Several physicians usually face the problem of not knowing where to start their medical practice. The most ideal first step is to be referred to the appropriate professional team. Physicians can concentrate on patients and practice working with a certified public accountant (CPA), a wealth management team, an attorney and a practice manager.
Fadi Salibi MD, infectious disease physician in Henderson, Nevada, stated that “I find it difficult to create time and face the financial and business aspects of things, but using the appropriate team can ensure the proper implementation of the practice.”
It’s good to enlist the services of an accountant or auditor, as accountants ensure the business operates efficiently.
Set up a sound business plan.
Always keep in mind the worst possible event that could occur during the planning phase of the practice. The possibility of a lawsuit,negative cash flow and excessive taxation are some of the biggest financial concerns that pose a threat to the financial wellbeing of the physician. Many physicians begin by selecting the corporate institution that carries their limited liability burdens.
The most ideal corporate body that can handle and suit the model of your practice and residential state can be chosen by your legal counsel. Your legal counsel can progressively provide assistance that can safeguard your wealth using trust planning and other techniques with your financial adviser. You can employ the services of an insurance professional to adequately insure your cash flow against death and disability risks. A wealth manager and your attorney should work with a certified public accountant (CPA) to determine the proper taxation that should be incurred by your corporation.
“With the help of an amazing plan and an amazing team, I can branch out into other business areas and get the proper feedback and support.” Said Salibi. “Physicians should be able to diversify their flow of cash and develop a thorough business portfolio.”
Employ taxes that have a retirement plan.
The two, common issues facing physicians after the basics have been established are employees and taxes. “As the owner of a practice, my main worry has always been discovering and retaining good employees and taxes have always been my major worry.” Salibi indicates.
Collaborate with your financial management team to discover and execute the proper retirement package that can solve these issues by providing rewards to employees and device a method where the physician can save money on a pre-tax basis towards their retirement that will find a solution to the significant tax burdens. Also, insurance products, annuities, and unqualified plans can be utilized to compensate members and create a control model on how practice owners can compensate and keep these individuals.
Look for good employees.
A few physicians usually linger until things have gone out of hand, before seeking the help of a proper professional team to develop part of the basic requirements. Locate the appropriate experts and start embarking on a discovery process with them.
This process should be carried out annually and this can be started with the basic steps provided here. Some questions would be asked by your chosen team and likewise, you. Make sure that your professional team works hand in hand and a good contact exists. The best possible event is the one in which you create a practice that protects against credits, that is tax-efficient and establishes financial security that runs for a lifetime.
4 SIMPLE END OF THE YEAR TAX PLAN THAT SMEs SHOULD CONSIDER
As you look forward and start making plans for the new year coming around the corner, we have compiled some end of the year actions that can be performed to limit your tax expenses and reduce your need to get a lawyer.
Perform a quick end of the year analysis.
It is important at this point, to take time to evaluate your tax expenses. There is a withholding calculator at the Internal Revenue Service (IRS) that can be used to calculate the anticipated tax debt. Simply use the available information from your expected profits, rental operations, wage income, recent deductions, and any other vital information, to get a clear idea of the expected amount that will be paid. It is also a great idea to enlist the help of an auditor or accountant, as accountants ensure the efficient running of the business.
Identify your calculated taxes.
Find out about your debt from the calculated tax expenses by using the predicted tax liability. People, from shareholders, sole proprietors, partners and corporations who anticipate tax debts above $1,000 are expected to pay calculated taxes. Corporate bodies are likewise expected to pay the calculated tax expenses if they are likely to owe above $500. You are expected to pay the fine to the IRS if you are paying less than the required amount of the calculated tax. The IRS Publication 505, Withholding and Estimated Tax can be examined for additional information.
Reduce spending accounts.
Your flexible spending account (FSA) can still be used from now till Dec. 31. Flexible spending accounts enable individuals to have access to their tax-free funds for dental and medical purposes. The account at most times has a rule of “use it or lose it” which implies that you will not be qualified for the funds without paying at the end of the year. Although other plans permit carryover or a period of grace, your provider will, however, provide the required information concerning the terms and conditions of your spending plan.
Speed up deductions.
You don’t have to wait until the beginning of another year before paying for some specific expenses. It is a good time now to pre-pay anticipated expenses of the following year. Therefore, making the payments of the expenses that are expected to be paid at the start of a new year, beforehand should be considered.
