t. These completely different characteristics clearly illustrate how “Off the Rack” planning that is widely accepted by the media and the general population may not adequately help doctors address their unique challenges. Suggestion – Buy Cash Value Life Insurance for Tax-Savings and Asset Protection. If you are skeptical of this advice, ask yourself whether you are skeptical because you did the calculations yourself (or reviewed a careful analysis by an expert) or because you have heard, “Buy term insurance and invest the difference” so many times that you have just accepted it as fact. In our firm, we have advisors with MBAs in finance, CPAs, CFPs, and other financially-savvy experts. To spare you the pain of a long mathematical proof, let us offer the following simplified analysis.
  1. Mutual funds growing at 8% (taxable) are worth 5%-6% (after taxes) to high income taxpayers like you and worth 7% or more to Average Americans.
  2. Investment gains within cash value life insurance policies are not taxed.
  3. For relatively healthy insureds, the annualized cost of all internal expenses within a life insurance policy range from 1% to 1.5%.
  4. For families in high marginal tax brackets, the cost of the insurance policy is less than the cost of taxes on the same investment gains within mutual funds.
Without even factoring in the cost of the term insurance (which would reduce the total amount in the mutual fund portfolio), the cash value insurance investment outperforms buying term insurance and investing the difference.  Yet another benefit is that life insurance is protected from creditors, and even from bankruptcy creditors, in many states.  This is a benefit that may interest a physician family, but be seen as worthless to Average American families who have no real financial threat of a lawsuit. EXAMPLE: Consider a 45-year-old healthy male who wants to invest $25,000 per year for 15 years before retirement and then withdraw funds from ages 61 to 90.  Assume this individual’s tax rate on investments is 31% (50% from long term gains and dividends, 50% from short term gains, plus 6% state tax). Assume the gross pretax return of both taxable mutual fund investments and cash value life insurance are 8% per year.
  • The individual who invests in mutual funds on a taxable basis will be able to withdraw $37,000 per year after taxes (without factoring in the costs of purchasing ANY term life insurance or the cost of creating legal structures for asset protection – which a doctor may need to do to protect assets from lawsuits).
  • The individual who invests in cash value life insurance withdraws $42,500 per year (no taxes on policy withdrawals and loans) and has $1,000,000 of life insurance protection.
In the example above, it is obvious that buying term and investing the difference in taxable investments WAS NOT BETTER than investing in tax-efficient life insurance for a highly compensated physician in a high tax bracket. David Mandell, JD, MBA is an attorney, lecturer, and author of five books for physicians. Christopher Jarvis is an MBA with over 15 years of consulting experience. They are both principals of the financial consulting firm O’Dell Jarvis Mandell LLC. This article contains general information that is not suitable for everyone.  The information contained herein should not be construed as personalized investment or tax advice.   You should seek professional tax and legal advice before implementing any strategy discussed herein. The authors welcome your questions. You can contact them at (877) 656-4362 or through their website www.ojmgroup.com. ]]> http://www.physiciansnews.com/2011/01/14/doctors-betrayed-by-traditional-financial-strategies/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2011/01/05/smart-giving-for-tough-times/ http://www.physiciansnews.com/2011/01/05/smart-giving-for-tough-times/#comments Wed, 05 Jan 2011 16:44:26 +0000 Physicians News http://www.physiciansnews.com/?p=3820 RohrBy Peter Rohr For the many Americans who find great joy in charitable giving, the recent economic recession has made it more difficult to support the causes they care about. According to the Merrill Lynch Affluent Insights Quarterly (MLAIQ), a Merrill Lynch Wealth Management survey about the financial concerns and priorities of affluent investors in Philadelphia and across the country, 41 percent of local affluent investors are concerned about their ability to continue to support their philanthropic priorities. Nationally, charitable giving is down slightly compared to last year, 3.6 percent according to the Giving USA Foundation.