How Will the New Tax Law Affect Your Practice?

In December, Congress passed and President Trump signed into law the Tax Cuts and Jobs Act of 2017. Here are a few ways it may affect medical practices and medical students.

  • Professional-services pass-through business owners — such as physicians with a sole proprietorship, S corporation, partnership or limited liability corporation who earn more than $157,500 singly or $315,000 jointly — face a phase-out and cap of the 20-percent business income deduction. Independent contractors will benefit from the pass-through deduction but are responsible for the employer’s share of Medicare and Social Security taxes.
  • The cost of capital expenses can be written off 100 percent in five years starting in 2018.
  • The new corporate tax rate is a flat 21 percent, an improvement for all corporations earning more than $50,000 per year.
  • Graduate students will keep tuition waivers, and student loan debt interest will remain deductible regardless of whether a taxpayer itemizes deductions.
  • Federal and private student loan debt discharged due to death or disability will not be taxed from 2018 through 2025.

For specific guidance about your practice or personal finances, we always recommend you contact your attorney, accountant, or financial planner. Check out the NCMS Marketplace for our preferred vendors who offer such services.

 
 

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