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NOTICE TO RESIDENTS OF MARYLAND

We are NOT affiliated with the State of Maryland. If you are looking for information about Maryland income taxes, please go to www.marylandtaxes.com.


Useful Links:

FindAGoodCPA.com - Not a healthcare professional? Find a CPA or EA who understands the tax issues specific to you.

Nanny Taxes - Find out what's involved with complying with the Nanny Tax Rules

IRS Web Site - for tax forms, publications, and general tax information.

Exchange Authority - New England's first authority for IRC 1031 Exchanges

Cost Segregation Studies - Accelerate tax depreciation deductions on new and existing buildings through cost segregation studies

Social Security - find out the latest rules or your projected retirement benefit.

The Company Corporation offers fast, reliable & affordable incorporation and LLC services.


MONTHLY TAX NEWSLETTER

June 2017

MAXIMIZE TAX DEDUCTIONS DURING YOUR SUMMER TRAVELS

by Michael Bohigian CPA

With the summer travel season nearly upon us, here are some tips and rules about deducting business travel expenses:
  • Travel expenses are the ordinary and necessary expenses of traveling away from home for your business, profession, or job.
  • You are traveling away from home if your duties require you to be away from the general area of your tax home for a period substantially longer than an ordinary day's work, and you need to get sleep or rest to meet the demands of your work while away and before returning home.
  • Deductible travel expenses while away from home include, but aren't limited to: travel by airplane, bus, train, or car, meals and lodging, tips you pay for services related to these expenses.
  • The government does allow a standard meal allowance / per diem rate that you can deduct in lieu of actual meal expenses. The per diem rates vary based upon location and can be looked up on the GSA website.  You will base your deduction for meal and entertainment for each trip based on the per diem rates or actual expenses incurred.
  • For domestic travel, the trip needs to be primarily for business.  For foreign travel, the threshold is exclusively for travel (subject to various exceptions on what actually constitutes exclusivity.)
  • You may deduct travel expenses, including meals and lodging you incurred in looking for a new job as long as you have established yourself in your present trade or business. 
  • You can deduct travel expenses paid or incurred in connection with a temporary work assignment away from home.  The temporary assignment cannot be considered indefinite or cannot be expected to last longer than one year. You also need to intend to return back to your original home to continue working at the end of the assignment.

According to the IRS, "Good records are essential. Refer to Topic 305 for information on recordkeeping.

For more information on travel expenses, please refer to IRS Publication 463.

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SAVE YOURSELF $125 OR MORE NEXT TAX SEASON IF YOU HAVE WORKING KIDS

by Andrew D. Schwartz CPA

The IRS wants to help parents of working children avoid the headaches and costs of preparing tax returns for their kids who won't earn enough to be taxed.  All you need to do is have your child write the word "Exempt" in Box 7 of the Form W-4 that is generally completed the first day of employment.  If your child previously submitted an incorrect W-4, please have them file a corrected one with their employer as soon as they can.

Please note that a working child will generally owe no income taxes unless wages earned exceed $6,400 (in 2017) and/or investment income exceeds $350.  Needless to say, most of the kids are getting back all the federal and state income taxes withheld during the year.

Here is what the IRS says in their instructions to the Form W-4:

Exemption from withholding. If you are exempt, complete only lines 1, 2, 3, 4, and 7 and sign the form to validate it.

And here are the instructions on the W-4 for line 7:

I claim exemption from withholding for 2017, and I certify that I meet both of the following conditions for exemption.

  • Last year I had a right to a refund of all federal income tax withheld because I had no tax liability, and

  • This year I expect a refund of all federal income tax withheld because I expect to have no tax liability.

If you meet both conditions, write “Exempt” here .

Do yourself and your kids a favor by having him or her write the word "Exempt" on Line 7 of the W-4 form.  Your working child will have more money to spend sooner (and will hopefully ask you for less of your money during that time) since no federal and state income taxes will be withheld from their wages.  And you won't get stuck preparing a 1040-EZ for your child or paying your CPA $125 or more so your kid can get back their tax refund on money that didn't need to be withheld in the first place.

Info to Share with Your Millennial Child

We've put together 2 short recorded presentations to help explain these rules to parents and their kids.  Each of these videos has more than 10,000 views so far:

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5 MYTHS YOUR LANDLORD WANTS YOU TO BELIEVE

by Matt Kolcum of Carr Healthcare Realty

It can be difficult to discern fact from fiction when dealing with landlords. A misunderstanding of these key issues can have serious consequences for your practice. The following information should help dispel some common myths and prevent costly mistakes in your next lease negotiation.

Myth #1: The Landlord Is On Your Side

Many landlords attempt to befriend their tenants, making it difficult for tenants to remember the landlord 's primary goal is financial gain. They are seeking to secure a lease with the tenant paying as much as possible. Even the friendliest landlord wants to make the maximum profit on his space, just like the nicest tenant seeks the lowest possible lease rate so his business can thrive. Financial burdens quickly arise for tenants who place undue trust in their landlord and fail to properly negotiate their lease. By having representation, you can learn how your lease compares to the market and ensure you are getting the best possible terms.