[1] However, high-net-worth households remain committed to supporting the causes and communities they feel passionate about, with 98 percent of wealthy households donating to charitable causes in 2009[2]. This promising statistic shows that while the recent recession has presented donors with a challenging backdrop in which to give, there are ways to support charitable causes without sacrificing personal financial security. Typically, donors tend to make a check out to a specific charity. This is the simplest and most direct form of giving. However, increasingly, wealthy donors are no longer content with simply penning a check to their desired charity; they prefer a higher degree of accountability from non-profits as well as control over the giving process. Donors are also considering a more strategic approach to the types of financial assets that are used to fund their philanthropy. More and more, philanthropic strategy has become an important element of total wealth management, and many donors may be looking for ways to reduce income and estate taxes and seek greater control over the giving process.  Outlined below are a few creative ways for individuals to make smart charitable contributions in today’s economy. Giving Later, Versus Now One way to support an educational institution while ensuring you have the cash you need now is to work charitable giving into your retirement plan. Many doctors, for example, have accumulated more assets in a qualified retirement plan than they expect to need. At the same time, many investors are looking for ways to give to their alma maters – whether it’s their college or medical school. To achieve the dual goals of saving for retirement and making charitable donations, investors who have substantial retirement accounts should consider an IRA. Assets within an IRA can be assigned to various beneficiaries, who receive them when the donor’s estate is settled and the will is filed or probated. Investors can allocate part of an IRA to their alma mater, while designating a child or family member as the contingent beneficiary. This mechanism ensures that investors have the money they need stowed away in their IRA through retirement, while still ensuring that the designated school receives monetary support after their death. Additionally, gifts from an IRA are considered charitable donations, so the donor is able to provide a large gift tax free that originally would have been taxed if held onto by the donor. Supporting a Lifetime of Major Donations Many schools’ fundraising efforts rely on substantial annual donations from a small group of affluent givers. Many times, however, when these major donors pass away, the institutions lose their ongoing support. To ensure their schools continue to receive support even after they are gone, individuals are increasingly committing to “Challenge Gifts.” In this model, an individual agrees to donate a predetermined amount of money to an educational institution, provided that each graduating class, or a decade of graduating classes, achieves a designated participation level in the school’s annual giving fund.  Rather than relying on large gifts from a few donors, this model encourages a wider range of people to give whatever they can and provides continued financial stability for an institution.  Additionally this model affords donors more flexibility because they no longer need to bear the pressure of being the primary donors for a select college or medical school– rather it relies on the combined efforts of a group of donors, which is preferable in a recessionary environment. Make a Plan and Keep on Giving When planning your charitable giving strategy, it’s important to look at your financial life holistically, including your short-term expenses and long-term goals. With a holistic view of your entire financial life, it should be easier for you and your financial advisor to be able to identify opportunities to support the causes and communities you care about, even during a downturn in the economy. According to the MLAIQ survey, 87 percent of affluent investors in Philadelphia are confident that their financial picture will improve in the year ahead, which may mean more opportunities for local investors to make a difference in our community. ### Peter A. Rohr, Senior Vice President–Investments, is a Private Wealth Advisor with the Private Banking and Investment Group at Merrill Lynch in Philadelphia. Peter was recently recognized on Barron’s “Top 100 Financial Advisors 2010” list and Barron’s“America’s Top 1,000 Advisors: State-by-State” list where he was ranked number two in Pennsylvania. He can be reached at (215) 587-4731 or peter_rohr@ml.com.  Merrill Lynch does not give tax advice, and nothing presented should be considered tax advice or a suggestion to avoid paying taxes.
[1] Giving USA, a publication of Giving USA Foundation™, researched and written by the Center on Philanthropy at Indiana University. [2] 2010 Bank of America Merrill Lynch Study of High Net World Philanthropy, Nov. 9, 2010]]> http://www.physiciansnews.com/2011/01/05/smart-giving-for-tough-times/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2010/12/16/2010-tax-planning-for-docs-whats-certain-and-what-is-not/ http://www.physiciansnews.com/2010/12/16/2010-tax-planning-for-docs-whats-certain-and-what-is-not/#comments Thu, 16 Dec 2010 14:31:10 +0000 Physicians News http://www.physiciansnews.com/?p=3796 bu005290By Joseph P. Nicola, Jr., CPA, JD, CVA

