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Posted by paulthomascpa on September 14, 2009, 8:43 am
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> new doctor, just licensed to practise in state, not yet employed due to
> numerous "potential" employer demands for malpractise and incorporation.
>
> have filed for Professional Association, S-Corp with state and expecting
> to receive final docs in the mail within next 10 days.
Just to note: You make an "S" election with the IRS. The Secretary of
State (where you incorporated) is not able to grant you "S" status.
> have also filed for malpractise insurance(MP) and have accepted a bid from
> professional association member recommended insurer.
>
> question:
>
> I know the MP is tax deductible but I am still working some part-time jobs
> which are not in my medical license field (IT/computer related work).
>
> Am I able to declare any of the expenses of incorporation, malpractise
> premiums and personal health insurance premiums against my income for
> 2009, if I do not secure a job in my direct field of medical license this
> year?
>
> It is quite possible that I will end up working part-time in my
> IT/computer temp jobs without getting a "real" job offer (every recruiter
> and personnel type demanded I am incorporated and that I have my own MP
> insurance) until end of year 2009.
>
> Does that mean that my S-Corp filing fees, premium for MP and Personal
> Health Insurance are non-deductible this year if I don't get a medical
> field related paycheck ?
>
> If I do get a medical field job this year, I know for a fact that the
> S-Corp and MP premium is tax deductible but is my Personal Health also
> deductible as business expense?
I would hope that you find a competent tax accountant, CPA or EA, in your
area for advice, as you'll need it now and as things progress over the
years. Being in business, which is where you're headed, sometimes means the
tax and accounting isn't always a DIY job on top of doing your job of
running the business and providing services to your patients.
The incorporation fees and other costs are deductible, as I see it, as
start-up costs ratably over 15 years, although there is an option to deduct
up-to the first $5,000 in year 1. Those would be taken by the company on
the company tax return.
The big question is, when is your "Year 1" going to be? And that's one of
the things the CPA or EA can help you determine. Are you in business, or
still starting your business. Big question with lasting implications.
Medical insurance isn't deductible by the company, but would be taken on the
face of your personal return. That would be when you have a business up and
running. Which might be this year, might not. Otherwise, the health
insurance falls to Schedule A.
It's also an "employee" deduction type item, in that you should have an
employee - even if that's you - before the company pays health benefits.
It sounds to me that you're trying to win the horse race before you get the
horse saddled up. Your first focus should be on getting the company
established, then get the business established (that's different from the
entity formation), establish yourself as an employee, then worry about
employee benefits.
--
Paul Thomas, CPA
www.paulthomascpa.com
--
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