May 2018 Planning Calendar


May is a good time to make charitable donation of clothing and household items gathered during your spring cleanup


Before summer kicks in, take a look at your asset allocation of all your retirement and non-retirement accounts, and consider rebalancing your accounts.

This Year’s Most Interesting Tax-Season Observations

By Andrew D. Schwartz, CPA

This year’s most interesting observation actually has more to do with next year’s taxes.? The tax software we use comes with a Tax Projection option, and I prepared a 2018 tax projection for many of the clients I met with during the winter to see how their taxes would change under the new rules that took effect on January 1st.

As far as I could tell, the healthcare professionals who are the biggest winners under the new tax rules are high-income married couples with children and with income ranging from $300k to about $500k.? Here is why:

1. Child Tax Credit:: Under the prior rules, families were eligible for a tax credit of $1k per child under the age of 17.? The problem was that this credit began to phase out once their income exceeded $110k.? The new child tax credit is $2k per child under the age of 17 and doesn’t begin to phase out for married couples until $400k of income.? Plus, there is a new $500 tax credit for older children and other dependents that also begin to phase out at $400k of income.

2. State Income Taxes and Real Estate Taxes: As everyone is well aware, the deduction for state income taxes and real estate taxes is now capped at a combined total of $10k.? Most married couples who own a home or earn a good salary in a state that has an income tax will see their deduction capped.? That being said, this deduction was already being limited. For 2017, married couples whose income exceeded $313,800 were seeing this deduction phase out by 3% of the amount their income exceeded that threshold. And then, the dreaded Alternative Minimum Tax (AMT) eliminated any remaining tax benefit. What this means is that the $10k now allowed might actually allow for a higher tax break for high income taxpayers than they were receiving pre-2018.

3. Personal Exemptions: The new tax rules eliminated the $4,050 tax break for yourself, your kids, and your other dependents.? This is no problem for high income taxpayers who were already not benefiting from their personal exemptions due to a combination of a similar phase-out threshold to itemized deductions, and then the AMT eliminating any remaining tax break for your personal exemptions.

4. Alternative Minimum Tax (AMT):? Looks like the dreaded AMT will affect very few taxpayers going forward.? Since married couples earning between $300k and $500k annually seemed to be the ones paying the highest amount of Alternative Minimum Tax each year, it stands to reason that they will benefit the most from changes made to this tax.

5. Lower Tax Rates:? A reduction in tax rates will reduce everyone’s taxes.? The higher your income, the greater your tax savings.

6. The New Qualified Business Income Deduction: There is a new tax break equal to 20% of your self-employment income plus your share of “pass-through” income from S-Corps and LLCs.? This new tax break is fully phased out for healthcare professionals whose taxable income exceeds $415k if married (or $207,500 if single). Married couples with taxable income of less than $315k (or $157.5k for single individuals) will get the full benefit of this new 20% QBI tax break.

Get a Tax Projection:

The only way to determine how the new tax rules will impact you is to work through a tax projection.? Now that April 15th has come and gone, your CPA would love to hear from you to help you figure this out.? From what I’ve seen, if you are married and earn between $300k and $500k, your federal income taxes will be $10k-$20k lower this year than what you paid for federal income taxes in 2017.

Prior Years Trends and Observations

Here are the most interesting trends that I observed during the prior 6 tax seasons along with links to those articles:

2017:? That tax season I noticed that more of my clients installed solar panels on their homes during 2016 than all of the prior years combined.

2016: The number of clients who instructed me to allocate $3 of their tax liability to the Presidential Election Campaign Fund, due primarily to the craziness brought on by the Trump/Clinton Presidential Election.

2015: The year of the energy efficient tax credit with lots of my clients purchasing solar panels, electric cars, and even re-charging stations for those electric cars, including my long-time Dr. Jim who purchased all three.

2014: With a variety of tax hikes taking hold in 2013, the trend that tax season was higher taxes on lower income for high-income taxpayers, with many clients getting stuck paying obscenely high balances due.

2013: This was the first tax season that I noticed a sizable uptick in the number of individuals taking advantage of Health Savings Accounts.

2012: Record low interest rates meant that many homeowners refinanced their home mortgages at least once during 2011, including all but one or two of my clients who had a mortgage.

Barton Associates Shares Webinar on Taxes for Independent Contractors

by?Jess Huckins

How can you make filing your taxes as an independent contractor as easy as possible? How will tax reform affect your locum tenens career in the years to come? Barton Associates’?locum tenens tax guide?author and healthcare tax specialist?Andrew D. Schwartz, CPA?addressed these questions and more in our recent webinar.

