Category Archives:Taxes

Plug and Play for Doctors: Forming a Corporation, PA, PC, Or LLC

Now that you have completed your Internship and Residency, you are now an independent contractor physician, and about to make more money than you have ever made before. The next question in your mind is; “How do I keep what I make, and not pay out everything I make in taxes?”

To avoid the painful consequence and get all of the benefits, here are 5 things that must be done when forming your Corporation.

• Why Incorporate – Incorporating shields you from some liability by providing you with a corporate veil. It also provides you with the ability to pay certain expenses on a pre-tax basis, while also allowing you the opportunity to fund a variety of retirement plan vehicles, thus reducing your taxable income

• Form a Corporation – Forming your corporation is done in your state, and requires the filing of Articles of Incorporation with the Secretary of State. This can be done yourself, or you can hire a physician business manager to work with you.

• Apply for an EIN Number – Your EIN Number is the social security number for your business and is obtained from the Internal Revenue Service. It is necessary for establishing any bank accounts and retirement accounts, and will also be needed for your payroll taxes and annual corporate tax return.

• Become a Subchapter “S” Corporation –The amount of money you pay in income and payroll taxes is dependent on how you declare your income. By filing your “S” election form with the IRS, you are saying that your corporation will not pay income taxes, but that the profits of your corporation will be reflected as income on your personal tax return. Failure to file this form in a timely manner means that your corporation will pay taxes on its income, and you will then pay personal income taxes on this same income. The dreaded “double taxation”.

• Properly maintain your corporate records – Most people go take the steps listed in the last 3 items, and stop there. After your corporation has been filed, you then must hold an Initial Meeting of the Board of Directors, and perhaps file a fictitious name announcement if it applies in your situation.

After you have done all of this to make your corporation effective, please do not forget to do the following on a regular basis: File your Annual report, file quarterly payroll tax returns, hold regular board of director meetings and file your annual corporate tax return.

Selecting the right type of structure for your business is only the first step. Making sure you take the necessary steps to follow through and get everything done correctly the first time is paramount. So take your time, don ́t make any hasty decisions, and by all means, if you are going to hire someone to assist you along the way, use these 5 steps to help you find the partner that you can trust to be there to assist you after you pay the filing fees.


My Professional CFO, LLC, is a professional services firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians 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!

How to Reduce Self Employment Taxes & Increase Retirement Savings as an Independent Contractor Physician

As an independent contractor physician, you have spent countless hours in the classroom and clinical training, and have finally reached the point at which you are finally reaping the financial rewards for all of your hard work, only to find out that you have to give more than half of everything you make to the government via income and self employment taxes. Read on to learn how to reduce your tax bill, and pay yourself first.

Physician Corporation – Make sure you Incorporate properly, and file the correct forms in a timely manner. Mostdocument filing services will file and charge you for the forms you request. What you really want is someone who willtell you the correct forms for your circumstances, assist you in completing them, and file them in a timely, cost effective manner. This is definitely a case of getting what you pay for, but you also do not get what you do not pay for.Unfortunately, not filing a correct form in a timely manner could cost you tens of thousands of dollars annually.

• Physician Self Employment Taxes – Set up your payroll and pay business expenses on a regular schedule. By having your business expenses and monthly payroll done on a regular schedule, you will reduce the chance that something gets overlooked, which could result in late charges and unnecessary penalties. In addition, paying yourself a fixed monthly salary will put you in the habit of saving more, and make the actual running of your business more streamlined.

• Physician Retirement Accounts – Use all possible retirement plan vehicles to their maximum benefit. While the most common retirement accounts include IRA’s and Roth IRA’s, as a corporation, the options are expanded significantly, allowing you to not only save a significant amount toward your retirement, you can also shelter these funds from taxes and judgments as well.

• Physician Investment Advisor – Hire a professional to manage your assets based upon your personal goals and objectives. You are a professional, which has taken many years of education and training. Hire a professional to manage your assets, as this will decrease the likelihood of the pitfalls met by many a part time investor, but when hiring a professional, hire someone who gets paid over time, not paid by what you invest in. Only use a Registered Investment Advisor, and never pay a sales commission.