Myth #2: You Are Not Entitled to Representation

Some landlords employ intimidation, instead of friendliness, to achieve their goal. The intimidation tactics may include telling tenants they are not allowed to have representation. This is not true. Lease negotiations are different than negotiating the price of a car or trying to haggle for a better price at a flea market. They are complex transactions, layered with hidden opportunities for landlords to take advantage of anyone not represented by an expert. Landlords are professionals who are aware of these complexities. If a landlord says you are not allowed to have representation, that is a clear signal they do not respect your desire to be treated fairly.

Myth #3: You Are Already Getting The Best Possible Rate for Your Space

There are many conditions that factor into lease rates for a commercial space. Things such as current building vacancy, length of the lease, amount of tenant improvement allowance, building condition and many other considerations impact the appropriate rate for a particular space. Several of these considerations are specific to spaces for healthcare tenants, highlighting the need for a real estate professional who has expertise in healthcare. Healthcare practices are often told they are getting the best possible rate for their space, yet they can receive a much better offer from the landlord when an expert assesses these mitigating factors

Myth #4: Your Renewal Is Not Negotiable

Most leases provide an option for the tenant to renew their lease when it expires, and may even detail the exact terms of the renewal. However, it is important to understand that your renewal is negotiable, even if you have renewal terms specified in your current lease. A landlord who says you cannot renegotiate the terms for your renewal is usually doing so because they can get you to pay more by exercising the option to renew instead of negotiating new terms. The only way to be certain you have the best possible terms for your renewal is to compare those terms with current market rates in the area, a vital step often missed by healthcare professionals entering this process alone.

Myth #5: You Have No Other Options; The Landlord Has Many

This common myth might be the most important to address, because it is fundamental to how landlords operate. The landlord wants you to believe that his property is the only suitable location for your practice. The truth is there are likely several other properties that would fit the needs of your practice, and the landlord should be competing to keep you in his building.

The landlord also wants you to believe he has several potential tenants ready to occupy your space if you don't take it. This position is used to force a tenant to rush into signing an unfavorable lease, when, in fact, it usually takes months or years to fill a commercial space. Each leasing situation is unique, and a healthcare real estate professional who knows your strengths as a tenant can help you understand what type of leverage you have.

 

This information represents a few of the many misconceptions involving landlords in healthcare real estate transactions. Using a real estate professional with expertise in healthcare will help protect you from falling victim to these and other common landlord myths.

Carr Healthcare Realty is the nation’s leading provider of commercial real estate services for healthcare tenants and buyers. Every year, thousands of medical, dental, veterinary, and other healthcare practices trust Carr Healthcare Realty to help them achieve the most favorable terms on their lease and purchase negotiations. Carr Healthcare Realty’s team of experts can assist with all types of real estate transactions, including lease renewals, expansions, relocations, startup offices, purchases, and practice transitions. Healthcare practices choose Carr to save them a substantial amount of time and money; while enduring their interests are always first.

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TAX AND FINANCIAL PLANNING CALENDAR FOR JUNE 2017

Month

Income Taxes

Saving and Investing

 

June

  • 2nd quarter estimates due 6/15/17
  • Income tax returns (or extension requests) for Ex-Patriots due 6/15/17

 

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2016 & 2017 TAX FACTS

  • For 2016, the standard deduction for a single individual is $6,300 and for a married couple is $12,600. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes), real estate taxes, mortgage interest, charitable contributions, and unreimbursed employee business expenses.
  • For 2016, the personal exemption is $4,050. Individuals will claim a personal deduction for themselves, their spouse, and their dependents. 
  • The maximum earnings subject to social security taxes is $127,200 for 2017, up from $118,500 for 2015 and 2016.
  • The standard mileage rate is $.535 per business mile as of January 1, 2017, down from $.54 for 2016.
  • The maximum annual salary deferral into a 401(k) plan or a 403(b) plan is $18,000 in 2015, 2016 and 2017, up from $17.5k in 2014. And if you'll be 50 or older by December 31st, you can contribute an extra $6,000 into your 401(k) or 403(b) account this year.
  • The maximum annual contribution to your IRA is $5,500 for 2014 through 2017. And if you turn 50 by December 31st, you can contribute an extra $1,000 that year. You have until April 15, 2017 to make your 2016 IRA contributions.

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This Month's Topics

Maximize Tax Deductions During Your Summer Travels

Save Yourself $125 Or More Next Tax Season If You have Working Kids

5 Myths Your Landlord Wants You To Believe

The FICA Refund for Medical Residents

2016 & 2017 Tax Facts

Tax and Financial Planning Calendar for June 2017

 

NEWSLETTER ARCHIVES
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WHAT'S NEW WITH THE FICA REFUND?

In a shocking development, the IRS recently announced that they will be honoring the FICA tax refunds submitted by residency programs and individual doctors. The catch is that only FICA taxes paid prior to 4/1/05 qualify.

For more information, go to our April 2010 Newsletter, our January 2009 Newsletter, or our February 2001 Newsletter or read through the IRS' Chief Counsel Advice Memorandum on this issue.

Let's work together to keep current on this hugely valuable tax break. Please post whatever you read or hear regarding this FICA issue on our new Message Board we set up just for this topic.

 

 
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