The 2017 Tax Cuts and Jobs Act contains provisions that may affect how independent contractors pay taxes on income earned in 2018. Watch our webinar recording to review tax basics such as common deductions, retirement accounts, health savings accounts, estimated quarterly taxes, planning tips, and considerations for [independent contractors and] locum tenens providers in 2018 and beyond!



About Jess Huckins: Jess Huckins is the managing editor at Barton Associates’ Peabody, MA, headquarters. She joined Barton after nearly a decade of professional editing in the publishing, marketing, and healthcare fields, and she holds a master’s degree in publishing and writing. Find her at? Twitter. If you would like to write for the Barton Blog, you can reach her at?

IRS explains What To Do If You Missed the April 18th Filing Deadline

?IR-2018-102, April 23, 2018

WASHINGTON – While the federal income tax-filing deadline has passed for most people, there are some taxpayers still facing tax-related issues. This includes people who still haven’t filed, people who haven’t paid their taxes or those who are waiting for their tax refund.

The IRS offers these tips for handling some typical after-tax-day issues:

Didn’t file by April 18?

There is no penalty for filing a late return after the tax deadline if a refund is due. Penalties and interest only accrue on unfiled returns if taxes are not paid by April 18. The?IRS provided taxpayers an additional day to file and pay their taxes?following system issues that surfaced early on the April 17 tax deadline. Anyone who did not file and owes tax should file a return as soon as they can and pay as much as possible to reduce penalties and interest. For those who qualify,?IRS Free File?is still available on through Oct. 15 to prepare and file returns electronically.

Filing soon is especially important because the late-filing penalty on unpaid taxes adds up quickly. Ordinarily, this penalty, also known as the failure-to-file penalty, is usually 5 percent for each month or part of a month that a return is late.

But if a return is filed more than 60 days after the April due date, the minimum penalty is either $210 or 100 percent of the unpaid tax, whichever is less. This means that if the tax due is $210 or less, the penalty is equal to the tax amount due. If the tax due is more than $210, the penalty is at least $210.

In some instances, a taxpayer filing after the deadline may qualify for penalty relief. If there is a good reason for filing late, be sure to attach an explanation to the return.

Alternatively, taxpayers who have a history of filing and paying on time often qualify for penalty relief. A taxpayer will usually qualify for this relief if they haven’t been assessed penalties for the past three years and meet other requirements. For more information, see the?first-time penalty abatement?page on [EDITOR NOTE: The IRS routinely waives penalties if you haven’t been subject to any IRS penalties in the prior three tax years.]

“Where’s My Refund?”

The “Where’s My Refund?“?tool is available on, IRS2Go and by phone at 800-829-1954. To use this tool, taxpayers need the primary Social Security number on the return, the filing status (Single, Married Filing Jointly, etc.) and the expected refund amount. The tool updates once daily, usually overnight, so checking more frequently will not yield different results.

Changing withholding?

Because of the far-reaching tax changes taking effect this year, the IRS urges all employees, including those with other sources of income, to perform a paycheck checkup now. Doing so now will help avoid an unexpected year-end tax bill and possibly a penalty. The easiest way to do that is to use the newly-revised?Withholding Calculator,? available on

Owe taxes or need to make a payment?

Taxpayers who owe taxes can view their?balance,?pay with IRS Direct Pay, by debit or credit card or apply online for a?payment plan,?including an installment agreement. Before accessing their tax account online, users must authenticate their identity through the?Secure Access?process. Several other?electronic payment?options are available on? are secure and easy to use. Taxpayers paying electronically receive immediate confirmation when they submit their payment. Also, with Direct Pay and EFTPS, taxpayers can opt in to receive email notifications about their payments.

Need to fix an error on a return?

After filing their return, taxpayers may determine that they made an error or omitted something from their return. Usually an amended return is not necessary if a taxpayer makes a math error or neglects to attach a required form or schedule. Normally the IRS will correct the math error and notify the taxpayer by mail. Similarly, the agency will send a letter requesting any missing forms or schedules. Taxpayers can use the Interactive Tax Assistant –?Should I File an Amended Return? -? to help determine if they should file an amended return to correct an error or make other changes to their return.

Form 1040X,?Amended U.S. Individual Income Tax Return, must be filed by paper and is available on? at any time. Those expecting a refund from their original return, should not file an amended return before the original return has been processed. File an amended tax return to change the filing status or to correct income, deductions or credits shown on the originally-filed tax return. Use “Where’s My Amended Return?”?tool to track the status of an amended return. Normally, status updates are available starting three weeks after the amended return is filed. Allow up to 16 weeks for