• Physician Corporation Compliance – Keep your corporation filings current to maintain these and many other advantages that are open to you. In order to have the advantages of being a corporate entity, you must behave like a corporate entity, which includes the filing of monthly reports and holding board meetings. Failure to complete these will open you up to personal judgment and potentially hefty IRS penalties. You have worked hard to get where you are. Take the necessary steps to protect yourself from paying tens of thousands of dollars in additional taxes. While technically, you can do it all yourself, it is highly recommended that you hire a professional and do it right the first time.


For a limited time, receive FREE Incorporation when you use our Accounting and Payroll services!


My Professional CFO, LLC, is a professional services firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians 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 the 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

How to Form a Physician Corporation: A Step by Step Guide

As a physician, you have either just signed with a contract group, or you have decided to do some shifts as a Locum Tenens. There is a chance that your contract group will require you to be an employee, but that is not often the case. Now you need to form a corporation. We are often asked why. The simple answer is that it draws a clear line between you the individual and you the professional. Another response is that as a corporation, you are afforded additional tax benefits that are not available to you via Schedule “C”. Your SEP IRA contribution for one. As a physician, your options are limited to either a PC (Professional Corporation), PA (Professional Association) or PLLC (Professional Limited Liability Company). There are subtle differences in each type of entity, but there are some specifics that you will need to keep in mind. First and foremost, your state will most likely dictate what type of entity you can form, also, some states do not allow PLLC’s. Don’t just blindly form an entity without knowing the correct type of entity for you. Also, as a physician, forming a corporation will not insulate you from civil liability. For advice related to asset protection, call us. From this point forward, we will discuss the formation of a PC/PA.

The creation of your entity:

The formation process begins with a stop at the Secretary of State office, or the division of corporations. This is where you will find the forms for your specific state, along with the filing requirements and related fees. Filing requirements for professionals differ from state to state. For example, NY requires Physicians to verify their license status with the Education department before and after filing Articles of Incorporation. This is a two-step process, and involves paying two separate fees. Find out if your state has this requirement or a similar process before you file any documents. Some online Incorporation sites do not take this step. Not only will you not get your incorporation filed, you may not get your money back. Just as a precaution, before you fill out any documents, make sure there isn’t another physician in your state with your name. This can most often be avoided by using a middle initial or middle name, but you will want to be certain. Once you have confirmed this, reserve your own name. Send two copies of these documents to the state, and request a stamped copy be returned to you in a self-addressed stamped envelope.

Tax Status and Employer ID Number (EIN):

Once you have completed the Incorporation process, you will need to become legal in the eyes of the IRS. First, you will need to request a Tax ID# or Employer Identification Number. This is essentially the social security number for your business. This can be obtained online, or via fax. Simply fill out the form and submit. Now you need to address the tax status of your entity. All new corporations are seen as “C” corporations until you request to be taxed as an “S” or “Subchapter S” corporation. The difference is simple and straightforward. Do you wish to be taxed on your income twice, or only once? Most of our clients are “S” corporations. The “S” election form can be found on the IRS website, and must be filed with the IRS as soon as possible. You will receive a letter of acceptance once the IRS has approved your status. This must be completed prior to filing your first tax return. Our suggestion is to file this the same day you receive your EIN number. Send this certified mail to make sure you have proof.

Acting Like a Corporation:

Now that you are a corporation, you will have to begin acting like one. What this means is that when you do something business related, you will need to document it. First you will need to establish Bylaws. This will be the blueprint for the way you run your corporation. Sample Bylaws can usually be found on the website for the state where you incorporated. It will define what title you will have, how many times a year your board will meet, and any means to alter the nature of your entity. You will also need to have regular meetings of your Board of Directors, yes, even if you are the only one. When you hold these meetings, you will also need to keep details of what you decided to do. Whether that is opening a bank account, or entering into a contract for employment. In these minutes, you will also document how you will be compensated by your entity, and any employee benefits you will receive. You will now have to keep all of these in one place. That is why you have a Corporate Book. A corporate book can be purchased online from a variety of vendors. Within this book, you will keep the certified copy of your Articles of Incorporation, the acceptance letter of your Subchapter “S” filing, the notification letter for your EIN number, a copy of your bylaws, and each and every set of minutes from all of your Board meetings. This is the first thing that will be requested if your corporation is ever sued.