This, however, depends on whether the bill for tax reform becomes a success and the projected tax conditions and calculated profits of the following year in which the tax reforms will affect your outcome. It is, therefore, a good idea to enlist the help of a tax professional or an accountant and create an appropriate end of the year tax plan.
Tax and accounting update.
Tax and accounting update is derived from the published report of online research and news platform of Checkpoint and collated by Thomas Reuters.
The Tax & accounting update is a brief manual of the significant issues emerging from the regulatory and administrative channel.
For more information, here’s the link at Tax.ThomsonReuters.com
Golden indicated that the FASB attempts at aligning with the IFRS when possible.
The Chairman Russel Golden stated that FASB has attempted to align the international financial reporting standards with the U.S. GAAP. “We consistently contact the staff and members of IASB concerning their research plan on projects so that research activities can be shared that will enable a progressive matching solution that is attained” as reported by Golden at the 18th Annual Financial Reporting Conference held on May 2nd at the Baruch College in New York.
The remarks from Golden follows a previous argument within the accounting community if IFRS and GAAP must merge into a single global standard. Which was motivated when a joint Memorandum of Understanding was signed by the IASB and the FASB to harmonize a series of important accounting guidelines.
The project was later abandoned by the committees who are in charge of creating the joint accounting guidelines when they realize that the United States do not have any plan of replacing GAAP with IFRS. These remarks made by Golden show that combining global financial report has not fully been abandoned. Members of FASB indicated that the movement would be at a disadvantage to companies in the U.S. because of the consequences that could affect textbook, learning and system changes.
Smaller companies indicated that new accounting guidelines pose a threat against automated systems.
At the release of new accounting guidelines, automated systems in smaller companies are threatened if the important data are not predicted or developed into the system. The members of the Small Business Advisory Committee in FASB reported on the 2nd of May that the notion of half the data in the world was created in the last four years is possibly true said the CFO of CTI Industries Corp, Frank Cesario.
It stated that new technologies have been developed to capture the enormous amount of data, but the challenges are that the bits of transaction that can be differently captured when analyzing new accounting guidelines. Several discussions have been raised since the release from FASB about utilizing technology in financial reports along with its advisory committee as a component of the requirement for the Sarbanes-Oxley Act that FASB is updated when creating the guidelines for the changing parameters. Members of the board have been putting an ear out to understand the problems that companies encounter as indicated by a member of FASB, Harold Schroeder. Schroeder continued by stating that due to the new changes in the world, it is important to ensure that the board is fully prepared to handle the technological consequences of these modifications.
The proposal for a change in the standards for financial tools concerning the issued IBOR reforms.
Taking into account the reform of the standards for interest rate, for instance, the Interbank offer rates (IBOR), financial institutions and other multinational banks are permitted to present proposal comments that will correct both old and new financial tools. The modifications are issued by the IASB to remove doubts that surround using hedge accounting. The standards will result in a level of doubts in the absence of the proposed modifications that could make a company abandon the use of hedge accounting just because of the inability of the issued reform to forecast these analyses as stated by the summary from IASB.
This could limit the usefulness of the information in the investors’ financial statements. For instance, the international financial reporting standards demand that companies apply predicted information for hedge accounting. With the ongoing standards for the reform of interest rates, there is still doubt about when the current standards for interest rates are substituted. The board explained that the document will be finalized later in the year, so companies should comment on or before June 17.
Hamm: Cybersecurity should be considered by accountants or auditors as a component of risk assessment.
Kathleen Hamm, member of PCAOB stated that auditors should put cybersecurity into consideration as a component used to carry out a risk assessment of the financial statements of the clients of their public company. She gave this comment at the 18th Annual Financial Reporting Conference held on the 2nd of May in New York resulting from the issues posed by cybersecurity to companies. Numerous significant breaches in previous years have revealed the private data of customers. Although many companies have advanced and implemented safety measures to avert further breaches, the intensity and occurrence of cyber-attacks are expected to increase.
Although the role of accountants or auditors in the security of their client’s data is limited, Hamm believes they can do more. Hamm stated that whether a cyber-incident has happened or not, a risk assessment should be carried out by the accountant or auditor during the process of planning and this assessment should cater for any risk associated with cybersecurity that could negatively affect the financial statement of the company.