MDTAXES is a nationwide network of CPAs who specialize in the tax issues affecting healthcare professionals.

Find a CPA
Newsletters
Post a Question
PodCasts and Videos
Deduct your professional expenses
Track your professional expenses
Non-Cash Contribution Excel Worksheet * or PDF version *or uDoGood App
Listen About MDTAXES
Sign up to receive our monthly e-newsletter.
Email:
CPAs: Join the Network
Not a healthcare professional?


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

December 2013

TEN TIPS TO CUT YOUR 2013 TAXES

by Andrew D. Schwartz, CPA

It's not too late to cut your 2012 tax bill. Prior to December 31st:

  • Increase your 401(k) and 403(b) contributions if you haven't been contributing at the maximum rate all year.  This year you can put up to $17,500 into your 401(k) or 403(b) plan.  Anyone 50 or older by December 31st can put away an additional $5,500.  Contributing to a 401(k) or 403(b) plan at work is one of the best tax shelters available to you during your working years.  (You might also start thinking about setting your 2014 retirement savings goals too.)

  • If you’re self-employed, consider setting up a Solo 401(k) by 12/31.  A Solo 401(k) plan lets a self-employed person hit the $51k retirement plan max with less income than a SEP IRA, and also allows a person aged 50 or older to put away $56.5k into a retirement plan for 2013.

  • Take a look at your withholdings and instruct your employer to withhold additional taxes if you haven’t had enough taxes withheld during the year to avoid getting hit with an underpayment penalty.  (Take a look at the IRS' Withholding Calculator to set your withholdings for 2014.)

  • Consider selling your investments held in non-retirement accounts that have decreased in value since your capital losses can offset other capital gains realized during the year (including from your mutual funds).  Excess losses can then be used to offset up to $3,000 of wages and other income.  Make sure to wait at least 31 days before buying back a security sold at a loss, or the IRS will disallow the loss under the "wash sale" rules.

  • Consider selling your investments that have increased in value if you are in the lowest tax bracket since the capital gains rate for you will be 0%.  You can then buy back those securities, and the "cost-basis" will be the higher amount.  This strategy will save you taxes down the road when you sell these securities.  Just make sure that the capital gains realized don't push you out of the 15% tax bracket, or you'll be taxed on those gains that fall outside that bracket at 15%.

  • Send in your January 2014 mortgage payment early enough so it will be processed prior to 12/31/13.  By sending in your payment a few weeks early, you can deduct the interest portion of that payment a full year earlier.

  • Clean out your closets and donate your clothing and household items to a charitable organization, since "non-cash" contributions are deductible if you itemize.  Don’t forget to get a receipt.  And you should make a list of each item donated, along with its condition, and snap a few photos as well.  Remember, only donations of clothing and household items in "good condition or better" qualify for a deduction.  (To track what you donate, download our Non-Cash Contribution Worksheet - Excel Version  or the PDF version.)
     

  • For gifts of money, making your donation by credit card before December 31st allows you to deduct the donation on this year's return, even if you don't pay your credit card bill until 2014.  And you always have the option of donating appreciated investments to charities. You get to claim your donation based on the value of the assets donated, without paying any capital gains taxes on the appreciation.  (Use this IRS tool to confirm a charity as legitimate.)

  • Pre-pay your projected state tax shortfall if you'll be itemizing your deductions and not subject to the alternative minimum tax.  Due to the higher tax rates enacted for 2013, there is a better chance that you won't get hit by the AMT this year.

  • Pre-pay and pay off your medical bills if your total medical expenses exceed 10% of your income and you itemize.  Please note that this threshold remains 7.5% for people over the age of 65 while the threshold for everyone increased from 7.5% to 10%.

And, as always, evaluate whether you'll save any taxes by postponing 2013 income or deductions into 2014 or by accelerating 2014 income or deductions into 2013.

Got questions about year-end tax planning?  If so, please contact the closest MDTAXES CPA.

