Category Archives:Retirement Plans

6 Ways Independent Contractors, Physicians and Employees Lower Taxes, Protect Assets, & Fund Retirement

As an Independent Contractor Physician, when you are at work, you are complete control. In order to have that complete control on the rest of your life, you need to first look at the way you are earning your money, how it is being paid to you, and what you are doing with that money. There are several ways to change the amount of money you keep, which can result in you actually working less to earn the same amount of money, and it doesn’t matter how long or short the period of time you have been practicing. If you would like to learn how you, as a Physician can lower taxes and protect assets, keep reading.

Nice Assets

With some young doctors, purchasing expensive homes, cars, boats, and other toys seems to takeprecedence over saving for a rainy day. For a young physician starting out in a specialty with an early burnout rate, this is especially dangerous. What if you could have an extra 15% of your income? Not only would it make paying for these assets easier, it could be the easiest way to fund your retirement. and it doesn’t matter if you are the owner/partner in a practice, or if you are an employee.

Become Your Own Employer

Whether your are the owner/partner of a practice, an Independent Contractor Physician or employee, lower taxes comes from changing your compensation structure. This is the first step in taking control of your taxes. Becoming your own employer can be as easy a forming a physician corporation or an LLC. This allows you to pay some expenses direct from the business, and collect dividends on the profits.

Pay Yourself First

As the owner of your Physician Corporation, you get to determine how you compensate yourself. By paying yourself first, we are referring to the funds that will go into your retirement accounts. These funds are not taxed until you actually withdraw the money to spend it, so by putting as much as possible in to tax advantaged retirement accounts, you are effectively reducing the amount of income taxes you will pay annually, in addition to reducing your payroll tax expenses as well.

Social Insecurity

Everyone has to pay Social Security and Medicare taxes. What everyone does not have to do is overpay them. By reducing your Physician Salary to one that that is reasonable, you can reduce the Medicare taxes you pay, and eliminate the additional matching portion that your Physician Corporation would pay as well. For years citizens have been asking for the ability to invest their own social security funds, because few think it will be there when it comes time to collect. We can show you how to make it happen today.

Physician Pension

We have now arrived at the most important piece of information. The Physician Pension is not only the vehicle that will single handedly reduce your income taxes by nearly $50,000 per year, but it is the vehicle that will dictate how many years you work, how many hours you work each week, and even give you the flexibility to retire after just 15 or 20 years of work, rather than the typical 30 years. Your Physician Pension allows you to pay, as a business expense, a contribution that, given the right investment strategy, can allow you to take a salary of up to $195,000 each year in retirement. As an added incentive to take advantage of a Pension Plan, retirement plans are exempt from civil judgment in most states. This means that not only would you be adding to your net worth, but your Physician Pension protects assets. This is much more cost effective than most any other asset protection strategy.

Hire an Expert

You have gone to school for several years, completed Internships, Residency, and perhaps even a number of fellowships to attain the level of expertise you possess. When it comes to establishing your Physician Corporation and setting up your Physician Pension, make certain that you are working a Physician Business Manager who has the expertise you require. What you want is someone thorough and detailed, not a document filing service and a broker who is looking to sell you something, rather than actually managing your assets for your well being. Keep in mind that the ideas discussed above are just a sample of the various tax savings that are available to Physicians. You work hard for your money, and should look for every viable avenue to minimize your tax burden, but make sure you work with a professional. We take care of the areas of business you hate to do, so you can do what you love to do.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)

For a Limited Time, get FREE Incorporation with our Accounting/Payroll Services! Click here to submit your e-mail for more information.

5 Tips for Independent Contractors: Biz Start-up, Outsource Accounting, Reducing Self Employed Taxes

As an Independent Contractor, you literally have the best of both words. Not only do you get to determine how much money you want to make, and how hard you want to work, but also you can never be laid off. The downside to this, is that there are things that you have to do that can actually take as much or more of your time to complete than you actually spend generating income, and unfortunately, failure to perform these regular tasks can result in quite the headache, resulting in tax liens and perhaps even the loss of your business. If you are interested in maximizing the time you spend creating income, and reduce the time you spend on the other business related activities, while reducing self-employment taxes, read on.