Reducing Your Taxes:

This is the primary reason you are putting yourself through this. The first reason is that as a Corporation, rather than a Sole Proprietor, you are able to make a SEP IRA contribution up to 25% of your salary versus only 20%. If you pay yourself enough to make the maximum contribution, that would be a salary of $212,000 in order to make a SEP contribution of $53,000. As a Sole Proprietor, you would only be able to contribute $42,400 at the same salary. Not contributing the additional $10,600 just cost you an additional $3,710 if you are in the 35% tax bracket. If your state has an income tax as well, you saved even more. Also, as a corporation, you can establish a Defined Benefit Plan for yourself. This can allow you to put away $100k or more annually, thus accelerating the tax savings.

Tax returns and Annual Reports:

This is where your corporation will save you money, and make all of this worth it. Your corporation will have to file a tax return each year (Form 1120S), and you will receive a form K-1, which is the shareholder profit and loss, (think of it as your 1099 as an owner of your entity.) Regardless of whether or not your state has an income tax, you will still need to file tax returns for your corporation. No taxes will be due, as those will be paid on your personal return, but pay special attention to whether or not your state levy’s a “filing fee”.

The state will also require an annual report from you, although some are every other year, but you pay twice as much. This is simply informing the state that you are still in business along with your current address.

Summary:

You can do this. Just like most things that look complicated, it is more about following the process step by step. There are no shortcuts. If you decide you need some assistance, or simply feel that you would rather work with someone who does this all the time, we would be honored to add you to our list of satisfied clients.

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 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. For more information visit our website www.myprofessionalcfo.com!

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

Did You Or Your Business Just Write A Large Check To The IRS?

2015 CAPTIVE COUNT-DOWN

There are 60 Days remaining to start the process to form a captive and pay tax-deductible premiums in 2015.

A better question might be, “Did you just weaken your business by sending a large check to the IRS?”

And, if you answered, “yes” to that question, would you instead like to strengthen your business by sending far smaller checks to the IRS?

If you can affirmatively say, “yes” to the following statement, “I want to make my business stronger and more survivable by sending smaller checks to the IRS,” then this article is for you.

At the outset I want to be very clear that I am not advocating tax evasion. CLICK HERE to read Tax Avoidance Is Perfectly Legal, But Tax Evasion Is Against The Law.

I am advocating one of the most responsible strategies that small and mid-sized business owners can implement to ensure the long-term survival of their enterprise. This strategy has legitimate business purpose, provides significant tax savings, and is encouraged by Congress. CLICK HERE to read Congress Wants You To Own A Captive Insurance Company.

What is this responsible strategy that is also a financial game-changer? Well, I partially tipped my hand in the link provided above. This wealth-preserving, business survival strategy is Enterprise Risk Management Utilizing A Small Captive Insurance Company.

BACKGROUND: Congress And Small Captive Insurance Companies

Over time, taxes can take a heavy toll on a business and its owners. Year after year, profits are stripped away to pay taxes often resulting in a business that is less prepared for the challenges and risks it may face in the future. Congress doesn’t want small and mid-size businesses and business owners to be hollowed out by excessive taxation either.

In the mid-1980s, Congress passed legislation creating the 831 (b) “small” insurance company tax election. A small insurance company is defined as an insurance company that collects $1.2 million or less in premiums. In most captive insurance company arrangements, premiums are paid by the parent company to the captive insurance company. In return, the captive provides insurance policies to the parent company. The 831(b) tax election allows small insurance companies to be taxed at a zero percent (0%) tax rate on underwriting profit. Underwriting profit is simply defined as premiums collected less claims paid. Hence, a small business could pay up to $1.2 million in premiums to its captive insurance company and the captive would pay no taxes. The captive can be owned by the business, the business owner, business owners, heirs or other related parties. Depending on claims, a captive can save up to $600,000 per year in taxes.

