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Accountants with special expertise in physicians' financial affairs offer tips on saving tax dollars. For instance, physicians can make tax-free retirement fund investments of up to 25% of their incomes. An administrator should be hired to handle these funds. Also, business expenses for an incorporated practice must be separated from the physician's expenses. Differences between C and S corporations are explained., Retirement funds, incorporation among options for physicians April 15 is quickly approaching, and if seeing your tax forms stirs up some regrets about tax planning, take heart. Accountants specializing in [...]

Physician-hospital organizations (PHOs) offer solutions to managed care threats, but federal regulators are concerned about the possibility that PHOs may offer doctors financial incentives for medical referrals. The Internal Revenue Service has suggested that even if physicians provide 50% of a PHO's capital they should retain only 20% representation on the board. Also, tax-exempt hospitals wish to protect their status., Doctors entering physician-hospital organizations could face a regulatory quagmire. Federal regulators are pushing for doctors to bear an equal share of PHO expenses. But they are also poised to sharply [...]

Washington -- Despite a last-minute reprieve from Congress at the end of 2007, the alternative minimum tax threatens to hit many doctors, particularly primary care physicians, come April 15. And [...]

That the push is on for physicians to adopt electronic medical records is clear. The many health information technology bills in Congress, the newly announced Medicare EMR demonstration project, and [...]

Honolulu -- The AMA House of Delegates said physicians should get a full, refundable tax credit to help them buy and use health information technology such as electronic medical record [...]

News in brief - April 16, 2007 S.C. House passes bill requiring women to view ultrasounds before abortion South Carolina could become the first state to require physicians to show [...]

Lawmakers are outraged by a report showing about 21,000 physicians and others received Medicare pay in 2005 while owing more than $1 billion in taxes. Washington -- Federal officials said [...]

But a lawmaker warns that the tax could reappear in a new form as the measure works its way through the Legislature. Washington -- Connecticut lawmakers -- for now at [...]

News in brief - March 5, 2007 Tufts tightens bariatric requirements As of March 6, it will be much more difficult for members of Tufts Health Plan in Massachusetts to [...]

So you go to your mailbox, and you get an unpleasant surprise: The Internal Revenue Service says you owe back taxes. Or you figure out your tax bill for the [...]

* Physicians could see a tax break on the student loan interest they're paying if Congress passes a bill that relaxes existing rules. MED SCHOOL GRADUATES DROWNing in student loan [...]

GIVE YOURSELF A PRESENT THIS holiday season -- a head start on filing your tax return. Although most people don't even like to think about taxes until after New Year's [...]

Harris, a partner at Harris Kessler & Goldstein in Chicago, concentrates on health care law and has counseled physicians nationwide. He can be reached at (312) 280-0111 or by e-mail [...]

AT A GLANCE FIGHTING MAD Doctors describe some of the agency's proposed administrative policies, especially user fees, as unconscionable. Chicago DOCTORS ARE VEHEMENTLY opposed to the government's proposed Medicare user [...]

The concept of gift in relation to physicians being awarded for their work or small gifts for employees is described. It is proposed that the value of the gift should correspond to the length of time the employee has worked with the physician. The criteria of gift certificates according to its amounts differs in terms of tax is detailed.

Physicians faced with the problem of offsetting their taxable income with deductions should consider opening a tax-deferred retirement vehicle, such as an IRA. In addition, a portion of nonemployee payments can be deferred in Keogh plan or a SEP. Personal property and real estate are also deductible items, and interest payments on home equity loans. Losses in rental properties can be deductible up to a certain income., Q: My 1996 income is up, and I anticipate having to send a check to the IRS when I file my income tax return on April 15. What type of [...]

The Small Business Job Protection Act, Health Insurance Portability and Accountability Act, Personal Responsibility and Work Opportunity Reconciliation Act, and Taxpayer Bill of Rights 2 that were passed in 1996 contain provisions that reduce the tax burden of physicians and increase the amount of tax deductions they can make with regard to their practices. Starting in 1997, physicians will be able to create medical savings accounts for their employees, deduct up to $18,000 in new equipment and furniture expenses, and benefit from greater health insurance premium deductions., Q: I understand there are new tax laws that may affect my practice. What are some of the changes that I should be aware of when managing my practice? A: [...]

