$200,000 if single. The tax credit will
only counteract the loss of the
personal exemption of your children,
not of you and your spouse. Big
families will benefit, small ones will
not.
4: The standard deduction will increase
to $24,000 for a married couple,
$12,000 if you are single. This will
create a situation where an estimated
94% of taxpayers will no longer
benefit from itemizing their
deductions. That means, for most of
America, your mortgage interest and
charitable giving will not be
deductible at all. A physician with a
combination of substantial gifts to
charity, paying high state taxes and
maintaining a home mortgage, will
likely still be doing itemized
deductions.
5: State taxes as an itemized deduction
will be limited to $10,000. Just take a
look at your last Schedule A and see if
this affects you.
6: If you pay alimony, it will no longer be
deductible. If you receive alimony, it
will not be taxed.
7: Mortgage interest will only be
deductible for the first $750,000 of the
mortgage.
8: Interest on a home equity line of credit
will no longer be deductible.
9: 529 college savings plans can now be
used for K-12 private schooling. This
might help your current year’s budget,
but taking the college money out to
spend on your 6th grader is not wise.
This money has been set aside to
spread the college expense over many
years because college is expensive. Be
careful to not fall into the trap of using
the money previously saved for college
on K-12 private schooling.
Overspending on private K-12 is a big
problem for a lot of doctors I counsel.
They often do not have the money to
pay for private school, but are steadfast
in their determination to keep their
kids in private school. This new rule
will hurt us in the long run if we use
the money we have been saving for our
kids’ college on today’s bills
10: The penalty for not having health
insurance will be lifted. Most doctors
have insurance and do not pay this
penalty, but this effect will be felt by an
increasing number of your patients
not being insured. If everyone is not
“ Cutting through
all the baloney
we see on TV
and the internet,
what is the real
effect of this
new tax plan?”
Dr. Cory Fawcett
required to have insurance, and
2016 that was $12,150 for me, my wife
insurance companies must pay for pre- and one son still at home. I will also lose
existing diseases, premium costs will
$14,850 in state income and property tax
rise. They are already too high. This
deductions that exceeded the new cap of
rule will hurt your bottom line in two
$10,000. Those two lost deductions,
places, higher insurance premium
$12,150 + $14,850, increased my taxable
costs and more uninsured patients.
income by $27,000.
11: Estate tax exemption will move up to
Using the new tax chart below, my 2016
$11,000,000 for each person. Most
federal tax would be increased to $23,339.
doctors will
Rate
Individuals
Married Filing Jointly Tax in Bracket
never have
Up to $9,525
Up to $19,050
$1,905
an estate this 10%
12%
$9,526 to $38,700
$19,051 to $77,400
$7,002
large so this
effectively
22%
$38,701 to $82,500
$77,401 to $165,000
$19,271
eliminates
24%
$82,501 to $157,500
$165,001 to $315,00
$36,000
your federal
32%
$157,501 to $200,000
$315,001 to $400,000
$27,200
estate tax
$400,001 to $600,000
$70,000
worries. The 35% $200,001 to $500,000
problem is
37%
Over $500,000
Over $600,000
this number
I will not get the new child tax credit,
is constantly changed by congress. By because my son is not under age...
the time you die, who knows what the
rule will be.
Dr. Fawcett is an award winning author, speaker,
At almost 500 pages in length, the new tax
plan has many more rule changes I didn’t entrepreneur, personal coach, and repurposed
general surgeon. He completed his bachelor’s degree
discuss, but the changes listed above are
the ones most likely to affect the average
in biology at Stanford University, his doctor of
doctor. The pass through business changes medicine at Oregon Health Sciences University
may also be very helpful to those who own and his general surgery residency at Kern Medical
their own medical practice.
Center. Learn more about how to live healthy,
I applied the above tax changes to my
happy, and debt-free lives–to regain control of your
2016 tax returns. This is the easiest way
practice, time, and finances at drcorysfawcett.com
to see how these rules effect your taxes.
For me, in 2016 I paid $19,837 in
federal income tax. With the new rules, I
Read the rest of this and other articles at
will lose my personal exemptions. For
www.PhysiciansOfficeNews.com
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