It’s worth noting that “small” captive insurance company legislation was a bi-partisan effort passed by a Democratic controlled Congress and signed into law by Republican President, Ronald Reagan. This issue united both sides of the political aisle in America because small captive insurance companies are good for small businesses, good for long term business sustainability and good for America.

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How Is Enterprise Risk Management With A Captive Insurance Company A Game Changer?

The illustration below shows why captive ownership is so often good for businesses and good for business owners. A captive can serve as the backbone or chassis of an Enterprise Risk Management (ERM) approach. ERM addresses risk holistically, expands insurance coverage to the business, takes a long-term approach to risk management, and simultaneously puts more wealth at the disposal of the business owner.

The illustration below compares the status quo on the left with ERM implementation and captive ownership on the right. This illustration covers a 10 year period and assumes a 4% rate of investment return for both scenarios. Both businesses have third party insurance coverage in place to insure core risks. The business on the right which implemented ERM with a captive insurance company has more insurance coverage and more money. In fact, over a ten year period, the business on the right has almost 80% more wealth than the business on the left.

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Clearly, the business that implemented ERM with a Captive Insurance Company is better prepared for the future. Remember, small insurance company legislation united both sides of the political aisle in America because small captive insurance companies are good for small businesses, good for long term business sustainability, good for employment, and good for America. Don’t just pay more taxes if your business would benefit from owning its own insurance company!

What Is Enterprise Risk Management (ERM)

ERM is the discipline by which an organization in any industry assesses, controls, exploits, finances and monitors risks from all sources for the purpose of increasing the organization’s short and long-term value to its stakeholders. Beginning in the mid-80s, many businesses continued down an entrepreneurial path and shifted their mindset from risk management simply as a form of cost containment to risk management as a profit center. Indeed, a more mature approach to risk management can be quite creative and entrepreneurial. Making a paradigm shift from viewing risk management purely as a cost center to viewing risk management as a profit center and strategic pillar of the business can be very rewarding from a financial standpoint.

ERM is the paradigm shift that transforms risk management from a cost center to a profit center. Large corporations have employed ERM for some time, and this mature approach to risk management can also be adopted by small and mid-size companies. The chassis of an ERM approach is a captive insurance company (or companies). Captive insurance companies give business owners or CFOs the ability to take an active versus a passive approach to risk management. ERM increases depth of coverage and is a forward-looking approach to risk management. Furthermore, as a company’s ERM strategy matures, risk management can transition from being a cost center to serving as an entrepreneurial profit center.

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Ownership of one or more captive insurance companies makes ERM possible, because a business is able to both:

– Increase depth of insurance coverage
– Increase the time horizon of its risk management approach

Increase Depth Of Insurance Coverage

When employing a mature ERM model, business owners can categorize risk as core risk, operational risk and strategic risk. Most businesses and individuals simply insure core risk and usually do so via third party commercial coverage. Utilizing an ERM approach, a captive insurance company, in its formative years, gives businesses depth of cover by addressing the second and third layers of risk management (operational risk and strategic risk). As the captive matures and amasses reserves, it can also play a role in addressing core risk. It’s worth noting that many non-core risks evolve into core risks. Examples include: cyber, supply-chain risk, extended warranties, administrative action, terrorism, receivables, key contracts, key employees and employment risk. Operational and strategic risks and the existential threat that can pose to small and mid-size business owners are outlined in detail at FEMA’s Ready.Gov web site (CLICK HERE to read more).