TOP


IRS WARNS OF PERVASIVE TELEPHONE SCAM

The IRS warns that schemes that fraudulently use the IRS name, logo or Web site clone to to gain access to consumers’ financial information in order to steal their identity and assets is on the rise. Below is a telephone scam that unfortunately tricked one of my firm's clients and cost her about $5k earlier this year. 

IR-2013-84, Oct. 31, 2013

WASHINGTON — The Internal Revenue Service today warned consumers about a sophisticated phone scam targeting taxpayers, including recent immigrants, throughout the country.

Victims are told they owe money to the IRS and it must be paid promptly through a pre-loaded debit card or wire transfer. If the victim refuses to cooperate, they are then threatened with arrest, deportation or suspension of a business or driver’s license. In many cases, the caller becomes hostile and insulting.

“This scam has hit taxpayers in nearly every state in the country.  We want to educate taxpayers so they can help protect themselves.  Rest assured, we do not and will not ask for credit card numbers over the phone, nor request a pre-paid debit card or wire transfer,” says IRS Acting Commissioner Danny Werfel. “If someone unexpectedly calls claiming to be from the IRS and threatens police arrest, deportation or license revocation if you don’t pay immediately, that is a sign that it really isn’t the IRS calling.” Werfel noted that the first IRS contact with taxpayers on a tax issue is likely to occur via mail

Other characteristics of this scam include:

  • Scammers use fake names and IRS badge numbers. They generally use common names and surnames to identify themselves.
  • Scammers may be able to recite the last four digits of a victim’s Social Security Number.
  • Scammers spoof the IRS toll-free number on caller ID to make it appear that it’s the IRS calling.
  • Scammers sometimes send bogus IRS emails to some victims to support their bogus calls.
  • Victims hear background noise of other calls being conducted to mimic a call site.
  • After threatening victims with jail time or driver’s license revocation, scammers hang up and others soon call back pretending to be from the local police or DMV, and the caller ID supports their claim.

If you get a phone call from someone claiming to be from the IRS, here’s what you should do:

  • If you know you owe taxes or you think you might owe taxes, call the IRS at 1.800.829.1040. The IRS employees at that line can help you with a payment issue – if there really is such an issue.
  • If you know you don’t owe taxes or have no reason to think that you owe any taxes (for example, you’ve never received a bill or the caller made some bogus threats as described above), then call and report the incident to the Treasury Inspector General for Tax Administration at 1.800.366.4484.
  • If you’ve been targeted by this scam, you should also contact the Federal Trade Commission and use their “FTC Complaint Assistant” at FTC.gov.  Please add "IRS Telephone Scam" to the comments of your complaint.

Taxpayers should be aware that there are other unrelated scams (such as a lottery sweepstakes) and solicitations (such as debt relief) that fraudulently claim to be from the IRS.

The IRS encourages taxpayers to be vigilant against phone and email scams that use the IRS as a lure. The IRS does not initiate contact with taxpayers by email to request personal or financial information.  This includes any type of electronic communication, such as text messages and social media channels. The IRS also does not ask for PINs, passwords or similar confidential access information for credit card, bank or other financial accounts. Recipients should not open any attachments or click on any links contained in the message. Instead, forward the e-mail to phishing@irs.gov.

More information on how to report phishing scams involving the IRS is available on the genuine IRS website, IRS.gov. 

The IRS also recently updated their list of Phishing and Other Schemes Using the IRS Name.

 TOP


NEW PRESENTATIONS RECORDED DURING 2013 AVAILABLE ON MDTAXES

As the year winds down, we're pleased to share with you with links to the following presentations recorded during 2013:

Professional Expenses Commonly Deducted by Doctors to Save Taxes

Physicians, dentists, psychologists, and other healthcare professionals can often times save some taxes by deducting their unreimbursed professional expenses. Check out this presentation to learn about a variety of professional expenses commonly deducted by doctors in the U.S.

