Tax Planning

As the end of 2024 approaches, now is the time for individuals to fine-tune their financial strategies and explore opportunities for tax efficiency. From maximizing retirement contributions to tax loss harvesting and AMT considerations, understanding these strategies can help reduce tax liabilities and establish a foundation for future financial health.

For many physicians, making it to the end of 2020 successfully is an achievement of perseverance, planning, pivots, and good business sense. An industry not traditionally associated with financial challenges was tested thanks to COVID-19 when in-office patient contact was restricted, elective procedures were all but halted, and ongoing medical care shifted to virtual. Many offices were forced to shut their doors or furlough staff, and the added cost of PPE and technology upgrades strained already-tight budgets.

As reported cases of COVID-19 continue to reach new highs in Georgia, with an average of 3,394 per day, there is an increasing concern in the business community that restrictions and forced closures will again be implemented.

Are tax-free reorganizations possible? Absolutely. Internal Revenue Code Section 368(a)(1) allows for tax-free (or tax-deferred) reorganizations for certain acquisitions, divestitures, bankruptcies, and corporate restructurings. F-type reorganizations, which are a type of corporate restructuring permitted under subparagraph F, allow a single corporation to change their “identity, form, or place of organization” without incurring a tax bill. But F-type reorganizations can do so much more than that.

Taxpayers first had the opportunity to use the 20% qualified business income deduction this past April 15th, and their tax returns fared a bit better because of it. This unique deduction was created at the end of 2017 as part of the Republican tax overhaul called the Tax Cuts and Jobs Act, and it gave taxpayers the unprecedented opportunity to reduce their taxable income by up to 20%. The 2019 tax season (when we filed 2018’s tax returns) was the first season taxpayers were eligible to take the deduction. Now that we have one year of experience with the deduction under our belts, what did we learn?