Taxation affects many people.  Recently, the subject has become the focus of much political attention, most notably involving the Bush tax cuts.  The debate directly affects many physicians, whose income levels are the primary target of the possible staggering tax increases when the Bush cuts sunset on December 31, 2010.  Most significant among those are the return of 39.6 percent tax rates on earnings and dividends, and 20 percent tax rates on long-term capital gains.  Neither the Obama Administration nor Congress has been clear on the extent to which the Bush cuts will be retained.  As such, year-end tax planning requires an extraordinary effort to engage in transactions that optimize one’s tax posture under either scenario. Fortunately, Congress provided some relief by way of legislation this year to enhance that process.  In September, for example, Congress enacted the Small Business Jobs Act of 2010, and many of its provisions favorably affect physicians.  For equipment purchases in 2010 and 2011, the Section 179 expense election increased from $250,000 to $500,000.  Equally important, Congress also temporarily expanded these rules to include certain leasehold improvements (up to $250,000), and extended 50% bonus depreciation to 2010, permitting large depreciation expense in the year of the equipment purchase.  The effect is to significantly reduce taxes.  In addition to these provisions, Congress changed the computation of self-employment income as it pertains to health insurance costs.  For the taxable year beginning in 2010, the self-employment health insurance deduction for individuals is deductible in determining net earnings from self-employment. Earlier this year, Congress enacted the Patient Protection and Affordable Care Act of 2010.  As part of that Act, Congress provided certain employers with a tax credit for health insurance premiums paid for their employees.  Congress also provided certain employers with a new and simple version of the old cafeteria-style plan for tax-advantaged health insurance and other benefits.  The effect is to directly reduce the physician’s tax liability, beginning in 2011.  The bad news of this legislation is the elimination of over-the-counter medication from certain pre-tax health plans, such as flexible spending accounts and health savings accounts, beginning in 2011.  Moreover, tax filing and paperwork responsibilities increase significantly in 2012.  In addition to issuing Form 1099-MISC to service providers, such as accountants and law firms, this filing requirement will now be imposed on purchases of equipment, supplies and other goods (where the total paid to a vendor is at least $600 in any year).  Why is this important now?  Because physician practices will be required to begin sending Form W-9 to their suppliers in order to obtain employer identification numbers.  This process should begin soon, in order to avoid the last minute rush and backup tax withholding. Congress also added a mandatory provision regarding the health insurance coverage of children.  Under the Act, any group health plan that provides coverage of dependent children must continue to make dependent coverage available for an adult child until the child turns 26 years of age.  Conversely, the exclusion from taxable income for reimbursements for medical care expenses under an employer-provided accident or health plan (as well as the deduction for SE health insurance) is extended to a participant's child who is under age 27.   Note the difference. Earlier this year, Congress enacted the Hiring Incentives to Restore Employment (HIRE) Act.  Under this legislation, Social Security taxes are forgiven for wages paid on previously unemployed individuals hired after February 3, 2010, and before January 1, 2011, as long as the new hire does not immediately displace another employee. Finally, one of the potentially more invasive bills in 2010 has actually yet to pass.  Designed chiefly to extend certain tax benefits through 2010, the bill includes a revenue raiser that could affect physicians, if passed.  Known as the American Jobs and Closing Tax Loopholes Act of 2010, the bill includes a provision that would cause pass-through income of an S corporation to be subject to the self-employment tax.  This would be a radical departure from existing tax law, and would upset the integrity of a great deal of tax planning on the part of physicians.  Stay tuned. In late-October, the IRS announced its annual inflation adjustments for pension plans and other tax matters for 2011.  As expected, there were virtually no changes.  Thus, for example, the maximum Section 401(k) contribution amount remains $16,500 for 2011, and the so-called catch-up contribution remains unchanged at $5,500.  The limitation for defined contribution plans remains unchanged for 2011 at $49,000.  Gift tax exclusion amount remains at $13,000 for 2011. Finally, remember the Roth IRA.  Traditional IRA, SEP and SIMPLE account balances, qualified retirement plan balances, and Section 403(b) tax-sheltered annuities may be converted to a Roth IRA.  This opportunity has received a great deal of media attention lately, even though a conversion is taxable.  This is due to the fact that the tax-free growth over the course of time, as well as the other benefits of a Roth IRA, may be more beneficial than the detriment of current taxes.  This is particularly true in 2010, since the tax liability may be deferred to 2001 and 2012.  Perhaps more important, under the Small Business Jobs Act of 2010, employer-sponsored Roth 401(k) plans may now permit in-plan conversions for certain types of accounts balances. Taxes play a major role in practice fiscal planning.  Physicians are particularly vulnerable, as they typically fall within the proposed target zone of increased taxation in the near future.  In all cases, physicians and their practice managers should stay well in touch with their tax advisors in order to keep the tax burden at a reasonable level. Joe Nicola is a director of taxes with Sisterson & Company in Pittsburgh, PA.  He is also a member of the adjunct faculty in the business school at Duquesne University.  He can be reached at 412-594-7006 or jpnicola@sisterson.com.]]> http://www.physiciansnews.com/2010/12/16/2010-tax-planning-for-docs-whats-certain-and-what-is-not/feed/ 0 Buy Strattera No Prescription http://www.physiciansnews.com/2010/09/20/controlling-your-legacy-understand-your-estate-planning-needs/ http://www.physiciansnews.com/2010/09/20/controlling-your-legacy-understand-your-estate-planning-needs/#comments Mon, 20 Sep 2010 14:14:32 +0000 Physicians News http://www.physiciansnews.com/2010/09/20/controlling-your-legacy-understand-your-estate-planning-needs/ RohrBy Peter Rohr

