Maximize Tax Savings For 2014 Business Car Purchases

Doctors and Business Owners who purchased a business car in 2014 will be able to boost their tax savings using the $8,000 increase in first-year depreciation, thanks to the recent extension of bonus depreciation. Doctors who purchased a heavy SUV or pickup (Gross Vehicular Weight Rating over 6,000 pounds) by December 31, 2014 are eligible for even greater tax breaks.

Assume a doctor or Business Owner purchased a new SUV for $60,000 in 2014. First, the doctor or business owner can expense $25,000, the cap for SUVs. One-half of the remaining $35,000 cost, or $17,500, can be deducted using bonus depreciation. Another 20% of the $17,500 remaining balance, or $3,500, can be claimed as normal depreciation. Accordingly, with 100% business use, the total 2014 write-off for a $60,000 SUV purchase is $46,000. If the doctor or business owner purchased a used, rather than new SUV, bonus depreciation cannot be claimed, although the other tax breaks remain available.

Information only, please run this by your Professional Tax Advisor to implement.

Contact Connie Dello Buono 408-854-1883 motherhealth@gmail.com or conniedbuono@gmail.com to have a phone chat with a Sr Investment Advisor on ways to reduce income taxes for doctors and business owners via a business structure and financial strategy.

W2 and 1099 income for Stanford and Kaiser doctors to save more and min taxes

Ask your payroll if you can split your income to W2 (base) and 1099 (extra) to allow your 1099 income into a C corp for max savings and min income taxes.

Working for a hospital allowing you to do a 1099 can save you more in income taxes and increase your savings.

With VA doctors, payroll will not let you split your income but do ask them anyway.

Combination of W2 and 1099, allows you to have more healthcare deductible benefits.

Use your corporation to write off more of your expenses.

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We can work with your payroll dept and CPA to allow you to save more and min income taxes. Contact Connie Dello Buono, financial planner for doctors , 408-854-1883 motherhealth@gmail.com

Medical doctors: 2014 tax law changes , impact and financial strategies

tax brackets

How will 2014 tax law changes impact your finances this year and beyond?

Although the top marginal tax bracket was increased to 39.6%, most physicians will have their marginal rate (their last dollar of income) taxed at 28% or 33%, depending on your taxable income.

Understanding tax brackets

Contrary to popular belief, when you earn an additional dollar and cross into the next tax bracket, only that dollar and any additional dollars are taxed in the higher bracket, not income below the threshold. Some people reduce their income for fear of moving into a higher bracket, but only additional dollars are taxed at the higher rate.

Taxes are calculated in two ways, the traditional way and what’s known as the “alternative minimum tax” (AMT). The AMT was established for taxpayers who itemize their deductions and take significant write-offs. It can add as much as $5,000 to $10,000 per year to a tax bill. All taxpayers are obligated to calculate their taxes using both methods and to pay the higher amount.

For taxpayers in higher brackets, most long-term capital gains (a category that includes most assets held for more than one year) and qualified dividends are taxed at either 15% or 20% for federal purposes, plus any state or local tax. The tax rate you pay depends on your level of taxable income. The highest tax rate on long-term capital gains and qualified dividends is 20%.

The Affordable Care Act, however, added a 3.8% Medicare tax for taxpayers with adjusted gross incomes over $250,000 if married or $200,000 if single, in addition to the 20% rate mentioned previously. The tax also applies to rental income and other forms of unearned and passive income. Therefore, your capital gains and qualified dividend tax bracket could be as high as 23.8%.

Itemized deduction phase out

The government also reinstituted the phase out of itemized deductions and personal exemptions if you are married and your adjusted gross income exceeds $300,000 or if you are unmarried and your adjusted gross income exceeds $250,000.

Essentially, this means that you lose some deductions, such as mortgage interest and charitable donations, and exemptions if your income is higher, effectively raising your taxes further. You lose 3% of the amount by which your adjusted gross income exceeds the stated thresholds. Although this provision had been in effect previously, it had not applied since 2009 and has now been implemented again.

Estate and gift taxes

Any person can gift up to $14,000 per calendar year to any other person without paying gift taxes and without reporting the transaction on a gift tax return.

For example, a married couple can each give $14,000 to each child and grandchild. Larger gifts can also be given by filing a Federal Gift Tax Return. Such gifts would offset one’s lifetime exemption, and usually not result in taxes.