Increase The Time Horizon Of Risk Management

Another characteristic of a mature risk management approach is taking a forward looking stance. A short term approach to risk management typically buys insurance from year-to-year with the goal of keeping costs as low as possible. Each year, all premiums paid for third party commercial coverage are a “sunk cost.” At the end of the year, if there are no claims, the money is gone. Because a captive insurance company is owned by the business owner(s) or the parent company, premiums paid to the captive insurance company are retained after claims are paid. Wealth accumulates in the captive as insurance reserves and provides flexibility to the business in its risk management in future years. A captive facilitates an ERM strategy because it enables a multi-year approach to risk management.

Summary: Financial Impact Of ERM With A CIC

Adopting an ERM approach with a captive insurance company as the chassis can be a financial game changer for business owners. Because the business owner and/or company can reap additional profits from its captive insurance company, the organization will inevitably make risk management and risk mitigation a higher priority. Furthermore, as the CIC grows its reserves, it is in a position to help reduce total reliance on third party commercial cover for core risks. This can often be achieved by reinsuring deductibles and insuring additional potential losses not covered by commercial insurance (including losses above third party insurance policy limits). Finally, CIC ownership enables the business owner or owners to capitalize on the favorable tax treatment that insurance companies receive on their reserves set aside for future claims. As noted already, a well-structured ERM strategy with a CIC can save a business owner up to $600,000 per year in taxes.

Because a captive insurance company is owned by the business owner(s) or the parent company, premiums paid to the captive insurance company are retained after claims are paid. Wealth accumulates in the captive as insurance reserves and provides flexibility to the business in its risk management in future years. A captive facilitates an ERM strategy because it enables a multi-year approach to risk management.

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ERM with a captive insurance company is particularly powerful, because this approach enables a business or business owner to capitalize on insurance law. Fortune 500 companies and other large company CFOs have been capitalizing on insurance law and tax treatment since the 1950s. The exact same strategies are available to small and mid-size companies. As part of its ERM, a business can purchase insurance from its captive insurance company (ies). Premiums paid to the captive are a tax deductible expense to the parent company. The captive insurance company receives the premiums in a tax-favored manner as a large portion are set aside as reserves for future claims.

Reserves are not taxed, hence the insurance company is able to invest and grow a large pool of money. Insurance companies amass wealth by investing large amounts of pre-tax reserves. As already covered, if the insurance company qualifies as a “small” insurance company (defined as receiving annual premiums of $1.2 million or less), it can make an 831 (b) tax election and be taxed at a 0% (zero percent) rate on its underwriting profits. Hence, a well-structured ERM strategy with a CIC can save a business owner up to $600,000 per year in taxes. Most importantly, rather than being weakened by taxation, the business is strengthened and better prepared for long term survival.


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, Attorneys and Information Technology Professionals. We specialize in Corporation and LLC 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. For more information visit our website www.myprofessionalcfo.com 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. Call us at: 1 (800) 517-0CFO 1 (800) 517-0236 Captive services powered by: image

What type of Businesses Benefit from a Captive Insurance Company (“CIC”)?

What type of businesses could benefit from a captive insurance company (“CIC”)?

  • Businesses that are overpaying for third party insurance or with significant uninsured or underinsured risks

ExamplesContractors, developers, medical groups, family owned businesses, physicians, entertainers, professional athletes, high tech firms, professional service firms, real estate management companies, etc.  Upon reflection, almost every business has significant uninsured or underinsured risks.

  • Businesses with sufficient revenue and profits to afford the premium
    • – Over $1,000,000 in gross revenue.
    • – Over $200,000 in “excess” after-tax profits (i.e., money that doesn’t need to be directly reinvested into the business or paid out as compensation).

Tax savings versus informal self-insurance arrangements

Assuming that your captive insurance company (“CIC”) is a proper, licensed insurance company that writes appropriate, relevant insurance policies in exchange for independently-priced or market comparable premiums, then premiums paid to your CIC should be deductible to your business just as if they were paid to a third party insurer.   For instance, if you paid $1 million in premiums to your CIC this year for valid insurance, the resulting deduction would save you or your business $400,000 in taxes if you’re in a forty percent combined federal and state tax bracket.