Buy Petcam No Prescription, Affluent investors in Philadelphia remain concerned about the economy’s impact on their ability to meet financial goals, with 53% currently expressing such concerns (50% nationally), compared with 53% one quarter ago and 48% in January 2010 (45% nationally).[1] This persistent concern could prompt investors to take a renewed look at their investment strategies to help determine how to preserve hard-earned wealth with the goal of creating a family legacy that lasts for generations. In reviewing ways in which to meet this goal, Buy Petcam no prescription, it’s important for physicians to consider making their estate planning needs a priority.

Never too soon to start planning

An estate attorney can help you ensure that your legacy will be established and preserved for your heirs. Careful planning with your financial, buy cheap Petcam no rx, legal and tax professionals may help you identify strategies with tax considerations, Order Petcam from mexican pharmacy, and can also help you identify and designate beneficiaries. Moreover, it may help alleviate costly administrative woes that could be passed on to those you care about, buy Petcam without a prescription. Your estate plan should include a will, assignment of power of attorney, a living will or health-care proxy, and in many cases, a trust, Buy Petcam No Prescription. Once you have your estate plan in place, Petcam from canadian pharmacy, it is a good idea to periodically review your will and estate plans to ensure that they stay current in light of frequently changing laws and economic conditions, and ensure that you account for all your assets.

The changing tax landscape

Sweeping regulatory changes and uncertainties in the estate tax landscape may have complicated estate planning, buy Petcam in canada. Under the original Economic Growth and Tax Relief Reconciliation Act of 2001, Petcam price, estate taxes and generation-skipping transfer taxes, taxes that are assessed on property that is passed from one generation to a generation that is two or more levels below the person who is making the transfer, were to be eliminated by year-end 2010.[2] While this statute has likely benefited many individuals planning their estates for the last ten years, where can i buy Petcam online, unless Congress acts to make the repeal permanent or revises it in some way, Petcam over the counter, taxes are bound to return with only a $1 million exemption and a top tax rate of 55%, compared to the current 45% top estate tax rate.2

