PHYSICIANS office RESOURCE 2018 - Issue 1
Calculating The New Tax Plan Results
By Dr . Cory Fawcett , Award-winning author of THE DOCTORS GUIDE TO series .
As the year comes to an end , congress has passed the new tax bill . This was certainly not tax reform as has been discussed , but simply a rearrangement of how they calculate our taxes . This new plan lowers tax rates but eliminates many of the items that were previously deductible . Sort of like rearranging the deck chairs of the titanic as it slowly sinks . Real tax reform might have made things so much simpler that the IRS would be able to lay off 75 % of their staff , or the number of tax forms used for my personal taxes would go down to a half dozen instead of 50 .
Cutting through all the baloney we see on TV and the internet , what is the real effect of this new tax plan ? What are the changes that will affect us ? For the majority of physicians , I suspect there will be little change .
So what is new that is important to an average practicing physician : 1 : All the tax brackets are now paying a lower percentage of their income to taxes . This is good , but this will be offset by some deductions you will likely lose . So don ’ t spend the money yet .
2 : The deductions for yourself and your dependents will be lost ( personal exemptions ). This is $ 4,150 in 2017 for each dependent , so larger families will feel this loss the most . This will increase your taxable income .
3 : To make up for # 2 , a child tax credit will be increased to $ 2,000 . This will be good for big families and this directly decreases the tax bill dollar for dollar , if your dependents are under age 17 and you earn under $ 400,000 if married ,
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