Retirement Plan Basics for Practice Owners

Wondering which type of retirement plan makes the most sense for your practice? Check out this presentation on the most common retirement plan options available to practice owners. You'll also learn why it makes sense to set up and begin to max out your retirement plan savings as soon as possible.

Million Dollar Metrics for General Dentists

The ten "million dollar metrics" presented in this video will provide general dentists with valuable insight to help improve their practice management. General dentists can learn which metrics to generate to gauge how their dental practice is doing, and then compare those metrics with other general dental practices, including those practices from the sample that collected one million dollars or more during 2012.

Increase Practice Revenue and Profits with SIBS (Simple Incentive Bonus System)

Learn to increase revenues and profits at your practice by implementing a Simple Incentive Bonus System. For short we call this SIBS. We've seen a lot of clients implement bonus system similar to the one presented in this video who saw immediate positive results within their practice.

Recorded Short Presentations on QuantiaMD:

We also have four three-minute multi-media podcasts, including insightful poll questions, available only on QuantiaMD:

And One Modest Attempt at Humor. 

Editor's note: Please don't ask us why.  Sometimes there are things in a person's brain that just need to come out.  Please remember that we are tax accountants first, and I don't even know where comedian would come on this list.

Best Depreciation Joke Ever Written

Suggestions for Future Recorded Presenations???

If you have any suggestions for information you'd like us to include in our 2014 recorded presentations, please e-mail me.

TOP


TAX AND FINANCIAL PLANNING CALENDAR FOR DECEMBER 2013

Month

Income Taxes

Saving and Investing

 

 

December

  • 4th quarter state estimates should be paid by 12/31 for people who itemize their deductions and won't be hit by the AMT.
  • Keogh plans and Solo 401(k)'s must be established by 12/31
  • 529 Plans must be funded by 12/31 to take full advantage of this year's gift limit of $14,000. 
  • Last chance to maximize annual contributions to your 401(k) or 403(b) plan of up to $17,500, ($23,000 if 50 or older).

 TOP


2013 & 2014 TAX FACTS

  • For 2013, the standard deduction for a single individual is $6,100 and for a married couple is $12,200. 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 2013, the personal exemption is $3,900. Individuals will claim a personal deduction for themselves, their spouse, and their dependents. 
  • The maximum earnings subject to social security taxes is $113,700 for 2013, increasing to $117,000 for 2014.
  • The standard mileage rate is $.565 per business mile as of January 1, 2013, up one cent from $.555 per mile since July 1, 2011.
  • The maximum annual salary deferral into a 401(k) plan or a 403(b) plan is $17,500 in 2013 and 2014, up from $17,000 in 2012.  And if you'll be 50 or older by December 31st, you can contribute an extra $5,500 into your 401(k) or 403(b) account that year.
  • The maximum annual contribution to your IRA is $5,500 for 2013 and 2014, up from $5,000 in 2012.  And if you turn 50 by December 31st, you can contribute an extra $1,000 that year.  You have until April 15, 2014 to make your 2013 IRA contributions. 

TOP

Need Help With Your Nanny Payroll?
 

This Month's Topics

Ten Tips to Cut Your 2013 Taxes

IRS Warns Of Pervasive Telephone Scam

New Presentations Recorded During 2013 Available On MDTAXES

The FICA Refund for Medical Residents 

2013 & 2014 Tax Facts

Tax and Financial Planning Calendar for December 2013

 

NEWSLETTER ARCHIVES
Browse our index of previous months' newsletter topics

Need a Lawyer or
Financial Advisor?


Directory of Lawyers &
Directory of Financial Advisors
 Lists of MDTAXES-affiliated professionals experienced with the issues that affect you and your colleagues.

Not a Healthcare Professional?

Go to FindAGoodCPA.com to locate a tax professional in your metropolitan area based on the professional's specialty.

Need help with your MEDICAL BILLING?

Find out about Billing Depot, an innovative and proven web-based medical billing and EMR provider.

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.

Copyright 2013 The MDTAXES Network by CPANiche, LLC    Email us at  admin@cpaniche.com