In addition captive insurance companies receiving less than $1.2 million per year in premium income, can elect to have their underwriting profits taxed in a zero percent bracket under Code Section 831(b). For example a CIC which takes in premiums of less than $1.2 million per year with its premium income exceeding claims paid, may have those profits taxed in a zero percent bracket.  Assuming $1 million of CIC premiums and a forty percent tax bracket that represents $400,000/year of potential tax savings by formally self-insuring risks through a captive versus not insuring these risks at all as most businesses do.

Why do captives enjoy such a low tax bracket on underwriting profits?  Some hypothesize that Congress may have decided that third-party insurance arrangements should not be favored by the tax code over formal self-insurance arrangement like CICs.  Also, it seems that Congress may have intended to incentivize small businesses to begin setting aside reserves to insure risks they have failed to cover via third parties due to cost, lack of available coverages for certain risks, or other considerations.  Section 831(b) incentivizes small businesses to responsibly reserve for these risks through captive insurance arrangements.

Despite the obvious and frequently-noted tax advantages of a CIC, no business transaction should ever be completed simply or even primarily to achieve tax savings.  In some cases the IRS has authority to deny deductions that result from primarily tax-motivated transactions.   Thus, the decision to implement a CIC should be based upon the business owner’s careful considerations of the risks facing his/her business and the various means of mitigating them, and his/her decision-making process should be documented.  Unfortunately, it’s the rare business indeed that doesn’t have considerable exposure to innumerable uninsured risks, potentially bankrupting the business if left unaddressed, and which self-insuring via a captive can mitigate.  Your captive attorney and his or her insurance manager can assist you in recognizing and developing a plan to protect against such risks.

Why form a Captive Insurance Company (CIC)?

  • Reduce Insurance Costs: Conventional third party insurance policies insure a bundle of risks that may not be particularly relevant to you.  A standard package may include both relevant and comparatively irrelevant risks, and yet you pay for both.  In other words, you may be paying for coverage that you don’t need while “going naked” on coverage that you do.  Third party insurance premiums also include markups for things like marketing expenses and large underwriting departments, which may not benefit you at all.  These additional costs are reduced or eliminated with captive insurance.
  • Protect Your Business From Risk: The attorneys and insurance managers who assist you in forming your CIC are experts at identifying relevant but often over-looked risks.  Because CICs offer the ability to obtain tailor made insurance, your business should be better prepared to survive the unexpected
  • Improve Cash Flow: The potential savings realized by obtaining cheaper and more relevant types of insurance, combined with the tax savings that CIC’s provide, may result in significant improvements in your business’s after-tax cash flow.  There is also a decided advantage in being able to time the premium payments to the company’s natural cycle of cash flow.
  • Create Profit Center: Studies show that businesses which own a captive better manage their risk than 3rd party insurance companies, allowing CIC’s to have a much lower loss ratio. Captives are often therefore highly profitable. These profits can be invested in ways that which generate valuable investment income.  The result is often a new profit center for your business enterprises.
  • Increase Asset Protection: Properly formed and maintained, the profits of a captive are very well insulated from the creditors of both the business and the business owners.
  • Estate Planning: If your captive is owned by your children or a trust for the benefit of your children, then premiums paid to the captive each year are effectively removed from your taxable estate without gift taxes.

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, Attorneys and Information Technology Professionals. We specialize in Corporation and LLC 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. For more information visit our website www.myprofessionalcfo.com 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. Call us at: 1 (800) 517-0CFO 1 (800) 517-0236 Captive services powered by: image

Independent Contractor Physicians: 5 Taxes You Can Stop Paying Today!

A recurring theme when speaking with new Independent Contractor Physicians is Taxes, and how to pay less of them.  More often than not, the first thing they all do is to calculate how much they think they will make the first year, typically around $300,000, and then they do the math and figure that in the 35% tax bracket, they will pay $105,000 for income taxes, which unto itself is a large number.  What they often forget is that they must also pay taxes on self-employed income, also known as FICA/Medicare.  If you live in a state with an income tax, this amount gets even higher. There are ways to reduce this number, legally. Keep reading to see how.