The Internal Revenue Service (IRS) has the right to penalize doctors who profit from financial deals with nonprofit hospitals under legislation signed into law on Jul 31, 1996. The legislation also gives the IRS new legal recourse against individuals who illegally benefit from charitable institutions. The rules are contained within the 'Taxpayer Bill of Rights 2.' Hospital managers, trustees and directors will be affected by the legislation., Doctors who negotiate cushy financial deals with nonprofit hospitals may face steep, new financial penalties if they hold 'substantial influence' over the tax-exempt organization. That's because a bill signed into [...]

Many physicians contribute to qualified retirement plans (QRP), such as 401(k) plans, individual retirement accounts, and profit-sharing plans, but taxes could ultimately strip QRP savings of 85% of their value. That is due in part to eight federal tax-law changes enacted since 1980. Distributions exceeding $151,550, as of 1995, are subject to a 15% excise tax. The other taxes to which QRP savings are subject are discussed., Editor's note: This is the first of two parts on retirement planning. Next month, we'll talk about alternatives that may save you money. If you are a doctor who has [...]

Physicians seeking to reduce their 1994 tax bills should make a reduction in 1994 adjusted gross income their primary objective. Methods to reduce income include shifting it into 1995, sell losing investments and increasing deductions. Capital losses are allowed up to $3,000 annually and excess amounts can be carried over into the next tax year. Deductions include education expenses, unreimbursed employee business expenses and expenses incurred to collect or produce income., Q: As the end of 1994 is approaching, I am wondering what I could be doing to reduce my 1994 tax bill. Are there any deductions that are frequently overlooked [...]

A Minnesota District Court justice ruled that a 2% tax on gross revenue from Minnesota patients who received medical services out-of-state was unconstitutional. The lawsuit, Baertsch v. Minnesota Department of Revenue, was financially supported by the American Medical Association and was filed in Nov 1993. The tax was part of the MinnesotaCare legislation enacted in Oct 1992. Physicians outside of Minnesota who treated Minnesota residents were taxed 2% of revenue resulting from the service in order to finance the MinnesotaCare program., The AMA scored a victory when a Minnesota judge ruled that the state cannot tax physicians practicing and living outside its borders. The AMA spearheaded the lawsuit and provided much [...]

Rep Pete Stark advocated taxing physicians and hospitals directly for health care reform at a hearing on Capitol Hill. He proposed allowing providers to pass along the costs to consumers. However, providers would find it difficult to charge higher fees because of a proposed cap on insurance premiums and other reform measures. Legislators also complained that the full reform bill will not be available until the end of Nov 1993. At the same time, health industry lobbyists called for more budget flexibility than is currently being proposed by the Clinton administration., Congressman says it would be easier than taxing public WASHINGTON -- If Americans won't pay new taxes to finance health reform, California Democratic Rep. Pete Stark has a suggestion: Tax [...]

The Internal Revenue Service (IRS) published a handbook to define tax-exempt standards for an integrated healthcare delivery system that provides both hospital and physicians' services. A system will be considered a safe harbor if doctors exercise no more than 20% of control. Standards are outlined for contracts between hospitals and physicians, determining fair market value of a practice and transferring assets., Guidelines detail rules on physician involvement in integrated delivery For the first time, physicians forming integrated delivery systems have concrete guidelines on how to gain tax-exempt status from the Internal [...]

The Internal Revenue Service (IRS) is scrutinizing physician control over the management of integrated health care systems and the amount of compensation some physicians receive when selling their practices. The IRS is concerned that networks may pay physicians a high price for their practices that amounts to payment for referrals. In addition, the IRS is looking at networks that buy a physician's practice and then allow him or her a decisionmaking role in the network., The Internal Revenue Service is taking a tough new look at physicians' roles in integrated delivery systems. IRS officials say they've taken this aggressive stance because they think some vertically [...]

Several states have begun to tax physician revenues to fund public health programs but are being fought by local medical societies. For example, Kentucky has passed a law taxing physician gross receipts, but the Kentucky Medical Assn is suing the state. The new law would charge physicians 2% of their gross receipts, hospitals 2.5% and pharmacies 25 cents per prescription. The proceeds, about $225 million, would compensate for Medicaid matching funds lost because of the restrictions on provider taxes., Several states are beginning to tax physician revenues to fund rapidly growing Medicaid costs and other programs extending medical benefits to the poor and uninsured. But state medical associations are [...]