Start Your Own Business

As the owner of a business, the IRS allows you a variety of tax advantages. The best way to take advantage of these is to step outside your role as an Independent contractor, and formalize the way you conduct business. This will enable you to shield yourself from potential personal liability, and allow you to take a salary and profits, rather than self-employed income. This alone will reduce your annual tax bill, and allow you to keep more of what you work hard to earn. You can even deduct that new laptop or iPad as a business expense. What typically stops people from going the next step is they do not know how to incorporate.

Incorporate

When you start a new business, there are many ways you can go about incorporating. You can simply go to one of the hundreds of websites that offer to help you incorporate online. They will give you the minimum that you ask for, and will leave you to pick up the rest of the pieces along the way. Honestly, the process is not that difficult, but like most things, it can become complicated quickly if you do not follow the proper steps. This is your business we are talking about. Don´t trust your business to the lowest bidder. You may get exactly what you pay for.

Outsource Accounting

As an Independent Contractor, you are an entrepreneur. This means you must be versatile and play a number of roles, from chief salesperson and bookkeeper to head marketer and bill collector. Doing your own small business taxes and accounting does not make you any money. Outsourcing your accounting will cost you less than hiring someone part time, and give you the expertise of having your own in-house accountant.

Hire a Corporation Service Company

As the owner of your small business, you have many important decisions to make. One of the most important ones you can make is to hire a corporation service company. Not only will they assist you in making sure certain things don´t fall through the cracks, but they can also provide you with someone to talk over other important decisions. You are in business to make money. Make the right choices early on, and you won´t regret them later.

Fund Your Retirement

Retirement plans can be extremely confusing to Independent contractors and small business owners. What you need to know is that there are options available to you that will allow you to put away more money for retirement than you may have known, and also that by doing this, you are not only reducing self employment taxes, but also your income taxes. The key is to start your own pension plan, and work with someone who has your best interests in mind.
You have either just set your inner entrepreneur free, or you are about to do so.

While this can be a scary time for some, you have the ability and the drive to make it a success. Be thoughtful and deliberate about each and every decision you make, and about every dollar you spend. Make sure that before you commit to something, it should either make you money, or free up your time to allow you to spend time making more money. Also, don´t be someone else´s guinea pig when it comes to your future. Work with professionals who are working with you, not just for your money. Remember, as the owner of the business, you are the one in control, so take the wheel, and enjoy the ride.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)

For a Limited Time, get FREE Incorporation with our Accounting/Payroll Services! Click here to submit your e-mail for more information.

5 Things Every New Physician Should Do to Lower Taxes and Protect Assets

When speaking with physicians, whether it is one on one, or in a group setting, two topics of conversation are a virtual constant, taxes and asset protection. Notwithstanding the litigious environment we live in, I can clearly see why physicians want to do whatever possible to protect their assets. Reducing taxes is something everyone wants to do.

Even if someone pays very little in taxes, they still want to pay less, so it only make sense that physicians want to keep more of what they make, especially after paying insurance and education costs. So if you would like protect your assets and pay less in taxes, read on.

Form a Physician Corporation

Establishing a Physician Corporation will allow you to pay various expenses from the corporation. Since these expenses are paid before you take your salary, they are deductible from your overall income, and are not taxed at all. Owning a Physician Corporation will also enable you to take advantage of other options which are only available to corporations. Pay Yourself a Salary – Of course you want to make as much money as possible, but in the end, it is really about how much you get to keep. By paying yourself the lowest possible salary, your overall tax burden will be lower, because you will not have to pay FICA taxes on the dividends you take from your Physician Corporation.

Contribute to Retirement Accounts

Your retirement accounts aid you in both reducing your taxes and protecting your assets. From a tax perspective, retirement plan contributions are not subject to income or FICA taxes, so the more you can contribute, the lower your tax bill. As it pertains to protecting your assets, in most states, retirement accounts are not subject to levy as payment in the event of a civil judgment. Therefore, the more you contribute to these plans, the more assets you have protected. Create a Physician

Pension

As the owner of your Physician Corporation, you are able to establish a Physician Pension for yourself. This does two things. First, it allows you to fund a retirement vehicle for yourself as an expense to the business. These funds are not taxed, and do not require you to take a significant salary in order to make the contributions. Second, as a retirement account, these funds are also protected from civil judgment in most states.

