Doctors' Office CPA Accountant
Medical Practice Accounting Services
SRG Advisors provides a wide range of tax services that include tax preparation and financial planning services that focus on the medical industry. As experienced doctors' office accountants with many years of knowledge helping medical practices, we can guide you to make the right decisions for your business no matter what they might be.
We Provide the following medical practice accounting services:
- Forming a Medical Practice
- CPA Accounting Services
- Business Consulting Services
- Payroll tax services
- Tax Preparation
- Retirement Planning
- Advanced Tax Strategies
Let SRG Advisors help plan your financial future. Don’t wait, start planning now to make sure you are on track for retirement. We’ll be happy to tell you more about our experience in providing CPA services for physicians and to set up an in-person meeting.
S Corporation for Doctors
If you want the best tax strategy for your medical practice, consider setting up an S Corporation.
What is an S Corporation?
As defined by IRS, S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid double taxation on the corporate income. S corporations are responsible for tax on certain built-in gains and passive income at the entity level.
To qualify for S corporation status, the corporation must meet the following requirements:
- Be a domestic corporation
- Have only allowable shareholders
- May be individuals, certain trusts, and estates and
- May not be partnerships, corporations or non-resident alien shareholders
- Have no more than 100 shareholders
- Have only one class of stock
- Not be an ineligible corporation (i.e. certain financial institutions, insurance companies, and domestic international sales corporations).
In order to become an S corporation, the corporation must submit Form 2553 Election by a Small Business Corporation signed by all the shareholders.
What are the benefits of an S Corporation?
- Pass-through Entity – Shareholders are taxed directly on the income of the business.
- Limited Liability – Shareholders are protected from the financial and legal obligations of the business.
- Reduced Self Employment Taxes & Reasonable Compensation – Shareholders can split their income into compensation and distributions. S Corporation income distributions are not subject to self-employment tax. However, shareholders need to pay themselves a “reasonable compensation” which is subject to payroll taxes.
- Qualified Business Income Deduction – Shareholders can claim a deduction of 20% of their “qualified business income”.
- Low Risk of an Audit – S Corporation has a lesser chance of being audited.
What are the top S Corporation deductions that can be used as tax savings strategy for Doctors?
- Reasonable Compensation – As mentioned above, shareholders can split their income into compensation and distributions. S Corporation needs to pay shareholder-employee reasonable compensation subject to payroll taxes.
- Rent - Rent paid by S Corporation is deductible. One of the best tax strategy you can use is to rent your home to your business tax free for 14 days. Income from the rent is non-taxable. This is known as “The Augusta Rule”.
- Home Office – You can use your home as your primary work place. You can deduct expenses like property tax, mortgage interest, repairs and maintenance, utilities, insurance, security, and even the depreciation of your home.
- Health Savings Accounts (HSA) – You can claim a tax deduction for the contributions made by S Corporation to Health Savings Account. One of the ultimate tax efficient ways to save. It allows contributions to be contributed tax-free, accumulate tax free, and be given tax free if used for qualified medical expenses.
- Retirement Plan – You can also claim a tax deduction for the contributions made to a pre-tax retirement plan by S Corporations. You may pay a lower rate at retirement by contributing to a retirement plan. You do not need to pay taxes when contributing and it will grow tax free. Taxes are paid at the time of withdrawal. You can also convert pre-tax retirement to post-tax retirement. Also known as Roth Account. Roth is not tax deductible, but the savings grow tax-free as well as the withdrawals. There are different types of retirement accounts available to each client based on his or her situation, and qualified tax advisors like us can help you plan properly.
- Hire Independent Contractors – You can claim a tax deduction for payments to doctors who are independent contractors. This allows you to eliminate payroll taxes.
- Family Wages – You can include your family members on the payroll. You can claim a tax deduction for the wages you pay them. If you hire your spouse, you can put extra money into their retirement account depending on how much money they make in the company. This may result in additional tax savings.
- Business Assets – You can create a separate business entities if the business owns an equipment or real estate and lease it back to your practice. This allows more deductions for qualified business income.
- Cost Segregation Studies – One of the most common and complex deduction in business is depreciation. If you have your own building that will be used in the business, cost segregation study can help you accelerate depreciation, resulting to a higher tax deductions in early years, allowing you to have a lower tax liability and increasing your cash flow.
Hire Tax Professionals to Help
Hiring the right tax professionals will help you grow your business and focus on your medical practice without worrying your taxes.
We are here to help at SRG Advisors -- CPAs Jay Guttmann, Leon Schenker, and Milton Rosenblatt are experienced professionals who strive to help businesses operate more efficiently and confidently. Our firm, SRG Advisors, LLC, provides accounting and tax services to many businesses in Hackensack, Teaneck, Fort Lee, Paramus, and the surrounding communities.
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