The Internal Revenue Service (IRS) is studying the income tax returns of physicians who call themselves independent contractors but work at hospitals. The IRS is comparing hospitals' reporting forms with earnings reports for doctors who funnel their incomes through private corporations. Clues to employee status include payment of wages, hospital billings and collections for physicians' services, and provision of liability insurance. The IRS may disqualify the private corporations' status, which would bar physicians from the corporation's tax-free benefit plans amd deferred earnings., The Internal Revenue Service is taking a long, hard look at double-dipping doctors who function as hospital employees, yet reap the tax benefits of owning their own corporations. In fact, [...]

A recent Supreme Court ruling has disallowed the home office deduction for doctors who see patients or do work in their homes. Nader E. Soliman, an anesthesiologist who worked 30 to 35 hours a week at home, had his $2,500 annual deduction for his home office disallowed. The Internal Revenue Service ruled that while Soliman's home office was essential, it did not serve as his primary place of business., Thousands, perhaps tens of thousands, of physicians who deducted the cost of home offices from their federal income taxes in recent years face possible back taxes, interest and penalties. If [...]

The Internal Revenue Service (IRS) has developed new guidelines for determining status as an independent contractor. In general, if an organization has significant control over a worker's performance, that worker is considered an employee. Physicians with contracts that include non-competition clauses are classified as employees. Physicians reclassified as employees would be entitled to a refund of Social Security taxes, but would lose business deductions and the right to contribute to a Keogh plan., The IRS is taking a closer look at independent contractors. Despite what you may have agreed to, the IRS may find you or people who work for you to be [...]

The Minnesota State Senate, considering financing for health care reform, favor taxing providers, while the House favors a general income tax. The Minnesota Medical Association and the Minnesota Hospital Association are fighting the Senate bill, which provides for the medically indigent $200 million a year in health insurance, with funding increased to $1 billion by 1999. A provision requiring certificate of need was eliminated from the bill. Named HealthRight, the law sets premiums for health insurance according to family income., Minnesota physicians threatened a mass exodus from the state if legislative leaders, locked in debate at AMN press time, agreed on a 2% providers tax to fund a major health [...]

The tax-planning season cometh. And accountants says it's a good idea to start early to avoid the rush. 'If you wait until Dec. 15 to take a look at your [...]

Tough IRS proposals on S corporations dim luster of tax, liability benefits The tax and liability advantages of S corporation status have made it a haven for some physicians. But [...]

Interest in incorporation re-emerging The tax law changes in the mid-1980s caused physicians to abandon incorporation, but now the pendulum appears to be swinging back. 'A lot of doctors [before [...]

There are many income tax deductions that physicians may be eligible to claim on their tax filings with the Internal Revenue Service. Many state taxes are deductible on federal tax forms, such as the personal property taxes paid for automobiles or motorcycles, or those paid as state and local income taxes. Charitable contributions and periodic donations to religious bodies are also deductible, as are the noncash donations that take the form of unwanted clothing or household merchandise. Deductions allowable against outside income include expenses incurred in the earning of that income., Q: My income increased substantially in 1995. I know my income tax bill will also increase, but I am trying to mitigate the damage by making sure I have taken [...]

The Clinton administration plans to reintroduce in 1995 tax penalties for tax-exempt hospitals that use funds to provide excessive benefits to physicians or other hospital insiders. Such sanctions failed to pass Congress in 1994. Hospital insiders would be penalized with a 25% tax on excessive benefits, and trustees or officials that approved the benefits would be penalized with a 10% tax on the amount of the benefit, up to $10,000. Excessive benefits would be defined as economic gain beyond the value of services provided to the hospital., WASHINGTON -- Doctors dodged a tax bullet this fall when Congress abandoned reform initiatives including proposed intermediate sanctions. But they'll be back soon, experts say. The sanctions would establish stiff [...]

A Minnesota court has ruled that the Minnesota Department of Revenue had no right to tax out-of-state doctors 2% on gross income for treatment given to Minnesota residents. The case was brought to court by the state medical societies of Wisconsin, North Dakota, South Dakota, Iowa and the American Medical Assn. The case's victory was based on due process and commerce principles. Minnesota had helped finance its own state health reform initiative with the tax., Organized medicine scores a victory against strangest provider tax yet Minnesota lawmakers looking for new ways to pay for health system reform extended the long arm of taxation a lithe [...]