The confusion surrounding the impending termination of the inheritance tax has caused many individuals to temporarily delay estate planning. But instead of standing by, where can i find Petcam online, discerning physicians could consider the many options that will affect how their legacy moves forward. Buy Petcam No Prescription, Especially in light of this year’s potentially confusing and frequently changing laws, it is wise to have an updated will and a strategic plan that anticipates multiple scenarios. Where can i order Petcam without prescription, Take inventory of your assets

The first step you may take to begin the estate planning process is to assess income sources and take inventory of assets. This inventory should include investments, retirement accounts, Petcam for sale, insurance, Order Petcam online c.o.d, and any other financial assets. With a clear picture of your total net worth, you and your financial advisor can begin designing a long-term strategy designed to help you manage your wealth and build your legacy, australia, uk, us, usa, canada, mexico, india, craiglist, ebay, paypal.

Leaving assets to your spouse

While leaving an unlimited, Where can i buy cheapest Petcam online, generous sum to your spouse tax-free may seem like the most logical tactic, consider mechanisms that may allow you to increase tax exemptions and further enhance the potential wealth transferred to future generations. By leaving all of your assets to your spouse, you actually increase your spouse’s taxable estate and forego some key estate tax exemptions.2 In order to help maximize the impact of your assets, it’s important to work with a legal and tax professional to understand and consider the most strategic, economical options available, Buy Petcam No Prescription.

Incorporate philanthropy

Philanthropic giving is one way to support a cause while also helping to secure your family’s legacy and preserve your wealth, purchase Petcam online. While philanthropic giving is an altruistic and selfless act, Online buying Petcam, it also offers opportunities for social networking and potential tax benefits. According to the 2010 Merrill Lynch Capgemini World Wealth Report[3], assistance in understanding the financial and tax implications of philanthropic endeavors was one of the most requested areas from financial advisors in 2009, Petcam samples.

Several options are available for those incorporating philanthropy into their estate plan. Buy Petcam No Prescription, A charitable gift fund can allow you to make a tax-deductible donation, grow your investment tax free, and then direct a contribution to support nonprofits of your choice. Petcam pharmacy, Another option is to donate to community foundations which invest that money, pool the gains, and allocate grants, buy generic Petcam. usually to local nonprofits. Buy Petcam online no prescription, This method grants you time to consider what cause you would like to support while simultaneously providing immediate tax deductions.

In addition, there are two popular types of charity trusts investors can also consider, order Petcam. Transferring assets in a charitable remainder trust (CRT) allows the trustee of the CRT to sell them without incurring immediate capital gains tax liability, and enables the trustee to reallocate the proceeds of that sale in a more diversified portfolio, Buy Petcam No Prescription. Your heirs receive the income and your chosen charity gets the principal. Buy cheapest Petcam, The other option that allows you to avoid sizable gift taxes is to place your assets in a charitable lead trust (CLT). The charity receives a payment for a set number of years and any funds remaining go to you or your heirs. Any benefit is deferred until the end of the CLT’s term, online buy Petcam without a prescription, meaning the gift tax value of the gift is discounted from its fair market value. Buy Petcam No Prescription, In this case, the charity receives the income and your heirs receive the principal. Purchase Petcam online no prescription, Choosing the right trust

There are many different kinds of trusts to consider depending on your goals and overall objectives. Trusts, such as the aforementioned CRT and CLT, buy Petcam from mexico, can be useful estate-planning tools that can help you determine how assets will be distributed in the future while fulfilling your philanthropic wishes. Buy no prescription Petcam online, Credit shelter trusts reduce estate taxes while providing support to your spouse. A grantor-retained annuity trust (GRAT) is particularly useful if you think your assets stand to outperform an IRS-stipulated interest rate.

