These items can add up, and it’s not uncommon to deduct $15,000 per year. Business ExpensesĪs an independent contractor physician, tax deductions begin with your business expenses. For specific QBI qualification guidelines, review details here or contact a FDI representative. Qualified Business DeductionĪs of 2018, 1099 physicians can qualify for a 20% pass-through deduction which can save you upwards of $15,000 in taxes in a year. By using these strategies, you can save over $100,000 in a tax-deductible capacity. If you want to further accelerate your retirement savings AND further shrink your tax bill, you can deploy strategies like hiring a spouse or using a Defined Benefit Plan. If you live in a state that requires you to pay state income tax, there would also be additional savings.Īnd the good news – you don’t have to stop there. This means if you are in the 24% tax bracket, you could save over $13,920 in federal taxes alone (if you max-out your retirement contribution). Retirement SavingsĬontributions of up to $58,000* per year to a tax-deductible retirement account like a SEP IRA or Individual 401(k) are permitted for independent contractor physicians. Start with these categories, following specialized advice from the professionals at Financial Designs, Inc. However, careful considerations can lead to dramatic savings once you break it all down into manageable steps. There can be several moving parts to building a tax plan as an independent contractor physician. 5 Ways Independent Contractors Can Shrink Their Tax Bill In Partnership with Financial Designs, Inc.
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