A California Superior Court judge has ruled that the redirection of funds generated from physician licensing to meet general-government needs amounts to double taxation of doctors and is therefore illegal. The decision, in a case brought by the California Medical Assn, could result in lower licensing fees and in more adequate funding for the state's medical board., California doctors have plugged a leak in state medical board coffers with a court victory that could cut licensing fees and bolster public protection. California and many other states routinely [...]

Physicians should not be asked to pay a special tax on their income to finance Medicare and other programs. No other profession is taxed in this way, yet several states, such as Kentucky, have attempted to levy such a tax. Paying to support public health care is the concern of every citizen, not just doctors. The provider tax is analogous to taxing teachers to finance the public schools., Lawmakers have figured out a new spot to put a toll booth --right outside the doctor's office. That's the wrong place, in our opinion. It's easy to see the appeal [...]

A Kentucky court has declared that taxing physician revenues to pay for Medicaid is unconstitutional. However, a similar case in West Virginia is still pending. The Kentucky Medical Assn, in conjunction with six physicians and nine HMOs, argued that there was no legitimate basis for taxing physicians more than the general public for a program that benefits the entire community. Several other states, including Minnesota, are considering similar taxes., A Kentucky court has declared a state tax on physical revenues unconstitutional and ordered money already collected be returned to doctors. State officials promise to appeal the ruling, however, and [...]

The Omnibus Budget Reconciliation Act of 1993 includes many provisions that affect physicians. For example, a new tax bracket at 36% was created for married couples filing jointly who make at least $140,000 and single individuals who make at least $127,500. In many cases, the rules may increase taxes; these can be paid in three installments over two years. However, the new laws do not affect capital gains, which are still taxed at 28%. Additional provisions of the new laws are listed; each element is explained in detail., After seeing a blizzard of confusing and contradictory articles in the press, we reviewed the Revenue Reconciliation Act of 1993 to find key provisions that affect physicians. Here are the [...]

The Health Care Financing Administration will again allow hospitals to tax providers to generate more federal matching funds for Medicaid; the hospitals then return the money to physicians in the form of higher payments. The rules, published on Aug 13, 1993, reverse interim rules published on Nov 24, 1992., In a regulatory about-face, hospitals again will be allowed to generate more federal matching funds for their state's Medicaid programs by taxing providers and returning the money to them through [...]

Pres Clinton's new federal budget plan includes reinstatement of a tax on the purchase of certain vaccines. The tax is intended to build a fund for compensation of immunization-adverse-reaction victims. The tax would amount to $4.56 per dose of diptheria, pertussis and tetanus vaccine, $4.44 for measles, mumps and rubella vaccine, 6 cents for diptheria and pertussis and 29 cents for polio vaccine. The tax would be imposed on vaccine that has been in stock since Aug 10, 1993, and it would be due by Feb 28, 1994., The taxman is coming early next year, with his hand out for back excise taxes on childhood vaccines. Besides creating a new immunization program for low-income children, President Clinton's new [...]

Physicians oppose efforts by some states to raise funds for Medicaid by taxes on providers. For instance, the Oklahoma State Medical Society and the Iowa Medical Society are both lobbying proposed taxes on physicians and hospitals. In 1991, Congress passed a law that restricted provider taxes to a maximum 15% of Medicaid funds. In Washington, DC, hospitals and nursing homes have agreed to pay taxes, but physicians denied Mayor Sharon Pratt-Kelly's request that they share the tax burden., Faced with severe budget crunches, several states are trying to tax physicians to come up with federal Medicaid matching dollars. Physician groups in most of the states are angrily denouncing [...]

Florida and Virginia physician groups challenged the practice of charging physicians annual fees to fund birth injury compensation programs. The Florida Supreme Court rejected Florida Medical Association arguments in Feb 1992, and decided that the fees do not violate physicians' constitutional rights. The Virginia Medical Society was more successful. It won passage of a bill that requires the state to suspend physician assessments any time the birth injury compensation program is adequately funded., State physician groups are approaching a one-for-two record this year battling what they say are unfair special taxes on doctors. Florida doctors lost while Virginia doctors took a step toward [...]

Can states tax all physicians, not just obstetricians, to compensate families whose babies suffered severe birth-related neurological injuries? That's the constitutional question the supreme courts of Florida and Virginia will [...]