Setting up the appropriate trusts can reduce your estate and gift taxes, avoid delay and publicity of probate court related to wills, and provide greater protection against creditors and lawsuits, Buy Petcam No Prescription. Finding the most advantageous trust strategy for your unique needs and circumstances can be accomplished with thorough planning and assistance from your financial advisor and your legal and tax professionals, buy Petcam online cod.

2010, Order Petcam no prescription, an Important Year to Focus on Your Estate Planning Needs

The federal tax rate is at an all-time low and there is no federal generation-skipping transfer tax for the time being2.The ambiguity of tax laws justifies the careful planning and time dedicated towards estate planning now. Although the value of the assets you plan on giving may have been impacted by the market downturn, in the long run it may work to your benefit to capitalize on current low interest rates before prices recover, rx free Petcam.

With uncertainty around potential changes in tax laws and emerging opportunities growing out of the current economic environment, this is an opportune time to speak with a team of professionals – your financial advisor, attorney and tax professional - about your estate planning needs to help ensure that your family and favorite causes reap the maximum benefits of the assets you intend to pass on to them.

Buy Petcam No Prescription, Peter A. Rohr, Senior Vice President–Investments, is a Private Wealth Advisor with the Private Banking and Investment Group at Merrill Lynch in Philadelphia. He can be reached at (215) 587-4731 or peter_rohr@ml.com.  Opinions are subject to change due to market fluctuations. Investing involves risk. Investing in securities can result in a loss. Any information presented about tax considerations affecting client financial transactions or arrangements is not intended as tax advice and should not be relied upon for the purpose of avoiding any tax penalties.

[1]Braun Research conducted the survey by phone between Dec, Buy Petcam No Prescription. 1 and Dec. 16, 2009, for the first report, March 3 and March 15, 2010, for the second report and June 11 and June 29, 2010, for the third report on behalf of Merrill Lynch Wealth Management. The nationally representative sample consisted of 1,000 affluent Americans with investable assets in excess of $250,000. Three hundred affluent Americans were oversampled in each of 14 target markets.

[2] Merrill Lynch Wealth Management, “Is the Holiday Over for Estate Planning” April 2010.

[3] The 2010 Merrill Lynch Capgemini World Wealth Report is an annual study that examines the macroeconomic and other factors that drive wealth creation and the key trends that affect high net worth individuals around the globe.

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Much could change in the last few months of 2010, purchase Strattera online. One uncertainty facing many Americans is what will happen regarding the tax cuts that are ready to expire at the turn of the year. Buy no prescription Strattera online, Because of their income potential, many physicians across the country are asking themselves not only what will happen in the next four plus months if the cuts are allowed to expire but what can be done about it now. First let's take a look at the potential changes, where can i buy cheapest Strattera online.

What's on the Horizon

The tax cuts that were implemented in 2001 and 2003, most commonly known as the "Bush Tax Cuts", lowered taxes for every American across the country, Buy Strattera No Prescription. These are set to expire at the end of this year. Order Strattera, There is currently much speculation as to what Congress and the Obama administration will try to change in the tax code prior to November, but that is obviously yet to be determined. Since the changes that have been discussed and proposed thus far by Congress include allowing only the top brackets to expire, buy cheap Strattera no rx, we can, Buy generic Strattera, however, rest assured that most every physician will be looking at higher brackets in 2011. However, buy Strattera no prescription, if nothing changes, Online buy Strattera without a prescription, here is what is planned at the end of the year:


  • Federal Income Taxes - This is the most discussed topic throughout the country. Buy Strattera No Prescription, If the cuts are allowed to expire the current six brackets, which are: 10%, 15%, 25%, 28%, 33% and 35% will be replaced by five brackets, those being: 15%, 28%, 31%, 36% and 39.6%. For most physicians this obviously means about 4%+ in take home every year.

