2 Things Any Physician Can Do Right Now To Lower The Amount of Tax They Pay, While Protecting (and even growing) Their Assets!
As one of the country’s most popular relocation service-company for physicians, it’s safe to say we know a thing or two about physicians and their finances…
And two topics continue to appear, both intertwined; lowering taxes, and protecting assets.
Of course, we all want to lower the amount of tax we pay, and as a physician, you work extremely hard – so it’s only natural you want to pay less while protecting your assets.
Below, we look at three methods you can use right away, to begin lowering your tax-rate and protect your assets.
#1: Form a Physician Corporation
One of the most effective ways at lowering taxes, forming a physician corporation will allow you to use the corporation to pay for various expenses, rather than your normal expenses coming from your salary or own pocket.
Best of all, since these types of expenses are paid before you draw your salary, they’re also deductible from your overall income, meaning they’re not taxed at all.
What’s more, a physician corporation presents even more benefits (with the ability to pay yourself a salary yet another benefit), and while – of course – the amount of money you take from the corporation is up to you, a corporation helps you to draw it at a sensible rate… one that cuts tax costs.
(The reason for the lower taxes is because you are not required to pay FICA taxes on the dividends you draw from the Physician Corporation, unlike your regular, current salary.)
#2: Contribute Towards Retirement Accounts
Contributing regularly towards a retirement account helps both lower taxes and secure your assets, and we’ll look at why, below.
First, in regards to tax… retirement plan contributions are not subject to income or FICA taxes, so even if you decide not to form a Physician Corporation as we discussed above, it can help to lower your tax bill.
In regards to protecting your assets, retirement accounts aren’t subject to levies in the result of a civil judgment, so in simple terms, the more you contribute to these retirement plans, the more your assets are protected.
If you’re not yet contributing to a retirement plan it’s a good idea to start soon, as, aside from the tax and asset-protection benefits we’ve looked at above, it also helps you to plan for your future, allowing you to retire earlier, and work less!
Of course, you should always consult with a trained tax expert in your local area, but following the tips above, you can drastically cut down on the amount of tax you pay each month, while also helping protect your assets.
Who Is Physician Banks?
We’re one of America’s largest and most reputable physician loan and relocation experts, and we help physicians with every step of their move, from helping them find suitable properties and homes to connect with the best realtors around, and securing mortgage loans.
We have realtors in all areas of the country and will work with you to find the best possible home for you and your family.
Best of all, we recover our costs from the realtors themselves, so there’ no charge to you whatsoever.