Little change for docs' personal returns
But your kids might benefit, says CPA
Just as there are few changes in the law which will apply to practices (see related story, p. 72), so physicians will find little in the new tax code that will affect their situation, says Brent Thomas, CPA, MBA, partner with the medical accounting firm Thomas Doll & Associates in Walnut Creek, CA.
"There has been a lot of news about the Roth IRAs and educational IRAs, but the income cutoffs for those programs really put them beyond the use of most physicians," he says.
A couple making more than $160,000 can't take advantage of the Roth IRAs, and the income limit for the educational IRAs is $100,000 per couple.
Children are eligible for IRAs
However, physicians can help their children take advantage of the new tax laws. For instance, any child over the age of 14 can set up a Roth IRA and put away $2,000 per year. That money is available for educational expenses and first-time home purchases. you give them $2,000 per year for 10 years to put in their IRAs, that's a huge chunk of money when they retire," he says.
While children younger than 14 can also have IRAs set up for them, they are taxed at their parent's rate until they reach 14, explains Thomas.
Thomas also likes to remind physicians not to concentrate solely on the tax side of their situation but to also use the new tax year to do an investment checkup. "Too many people focus on the tax side," he says.
"Don't run a tax screen and then base your investments on its result. Do your investment research first. Concentrate on your net worth after taxes, not your tax burden. And make sure that you have a retirement plan review annually by a certified financial planner who can run comparisons for you," Thomas says.
You have reached your article limit for the month. Subscribe now to access this article plus other member-only content.
- Award-winning Medical Content
- Latest Advances & Development in Medicine
- Unbiased Content