Hire a Physician Business Manager

At first glance, you may be saying to yourself that this is an unnecessary expense. With some additional time, you will come to realize that it takes some expertise and experience, and hiring a professional is well worth it. Protecting your assets and reducing your taxes is a full time job that takes expertise and experience. It also requires a disciplined approach that experience tells us is best implemented by someone other than yourself. After all, our experience has told us that more often than not, assets need to be protected from one ́s own spending habits, and perhaps those of a spouse or possible ex-spouse. Your Physician Business Manager will give you the facts; they will not tell you simply what you want to hear. While you may not always like the answer, you will appreciate the candor, and will always know that your best interests are always the first priority.

Trying to manage a significant income and sizeable assets on your own can be a daunting task and if not done properly can wind up unnecessarily costing you tens of thousands of dollars. After all, earning a significant income comes with a great deal of personal responsibility. If you feel like it may take more time and effort than you personally want to invest, don ́t be afraid to outsource it to a professional who will always look out for your best interests. You are a professional, and people look to you as an expert. You should not be hesitant in doing the same.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)

For a Limited Time, get FREE Incorporation with our Accounting/Payroll Services! Click here to submit your e-mail for more information.

5 Mistakes Most New Physicians Make Regarding Finances

Now that your Internship and Residency are coming to a close, you are now looking forward to being out on your own, doing what you love to do. You are about to reap the rewards, both emotional and financial for the years of hard work you have put in. Right now, before you make any type of financial decisions, realize that the decisions you make right now can have a dramatic impact on a physician’s financial situation for many years to come. If you do not take the proper steps, and file the appropriate paperwork at the scheduled times, you can find yourself paying significantly more in income taxes and also subject to IRS fines and penalties, and heaven forbid tax liens. Take the proper steps now, and start by hiring a physician business manager.

Forming a Corporation

While you can form a corporation online, and obtain you EIN number, most document filing services fall short of completing everything that must be done. You still must have a board meeting, issue shares, and determine your tax treatment. If you are going to form a physician corporation, do it correctly, and do it completely. If you are not sure about what to file, don´t be afraid to use a professional. You will be thankful when it comes to filing your first tax return.

Annual Corporation Filings

The day you form your corporation is only the beginning. You have annual filings that must be made, and you also have a requirement to act like a corporation. Acting like a corporation means you have documented board meetings, and these meetings are held on a regularly scheduled basis. If for some reason you are ever involved in litigation, these are the documents that are requested first, and are regularly used to “pierce the corporate veil.”

Accounting

You cannot be in control of your business if you don’t know what is going on. With bad numbers, or no numbers, you are flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous — misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, so if you don´t want to go back to school to get another degree in Finance or Accounting, don´t be shy in outsourcing these duties.

Tax Planning

You must remember that you are not only a physician, but you are also an employee of your Physician Corporation. This is important in that you are able to utilize your Physician Corporation to pay certain business related expenses, and fund your retirement accounts, prior to actually taking your salary. The net effect of this is a significant reduction in your annual tax bill. You are however, required to pay quarterly withholding taxes, in addition to matching Social Security and Medicare taxes. You may think that you can simply set money aside to cover this at the end of the year, but past experience has shown, this is not something you want to do.

Retirement Funding

As a physician, your retirement planning is more than just saving for the future. It is also the primary means for reducing your tax burden, in addition to a method of sheltering your personal assets from civil judgment. Be certain to take this seriously. You do NOT want to work with someone who is simply selling you products, and has no firsthand experience working with physician pensions. You have many more options than the average broker knows about, so be sure and work with a professional who has done this before, and really specializes in situations such as yours.

Now that we have gone through the various areas to pay close attention to, don´t let them keep you up at night. Each of the items covered above has a very specific procedure to make certain they are done completely and correctly. The main point is that while there are dreadful consequences for failing to take the proper steps, the rewards for actually taking those steps can be extremely rewarding financially. The moral of this is that while you don´t want to overpay for document filing, you do want to work with someone professional – someone who has experience. You also want to seek out someone you can trust to know that they are looking out for your best interests over the long term.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)

For a Limited Time, get FREE Incorporation with our Accounting/Payroll Services! Submit your e-mail for more information, or schedule a quick phone call with me here.