Each winter, Barton Associates, the Locum Tenens Experts, invites Andrew Schwartz CPA to present a live webinar on the tax issues and basic financial planning opportunities applicable to Locum Tenens providers. Much of the information presented is relevant to all self-employed professionals even those not working as a Locum Tenens provider.
Held on February 7 this year, the webinar covered:
- Common deductions, including business expenses and health insurance
- Retirement plan options
- Health Savings Accounts
- Estimated taxes
- Multi-state issues
- S-Corp Considerations
You can watch a recording of the webinar at: Barton Associates – 2023-2024 Locum Tenens Tax Webinar.
You can also view Andrew’s slides here.
Barton Associates offers healthcare jobs for locum tenens physicians, doctors, NPs, Pas, dentists, psychologists, and more in all 50 states.
In 2024, a stringent new filing requirement takes effect under the Corporate Transparency Act. The act compels all qualifying small businesses to disclose certain identifying information on “beneficial owners” to the Financial Crimes Enforcement Network (FinCEN).
Penalties for noncompliance are extremely steep, so we are strongly urging all our clients to make CTA compliance a priority. Please read through the compliance guide on your own, or plan to work with an attorney to gather the required information, complete the BOI report, and then submit to FinCEN prior to the January 1, 2025 deadline. Due to the legal complexity involved, we are not currently able to provide this service, but please feel free to contact your Client Manager with questions.
While existing businesses set up prior to 1/1/24 don’t need to file under the new CTA rules until 1/1/25, new businesses established after 12/31/23 have a much shorter window to comply. The revised rules give new businesses set up in 2024 only 90 days to file. Starting in 2025, new businesses only have 30 days to file. For that reason, please ensure that the lawyer who is setting up your new business will take care of this time-sensitive filing as part of the services they are providing.
Effective January 1, 2024, the Corporate Transparency Act (CTA) establishes a new filing requirement for small business. Qualifying businesses must file a Beneficial Owner Information (BOI) report with Financial Crimes Enforcement network (FinCEN), a bureau under the Department of Treasury. According to the bureau’s website, the expectation is that nearly all small businesses will meet the criteria and must file (Beneficial Ownership Information Reporting FAQS).
Information on the reporting company itself that must be disclosed in the BOI report filing:
- Full name of the reporting company
- Any trade name or ‘doing business as’ name of the reporting company
- Business street address of the reporting company
- State or Tribal jurisdiction of formation of the reporting company
- IRS TIN of the reporting company
And for each beneficial owner identified, the reporting company must provide:
- Full legal name, date of birth, current residential or business street address
- Unique identifying number from an acceptable identification document
- Image of the identifying document (Federal Register :: Beneficial Ownership Information Reporting Requirements)
Entities registered before January 1, 2024 have one year to file initial reports. Entities registered during 2024 will have 90 days from notice of registration to file. Penalties for reporting violations are severe, $500 per day reaching up to $10,000 in fines and up to 2 years imprisonment for criminal violations.
Practice owners who received Provider Relief Fund (PRF) payments exceeding $10,000 in the aggregate between July 1, 2022 and December 31, 2022 are required to self-report during Reporting Period 6 (RP6) which runs through March 31st.
Providers who fail to comply with this requirement by March 31st, 2024 will be deemed out of compliance with the program’s Terms and Conditions and could be subject to forfeiture of all PRF subsidies received during the second half of 2022. Check out the Provider Relief Fund Reporting Non-Compliance Fact Sheet at: https://www.hrsa.gov/sites/default/files/hrsa/provider-relief/reporting-non-compliance-fact-sheet.pdf.
More info about the self-reporting requirement and the March 31st deadline is available at: https://www.hrsa.gov/provider-relief/reporting-auditing.
As per the Americans with Disabilities Act (ADA), businesses and nonprofit organizations that serve the public are required to provide auxiliary aids and services when needed to communicate effectively with people who have communication disabilities. The ADA requires that the person with a vision, hearing, or speech disability can communicate with, receive information from, and convey information to, the covered entity.
Practice owners can claim the Disabled Access Credit (DAC) based on 50% of the eligible expenditures incurred during the year that exceed $250, up to a maximum tax credit of $5,000. Qualified DAC expenses include those “to provide qualified interpreters or other effective methods of making aurally delivered materials available to individuals with hearing impairments”. If you incur these types of expenses, be sure to remind your Client Manager which vendors you paid during the year to provide translation services so we can complete and attach a Form 8826 to your federal tax return to calculate this valuable tax credit.
Remember, a tax credit is a dollar-for-dollar reduction in your tax liability and is generally more valuable than a tax deduction which saves you taxes based on your marginal tax rate.
Fourth quarter estimated taxes are due 1/16/24. If we set up for you to pay quarterly estimates, you should have recently received your personalized estimate reminder in the mail.
For anyone paying estimated taxes, we now recommend that you make those payments online. Doing so is much safer than sending the IRS a check, and you receive an instant confirmation that the payment has been processed. Sadly, the IRS hasn’t done a great job processing their mail since COVID.
Plus, there is a new scam where people steal checks from a mailbox, “wash” the check with specific chemicals to allow them to change just the payee and the amount while keeping the signature intact, and then deposit that fraudulent check into their own bank account to steal the funds. Learn more about check washing at: https://www.experian.com/blogs/ask-experian/what-is-check-washing/.
To make the payment online if you haven’t yet set up an account with the IRS, simply:
1. Go to www.irs.gov
2. Click on Make a Payment (https://www.irs.gov/payments)
3. Click on Pay Now with Direct Debit (https://www.irs.gov/payments/direct-pay)
4. Click on Make a Payment (https://directpay.irs.gov/directpay/payment?execution=e1s1)
5. Select the following:
- a. Reason for Payment: Estimated Tax
- b. Apply Payment To: 1040ES
- c. Tax Period for Payment: 2023 (Make sure this doesn’t say 2024)
Answer the rest of the questions and you should be all set to make the payment. Massachusetts and most other states allow you to pay any state estimates due using their Tax Department website.
If you are a practice owner and run your practice as an S-Corp or Partnership, you can pay the Mass taxes due on the profit as a deductible expense to the practice known as the Entity Level Tax (ELT). More information about the ELT can be found at: https://schwartzaccountants.com/2022/05/elt-entity-level-tax-update/. The fourth quarter ELT payment is also due on 1/15. Please look carefully at the instructions sent as part of your practice’s 2022 tax return to see if an ELT payment has been set up for direct debit out of your business bank account.