Tax planning for the dentist in an era of uncertainty
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Tax Planning for the Dentist in an Era of Uncertainty Presented by Erick Cutler, CPA Friday, November 30, 2012
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Transcript of Tax planning for the dentist in an era of uncertainty
Tax Planning for the Dentist in an Era of Uncertainty
Presented by Erick Cutler, CPAFriday, November 30, 2012
Current Tax Planning
No surprises
Use of retirement accounts
Depreciation deductions
Wages & withholding
Alternative Minimum Tax
Pay higher of Regular or AMT
2011 AMT exemption $74,450
2012 AMT exemption $45,000
AMT Calculation
Current 2013Taxable Income 275,000 275,000Sch. A Taxes 13,000 13,000Other not included deductions 5,000 5,000AMT I 293,000 293,000AMT Exemption <75,000> <45,000>AMT (Rate 28%) 61,040 69,440
Regular Tax 55,000 55,000
Anticipated Changes
Payroll Tax Holiday
Rate to increase (4.2% to 6.2%) on first $110,000 of employee wages
Depreciation
§ 179 Expense Election
2012 Expense $139,000 (2013 $25,000)
2012 Investment ceiling $560,000 (2013 $200,000)Bonus Depreciation (gone after 2012)
Excise Tax on Medical Devices
2.3% tax on sale of medical devices
Tax is paid by manufacturer
Not on items purchased by general public i.e. eyeglasses, contact, hearing aids, etc.
Capital Gains
Long term rates (15% to 18%)
Additional 3.8% could apply
Qualified Dividends
Marriage Penalty
Standard deduction to decrease
$11,900 for 2012
$10,150 for 2013
Medical Expense Deductions
2012 limit is 7.5% of AGI
2013 limit is 10% of AGI
Tax Brackets
Rate Single Filers Married Joint Filers Head of Household Filers
10% $0 to $8,950 $0 to $17,900 $0 to $12,750
15% $8,950 to $36,250 $17,900 to $72,500 $12,750 to $48,600
25% $36,250 to $87,850 $72,500 to $146,400 $48,600 to $125,450
28% $87,850 to $183,250 $146,400 to $223,050 $125,450 to $203,150
33% $183,250 to $398,350 $223,050 to $398,350 $203,150 to $398,350
35% $398,350+ $398,350+ $398,350+
2012 Brackets
Rate Single Filers Married Joint Filers Head of Household Filers
15% $0 to $36,250 $0 to $60,550 $0 to $48,600
28% $36,250 to $87,850 $60,550 to $146,400 $48,600 to $125,450
31% $87,850 to $183,250 $146,400 to $223,050 $125,450 to $203,150
36% $183,250 to $398,350 $223,050 to $398,350 $203,150 to $398,350
39.6% $398,350+ $398,350+ $398,350+
Expected 2013 Brackets
Hospital Insurance Tax (HI)
Applies to wages received with respect to employment in excess of $250,000 ($125,000 MFJ & $200,000 single HOH)
Rate is .9% on amount in excess of above figures
Also applies to self-employment income
Hospital Insurance Tax
TP Wages 225,000SP Wages 55,000SP Sch. C 20,000TP LLC 25,000
Total Wage and SE income $325,000 → $75,000 over threshold
$75,000 x .9% = $675 additional tax
Medicare Surtax
Imposed on the lower of the filers net investment income or the excess of MAGI over thresholds ($250,000 MFJ, $125,000 MFS, $200,000 single or HOH)
Rate is 3.8%
Medicare Surtax
Investment Income
Includes Not Included•Interest •Tax exempt interest•Dividends •Payout from retirement
plans (401k, IRAs, Roths, Profit sharing defined benefits plans
•Cap Gains•Annuities•Royalties•Passive rental income
Medicare Surtax
Wages 210,000Interest 2,000Dividends 8,000Cap Gains 70,000AGI 290,000 → $40,000 over MAGI threshold
Lower of:3.8% x 80,000 = $3,0403.8% x 40,000 = $1,520
$80,000 NII
Tax Planning Strategies
Manage your taxable income for 2012
Defer tax deductible expenses to 2013
Consider acceleration of capital gains
Business owners:
Consider pushing deductions to 2013(employee bonuses)
Defer purchase of depreciable assets
Tax Planning Strategies
Defer net operating losses to 2013
Consider restructuring investment portfolios to manage future Net Investment Income to avoid additional Medicare tax
Retirement plans (implementation & evaluation of existing plans)
Tax Planning in anEra of Uncertainty
Current year tax planning
Awareness of changes and the economic environment
Broadened planning perspective
For Additional InformationContact
Erick Cutler, Partner Goldin Peiser & Peiser, LLP
www.GPPcpa.comDental.GPPcpa.com
