In this latest podcast, Dave sounds off on a recent pocket guide he read, How To Keep The IRS Out of Your Pocket.
There were three fantastic strategies that every physician who owns their own practice or other business should know.
– The first strategy involves your kids and a great tax strategy to save $6,000 that millions of business owners miss!
– The second strategy shows how you can have fun in an exotic location and write off some expenses!
– The third strategy involves two locations and one of them can lead to huge tax deductions!
(Note: I outsource transcription efforts, please forgive in advance any grammatical errors. I just simply don’t have time to review it all)
This is Dave Denniston and welcome back to the Freedom Formula for Physicians podcast. Well, this is tax reduction month and free the month from taxes. And so today I am going to tell you about this painful deal I got that is really really good. Particularly for those of you that want to own your own practice or currently do.
I happened to be connected with a number of different individuals as part of a mastermind. And in that mastermind we were talking about different marketing programs and things that a lot of people do. So I perceive this sort of pocket guide that’s from a CPA that’s called how to keep the IRS out of your pocket. And what`s so cool about these particularly [?] specific strategies for physicians in practice. So I just want to share with you three of them that I thought could help you out and apply to your situation.
Now the tax strategy numbers two talks about hiring a kid and what you can do with your kids is if you hire them on they could pay them up to 6200 bucks and all of that is tax free; that is all of their earnings. So think about that for a second; 6000 bucks if you have two kids essentially you can get a pass on federal and state income taxes for twelve grand. If you are in the 50 % bracket between federal and state, that’s like having 6000 dollars more in your pocket to give to your kids. And what you want can do with that money if you want to grow tax free, just put that in a rough IRA.
There are other couple stipulation here that I am going to check with you real quick. Now they do have to be under 18 years. They do have to be under 18 years old and they have to be greater than 7. So 7, 18 is kind of the squeeze box for people to hit with having their kids on as employees. And then you have to pay them a reasonable wage to do what they do. So you can have your kids just to help you in your office for a little bit. Maybe they help your filling or something like that. And obviously if you pay them a 1000 dollars an hour that`s probably not going to work. But I am sure your kids can help you out with a whole variety of different tasks and utilizing their skills in helping out with a few things. They can upgrade the office, they can hangout the office for a whole day and there you go. You can end up paying them close to 3000 dollars or a 1000 dollars for hanging out with you for a whole week over summer break or something.
Now the tax strategy number three that was in this guide that I thought was really awesome; it talks about vacation expenses. Now often as physicians there are CMEs we have to do. So does continuing medical education places. Well, what if you end up going to a fun place; to go to Florida or The Bahamas or Costa Rica or someplace to get your CMEs. Consider trying to plan a vacation around that. And so that way your flight is deductible, your meals are deductible and as you continue on and meet with other people and hang out and get to learn things, this can make your trip deductible. Now if your spouse is part of your practice you can write off her expenses. If your kids are part of the practice you can write off some of those expenses. Now I would caution you in terms of going to Disney Land or someplace like that.
Another common strategy that people do some other vacation when they own their own practice is what I call “a board of directors meeting”. And it`s pretty simple, you just take some minutes of the meeting, you talk some business, you go out on very nice dinner, maybe stay overnight in a hotel. And you do this cordially. So it’s a great chance to connect with your spouse, write some money off, have a night on the town. But you have to make sure to record those minutes otherwise it`s not going to work.
Now the tax strategy number five that was listed here in this document is another one that a lot of people may settle on. And what you can do is; you have a home office, back ten years ago you know you couldn’t really take a home office [?]. But now any place that you do some work. So if you are working on your computer at home, just checking your email, you`re doing the administrative stuff, maybe you are writing a book if you own your practice or you`re part of your home office can be a deduction. Which means you can write off utilities, you can write off part of your mortgage.
There is all kinds of write offs that you can do with your home. And just make sure to be familiar with the rules and how it works, but is awesome and fantastic.
So again this was coming from a different gentleman, how to keep that IRS out of your pocket. The company`s core financial connections and you could find this information at the website which is thinkontax.com. So make sure to check out that website; thinkontax.com. Also my book “the freedom formula for physicians” there is tons of tax ideas and different things you could take away which you could buy the book a doctor freedom book that come directly from me at this camp. For the Freedom Formula for Physicians podcast this is Dave Denniston, make sure you subscribe, check in, let me know if you have any questions about taxes. Have a good one look forward to seeing you soon. Bye bye.