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How Physicians Can Negotiate Taxes

How will physicians whose are not delivering “elective medical care” meet their ongoing expenses?

In addition to loans and advance payments through the SBA and CMS, there may be flexibility available through the Internal Revenue Service that could temporarily free operating capital or even offset prior years’ profits with losses caused by COVID-19.

Here are some questions you and your doctor clients can explore ( from the American College of Surgeons):

  • Is my practice eligible for the employee retention tax credit? This is a refundable Social Security tax credit equal to 50 percent of qualified employee wages (up to $10,000 of wages for each employee); however, small businesses that take SBA loans like those made available by the PPP are not eligible
  • Does it make sense for me to defer the Social Security portion of employer payroll taxes owed for the period between March 27, 2020 and December 31, 2020? (Note that the deferred amount must be repaid, with 50 percent of the deferred amount due by December 31, 2021, and the remainder to be paid by December 31, 2022.)
  • Do any of the modifications of Net Operating Loss rules (such as allowing them to offset 100 percent of taxable income or to be carried back for five years) apply to my practice?
  • Can I benefit from the temporary increase of the business interest expense limitation to 50 percent of adjustable taxable income for tax years 2019 and 2020?
  • Does my practice have excess business losses for tax years 2018, 2019, and 2020 that can be used due to the suspension of limitations for pass-through entities and sole proprietorships?
  • Can I claim 100 percent bonus depreciation for real estate and leasehold improvements placed in service after 2017?
  • Are there other less common flexibilities such as greater limits on charitable deductions, alternative minimum tax credit refunds, or funding of defined benefit pensions that might apply to my situation?