ABSTRACT
Introduction .................................................................................................................................... 231 Adjusted Gross Income .................................................................................................................. 232 Filing Status and Tax Rate Brackets .............................................................................................. 233
Tax Brackets ..............................................................................................................................234 Marginal Tax Rates ........................................................................................................................ 235 Personal and Dependency Exemptions .......................................................................................... 235 Standard Deduction ........................................................................................................................ 235 Who Has to File ............................................................................................................................. 236 Taxpayer Relief Act of 1997 .......................................................................................................... 236
Capital Gains and Losses .......................................................................................................... 236 Sale of a Personal Residence..................................................................................................... 237 Small Business Stock ................................................................................................................ 237 Estimated Tax Rules .................................................................................................................. 237 Penalties .................................................................................................................................... 238 Deductions................................................................................................................................. 238 Home Equity Loans................................................................................................................... 238 Business Automobiles ............................................................................................................... 238 Meals and Entertainment........................................................................................................... 239 Simple Charitable Giving ..........................................................................................................240 Complex Charitable Giving ......................................................................................................240 Education Student Loan Interest ...............................................................................................240 Employer-Paid Educational Assistance .....................................................................................240 State and Local Taxes ................................................................................................................ 241 Fringe Benefits ..........................................................................................................................242 Home Office .............................................................................................................................. 243
Safe Harbor........................................................................................................................... 243 Computers .................................................................................................................................244 Hobby Deductions .....................................................................................................................244
Investment Taxation .......................................................................................................................244 Capital Losses ...........................................................................................................................244 Zero Coupon Bonds ..................................................................................................................245 Tax-Exempt Bonds ....................................................................................................................245
The objective of tax planning is to arrive at the lowest overall tax cost on the activities performed. Inasmuch as physicians constitute 14% of the so-called and often maligned “one-percenters” ($388,905 earned, not passive income/per year), this chapter will address some methods and strategies to reduce federal and state income taxes. It is applicable to all physicians and medical professionals, as independent practitioners or employees.