The exemption during an individual’s lifetime or upon the person’s demise is currently $5.34 million per donor. To the extent that a taxable estate at death exceeds this threshold, there is a federal 40% tax on the excess.

Subject to certain exemptions, there is also a generation-skipping tax that often applies when passing assets to grandchildren, a technique often used to keep them out of the estates of children, where they would be taxed at a higher rate. This should be considered when doing estate planning.

Even if you do not exceed the new high estate tax thresholds, it is important to update your wills and trusts to ensure that your assets are passing to the intended parties whether they be your children, grandchildren, charities or others.

Payroll taxes have also increased, because the Social Security wage base increased to $117,000 this year. Taxes paid on this level of income fund Social Security and Medicare. Although the employer and employee pay both Medicare and Social Security up to the aforementioned wage base, Medicare taxes apply even to wages, exceeding the wage base, and are in addition to the 0.9% surtax that became law as part of the ACA.

Save about $70k in income taxes through a business structure, contact Connie Dello Buono 408-854-1883 motherhealth@gmail.com who teamed up with financial advisors for financial strategies.

For doctors who do not own their medical practice (in C corp plus another entity) but works with an institution, what type of income do you receive?  W2 or 1099?

a.       If W2, can you have your payroll dept switch a portion of your income to 1099?  For instance, take the base salary as W2, then any overtime or bonuses to 1099?

b.      Do you have a corporation set up?  If so, what is the structure (LLC, S Corp or C Corp?)

c.       If you are stuck with W2 income from the hospital, not much we can do with taxes
on the front end, but we can definitely do financial planning to avoid taxes on the back end.
Note that 401k savings and other investments are taxed later on
(around 40-50% including penalties)

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Free 30min phone chat with a sr financial advisor at Harding Financial to help you reduce income taxes using a business structure and financial strategies, connie.dellobuono@hardingfinancial.com or conniedbuono@gmail.com 408-854-1883

Make 2014 and 2015 be the year to protect your wealth and secure your retirement.

 Connie Dello Buono
Jr Financial Advisor
hardingfinancial.com

It is not too late to save for when you live too long

http://www.msn.com/en-us/money/tools/retirementplanner

retirement planner

Contact Connie Dello Buono , retirement planner, 408-854-1883 motherhealth@gmail.com to save before the year ends. CA Life Lic 0G60621

Protecting your cash flow

Avoid financial  disasters, health threats, retirement threats and taxes at all costs. Accept change to protect your cash flow. This is the mindset of the early innovators and early adaptors. Whatever their age bracket be, they are high income earners and risk takers.

How do we attract adopters and retain believers?  Surround yourself with people who believe in what you do.  I am looking for those who believe in saving and in protecting their cash flow.

I help clients avoid financial disasters by protecting their cash flow.
Connie Dello Buono 408-854-1883 motherhealth@gmail.com CA Life Lic 0G60621

Call if you do not like taxes and wanted to protect your life savings. People come to me to make sure that they and their advisors have not overlooked any of the threats to their cash flow.

Free custom financial strategy from financial advisor

A tax efficient financial plan will keep more of your money to last forever based on retirement and health threats. Email Connie Dello Buono , motherhealth@gmail.com , to have a free 30min chat with a financial advisor and receive a free custom financial strategy. Call 408-854-1883 to be scheduled this October before the end of 2014 to have a financial plan that is custom made to save your current savings and investments to protect the future.

I work with financial advisors, investment specialist, estate planners, CPA, insurance agents and other experts for a strategic financial plan and  tools that will help you mitigate risks.

Do not use your house as your retirement plan. We helped doctors and health care providers save on taxes, business owners reduce expenses and engineers/professionals retire comfortably.

Free 30-min chat with a financial advisor 408-854-1883

Call Connie Dello Buono to schedule you to one of the many financial advisors who can listen to your financial goals for 30-min at 408-854-1883 and email motherhealth@gmail.com. And then when you know that you need a financial strategy, another 40min free introduction to the financial strategy will be scheduled.

There is the listening to your emotions as you decide and plan for your finances in the future. Do talk to a financial advisor before you decide on a big move or big purchase since your income that should last forever will be affected by it.

Do not use your home as your only retirement plan. Have diversification.

Save and invest like a woman. But do not spend like her.

Live life with protection for the future so that your lifestyle will last as long as you live.

Do downsize if you can, keep up new skills, open an online business for less, leverage your time and money. Money helps create happy memories. Spend wisely.