Good resources for learning about tax code small business deductions

[saildawg]

I was wondering if there were any good resources/books/links etc on basics of tax code.  My wife and I are both w2 physicians currently, but next year she will be making partner in her anesthesia practice.  Apparently the group (about 12 MDs) all set up individual S corporations.  I am going to meet with their groups CPA in the future and would like to be well educated going into this discussion.  I am interested in learning how we can minimize our tax burden and live life more advantageosuly to tax code when she becomes "a business owner".  I am slightly familiar with setting up home office, tracking miles, but want to learn more.

As W2 employees, we basically only can fund 401k, HSA, fund 529 to state max to save on taxes now, I assume we will have more opportunity with solo 401k/profit sharing plan in the future.  Thanks

[PhysicianOnFIRE]

Check out Fairmark.

If you have specific questions, you can ask them here -- there are numerous tax savvy participants, including CPAs.

[jfoxcpacfp]

saildawg wrote:

I was wondering if there were any good resources/books/links etc on basics of tax code.  My wife and I are both w2 physicians currently, but next year she will be making partner in her anesthesia practice.  Apparently the group (about 12 MDs) all set up individual S corporations.  I am going to meet with their groups CPA in the future and would like to be well educated going into this discussion.  I am interested in learning how we can minimize our tax burden and live life more advantageosuly to tax code when she becomes “a business owner”.  I am slightly familiar with setting up home office, tracking miles, but want to learn more.

As W2 employees, we basically only can fund 401k, HSA, fund 529 to state max to save on taxes now, I assume we will have more opportunity with solo 401k/profit sharing plan in the future.  Thanks

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If you are in CA, you have to be either an S-corp or a sole proprietor. As long as you have adequate malpractice and umbrella insurance and no employees who could cause you to be held liable, a SP should be just fine. However, some groups require their partners to form S-corporations (or SMPLLCs if not in CA), so she may have no choice. I just posted an article on the differences among the entities with 2 more to come in the next couple of weeks.

Probably the most time-efficient way to educate yourself would be to have discussions with your personal CPA to talk about pertinent factors and decisions you'll need to make rather than piecemeal information. Mike Piper has a series of books on taxes that, I understand, are excellent, too.

[Craigy]

https://www.amazon.com/Selected-Federal-Taxation-Statutes-Regulations/dp/1634604342/

[Hatton]

Mike Piper's book is an easy read.  Maybe 100 pages.

[DMFA]

I honestly found the IRS's own publications to be of benefit. They do leave some ambiguities, but it's not too difficult to fill in the blanks.

[saildawg]

jfoxcpacfp wrote:

saildawg wrote:

I was wondering if there were any good resources/books/links etc on basics of tax code.  My wife and I are both w2 physicians currently, but next year she will be making partner in her anesthesia practice.  Apparently the group (about 12 MDs) all set up individual S corporations.  I am going to meet with their groups CPA in the future and would like to be well educated going into this discussion.  I am interested in learning how we can minimize our tax burden and live life more advantageosuly to tax code when she becomes “a business owner”.  I am slightly familiar with setting up home office, tracking miles, but want to learn more.

As W2 employees, we basically only can fund 401k, HSA, fund 529 to state max to save on taxes now, I assume we will have more opportunity with solo 401k/profit sharing plan in the future.  Thanks

Click to expand…

If you are in CA, you have to be either an S-corp or a sole proprietor. As long as you have adequate malpractice and umbrella insurance and no employees who could cause you to be held liable, a SP should be just fine. However, some groups require their partners to form S-corporations (or SMPLLCs if not in CA), so she may have no choice. I just posted an article on the differences among the entities with 2 more to come in the next couple of weeks.

Probably the most time-efficient way to educate yourself would be to have discussions with your personal CPA to talk about pertinent factors and decisions you’ll need to make rather than piecemeal information. Mike Piper has a series of books on taxes that, I understand, are excellent, too.

Click to expand...

We are not in California, it is my understanding that every partner must set up an S corp.  I will know more in the future, I also would want to know if an LLC filing as an S corp would be an option.  Thank you for the suggestions

[saildawg]

Craigy wrote:

https://www.amazon.com/Selected-Federal-Taxation-Statutes-Regulations/dp/1634604342/

Click to expand...

Thanks this looks like a good starting point!

[jfoxcpacfp]

saildawg wrote:

We are not in California, it is my understanding that every partner must set up an S corp.  I will know more in the future, I also would want to know if an LLC filing as an S corp would be an option.  Thank you for the suggestions

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It is the same result whether you set up an LLC and elect S-corp status or set up a traditional corporation and elect S-corp status. If your wife will have gross receipts of $350k+, you should be able to save $$ by being an S-corp. You'll definitely save taxes, but you've got to deduct the additional administrative costs of filing a separate corporate tax return and the cost of payroll preparation and administration.

[saildawg]

jfoxcpacfp wrote:

saildawg wrote:

We are not in California, it is my understanding that every partner must set up an S corp.  I will know more in the future, I also would want to know if an LLC filing as an S corp would be an option.  Thank you for the suggestions 

Click to expand…

It is the same result whether you set up an LLC and elect S-corp status or set up a traditional corporation and elect S-corp status. If your wife will have gross receipts of $350k+, you should be able to save $$ by being an S-corp. You’ll definitely save taxes, but you’ve got to deduct the additional administrative costs of filing a separate corporate tax return and the cost of payroll preparation and administration.

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Thanks good things to consider.  Income is expected to be > 350K.  Ill have to get an idea of cost of administative prep

[Craigy]

saildawg wrote:

Craigy wrote:

https://www.amazon.com/Selected-Federal-Taxation-Statutes-Regulations/dp/1634604342/

Click to expand…

Thanks this looks like a good starting point!

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If you take a tax law class this is standard issue.