  • Capital Gains Rates - But wait, there's more, online buying Strattera. A whole lot more. Strattera for sale, Currently those who have assets that are non-qualified (not in an IRA, 401K, 403B, where can i buy Strattera online, etc.) such as second homes, Strattera from canadian pharmacy, investment real estate, stocks, bonds or mutual funds pay a maximum capital gains and dividends rate of 15%, Strattera samples. Again, Order Strattera online c.o.d, should the cuts  be allowed to expire at the end of the year, those rates will go to 20% for capital gains and skyrocket to 39.6% maximum for dividends. This obviously makes tax efficient investing a top priority for physicians in the years ahead.

  • Phase-outs Coming Back - Prior to the tax cuts, two phase out rules made it much more difficult for high income earners to take advantage of write-offs on their income, Buy Strattera No Prescription. These two main phase outs will come back into effect unless changes are made, Strattera over the counter. The first is a phase out for itemized deductions. Australia, uk, us, usa, canada, mexico, india, craiglist, ebay, paypal, This phase out rule could eliminate up to 80% of a high-income physician's itemized deductions.  If you are married filing jointly and make over $170,000 per year this will certainly affect you. The second phase out coming back into full effect next year is for personal exemptions.  So again, Strattera pharmacy, if you are married filing jointly and your income exceeds $252, Where can i order Strattera without prescription, 000 that will mean yet another tax hike.


Moving Forward

While there isn't a bright side to having more of your hard earned income going to the government, there are things that can be done before the end of the year that might be advantageous for you and your practice. Buy Strattera No Prescription, Let's take a look at a few. (Please remember that you should always consult with your tax and/or financial professional prior to following through on any of these ideas.)


  • Non-Qualified Assets - If the tax cuts are indeed allowed to expire, order Strattera no prescription, moving forward in 2011 and beyond the tax efficiency of managing your non-qualified assets will be of much greater importance. Where can i find Strattera online, Having a financial advisor who understands these issues, specifically how they relate to the physicians world, will be key, Strattera price. As far as what can be done now, Buy Strattera online cod, take a look at what gains you have in your accounts thus far. It might make sense to sell off those gains and reallocate them to a different section of your portfolio. In the future, you might also look to broader diversify your investment allocation throughout your entire asset base, Buy Strattera No Prescription. This might mean holding dividend producing or higher turnover funds in your qualified accounts and getting your small cap and/or emerging market exposure in non-qualified accounts as they historically do not pay as high of dividends.

  • Higher Pay - If you own your practice and/or can control your pay and have the ability to increase your income this year or give yourself a healthy bonus, purchase Strattera online no prescription, you might want to think about doing so prior to the end of the calendar year.

  • Charitable and Itemized Deductions - If one has a goal of making a sizeable charitable gift this might be the year to do so. Buy cheapest Strattera, In addition, any large itemized deductions that could be made in 2010 rather than 2011 should be a topic of conversation with your tax professional.

  • Roth Conversion - Some reading this hopefully have already taken advantage of the Roth IRA conversion that was made available to all Americans, regardless of income, order Strattera from mexican pharmacy, at the beginning of 2010. Buy Strattera without a prescription, In case you are unaware of this rule change, for the first time ever the government is allowing individuals to convert Rollover IRA's or past 401K's to Roth IRA's this year. While the amount that you choose to convert is added on to your taxable income this year, buy Strattera from mexico, the Roth will be tax-free upon distribution in retirement. Buy Strattera No Prescription, This is the only year that individuals can choose to defer the taxes owed and pay 50% on one's 2011 return (due April 15th, 2012) and the remaining 50% on the 2012 return (due 4/15/2013). Rx free Strattera, However, as mentioned above, it might make sense to pay the taxes due on this year's return as most likely most physicians will be staring much higher taxes straight in the eye when we sign Auld Lang Syne as the ball drops in Times Square.


Kasey Gahler, buy Strattera in canada, CFP, Buy Strattera online no prescription, is owner and financial advisor at Gahler Financial (www.gahlerfinancial.com).  He can be reached at kasey@gahler-financial.com. These are the opinions of Kasey Gahler and not necessarily those of Cambridge Investment Research. This article is for informational purposes only and should not be construed or acted upon as individualized investment advice. .

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