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Tax Planning for the Dentist  in an Era of Uncertainty  Presented by Erick Cutler, CPA   Friday, November 30, 2012
Current Tax Planning• No surprises• Use of retirement accounts• Depreciation deductions• Wages & withholding
Alternative Minimum Tax• Pay higher of Regular or AMT• 2011 AMT exemption $74,450• 2012 AMT exemption $45,000
AMT Calculation                              Current     2013Taxable Income                275,000    275,000Sch. A Taxes ...
Anticipated Changes
Payroll Tax Holiday• Rate to increase (4.2% to 6.2%) on first  $110,000 of employee wages
Depreciation• § 179 Expense Election  – 2012 Expense $139,000 (2013 $25,000)  – 2012 Investment ceiling $560,000 (2013    ...
Excise Tax on Medical                Devices• 2.3% tax on sale of medical devices• Tax is paid by manufacturer• Not on ite...
Capital Gains• Long term rates (15% to 18%)  – Additional 3.8% could apply• Qualified Dividends
Marriage Penalty• Standard deduction to decrease• $11,900 for 2012• $10,150 for 2013
Medical Expense            Deductions• 2012 limit is 7.5% of AGI• 2013 limit is 10% of AGI
Tax Brackets
2012 Brackets                                                      Head of HouseholdRate       Single Filers      Married ...
Expected 2013 Brackets                                                       Head of HouseholdRate        Single Filers   ...
Hospital Insurance Tax (HI)• Applies to wages received with respect  to employment in excess of $250,000  ($125,000 MFJ & ...
Hospital Insurance TaxTP Wages                    225,000SP Wages                    55,000SP Sch. C                   20,...
Medicare Surtax• Imposed on the lower of the filers net  investment income or the excess of  MAGI over thresholds ($250,00...
Medicare Surtax    Investment IncomeIncludes        Not Included•Interest       •Tax exempt interest•Dividends      •Payou...
Medicare SurtaxWages        210,000Interest     2,000Dividends    8,000       $80,000 NIICap Gains    70,000AGI          2...
Tax Planning Strategies• Manage your taxable income for 2012• Defer tax deductible expenses to 2013• Consider acceleration...
Tax Planning Strategies• Defer net operating losses to 2013• Consider restructuring investment  portfolios to manage futur...
Tax Planning in an          Era of Uncertainty• Current year tax planning• Awareness of changes and the economic  environm...
For Additional Information         Contact   Erick Cutler, PartnerGoldin Peiser & Peiser, LLP       ACutler@GPPcpa.com    ...
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Tax planning for the dentist in an era of uncertainty

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Transcript of "Tax planning for the dentist in an era of uncertainty"

  1. 1. Tax Planning for the Dentist in an Era of Uncertainty Presented by Erick Cutler, CPA Friday, November 30, 2012
  2. 2. Current Tax Planning• No surprises• Use of retirement accounts• Depreciation deductions• Wages & withholding
  3. 3. Alternative Minimum Tax• Pay higher of Regular or AMT• 2011 AMT exemption $74,450• 2012 AMT exemption $45,000
  4. 4. AMT Calculation Current 2013Taxable Income 275,000 275,000Sch. A Taxes 13,000 13,000Other not included deductions 5,000 5,000AMT I 293,000 293,000AMT Exemption <75,000> <45,000>AMT (Rate 28%) 61,040 69,440Regular Tax 55,000 55,000
  5. 5. Anticipated Changes
  6. 6. Payroll Tax Holiday• Rate to increase (4.2% to 6.2%) on first $110,000 of employee wages
  7. 7. Depreciation• § 179 Expense Election – 2012 Expense $139,000 (2013 $25,000) – 2012 Investment ceiling $560,000 (2013 $200,000)• Bonus Depreciation (gone after 2012)
  8. 8. Excise Tax on Medical Devices• 2.3% tax on sale of medical devices• Tax is paid by manufacturer• Not on items purchased by general public i.e. eyeglasses, contact, hearing aids, etc.
  9. 9. Capital Gains• Long term rates (15% to 18%) – Additional 3.8% could apply• Qualified Dividends
  10. 10. Marriage Penalty• Standard deduction to decrease• $11,900 for 2012• $10,150 for 2013
  11. 11. Medical Expense Deductions• 2012 limit is 7.5% of AGI• 2013 limit is 10% of AGI
  12. 12. Tax Brackets
  13. 13. 2012 Brackets Head of HouseholdRate Single Filers Married Joint Filers Filers10% $0 to $8,950 $0 to $17,900 $0 to $12,75015% $8,950 to $36,250 $17,900 to $72,500 $12,750 to $48,60025% $36,250 to $87,850 $72,500 to $146,400 $48,600 to $125,45028% $87,850 to $183,250 $146,400 to $223,050 $125,450 to $203,15033% $183,250 to $398,350 $223,050 to $398,350 $203,150 to $398,35035% $398,350+ $398,350+ $398,350+
  14. 14. Expected 2013 Brackets Head of HouseholdRate Single Filers Married Joint Filers Filers15% $0 to $36,250 $0 to $60,550 $0 to $48,60028% $36,250 to $87,850 $60,550 to $146,400 $48,600 to $125,45031% $87,850 to $183,250 $146,400 to $223,050 $125,450 to $203,15036% $183,250 to $398,350 $223,050 to $398,350 $203,150 to $398,35039.6% $398,350+ $398,350+ $398,350+
  15. 15. Hospital Insurance Tax (HI)• Applies to wages received with respect to employment in excess of $250,000 ($125,000 MFJ & $200,000 single HOH)• Rate is .9% on amount in excess of above figures• Also applies to self-employment income
  16. 16. Hospital Insurance TaxTP Wages 225,000SP Wages 55,000SP Sch. C 20,000TP LLC 25,000Total Wage and SE income $325,000 → $75,000 over threshold $75,000 x .9% = $675 additional tax
  17. 17. Medicare Surtax• Imposed on the lower of the filers net investment income or the excess of MAGI over thresholds ($250,000 MFJ, $125,000 MFS, $200,000 single or HOH)• Rate is 3.8%
  18. 18. Medicare Surtax Investment IncomeIncludes Not Included•Interest •Tax exempt interest•Dividends •Payout from retirement•Cap Gains plans (401k, IRAs, Roths, Profit sharing defined•Annuities benefits plans•Royalties•Passiverental income
  19. 19. Medicare SurtaxWages 210,000Interest 2,000Dividends 8,000 $80,000 NIICap Gains 70,000AGI 290,000 → $40,000 over MAGI thresholdLower of:3.8% x 80,000 = $3,0403.8% x 40,000 = $1,520
  20. 20. Tax Planning Strategies• Manage your taxable income for 2012• Defer tax deductible expenses to 2013• Consider acceleration of capital gains• Business owners: – Consider pushing deductions to 2013(employee bonuses) – Defer purchase of depreciable assets
  21. 21. Tax Planning Strategies• Defer net operating losses to 2013• Consider restructuring investment portfolios to manage future Net Investment Income to avoid additional Medicare tax• Retirement plans (implementation & evaluation of existing plans)
  22. 22. Tax Planning in an Era of Uncertainty• Current year tax planning• Awareness of changes and the economic environment• Broadened planning perspective
  23. 23. For Additional Information Contact Erick Cutler, PartnerGoldin Peiser & Peiser, LLP ACutler@GPPcpa.com 214-635-2541 www.GPPcpa.com Dental.GPPcpa.com
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