Inflation Tax: What You Need to Know

October 25, 2022November 5, 2020 by Justin Nabity

You don’t have to be an economist or have studied macroeconomics in college to know that inflation is a dirty word. With inflation comes the higher costs of products and services, while at the same time, the value of our money lessens.

From 1990 to 2018, the average inflation rate in the United States was 2.46% per year. In other words, items that cost $100 this year will cost $102.46 next year, and so on, and so on …

And with inflation comes the inflation tax, which can affect your long-term savings accounts and retirement plans. Fortunately, with some strategic investing and proper retirement planning, there are ways to reduce your inflation tax.

Ready to learn what the inflation tax is all about? Want to know how you can avoid it? Here’s everything physicians need to know about the inflation tax.

What Physicians Should Know About 457 b Deferred Compensation Plans

October 18, 2022October 12, 2020 by Justin Nabity

aaron-burden-cEukkv42O40-unsplash-scaled

You’re never too young to invest in a sound retirement plan. Most physicians are around 30 by the time they finish training and start practicing medicine. Getting that later start makes it crucial that you start saving for retirement early on in your career.

But with so many investment options and retirement plans to choose from, it can be difficult to determine which one is best.

Most physicians working as employees of large hospital groups will have the opportunity to invest in a 403b or 401k. Many physicians working for governments and tax-exempt organizations will have the opportunity to invest in a 457(b) plan instead.

Not sure how the 457(b) works?

Here’s what physicians should know about 457(b) deferred compensation plans.

3 Ways to Avoid Taxes on Life Insurance Benefits

December 27, 2024October 7, 2020 by Justin Nabity

Veronica Baxter | Boonswang Law Firm As a general rule, they do not tax proceeds from a life insurance policy as income to the recipient. Whether the proceeds take the form of death benefits or Accidental Death & Dismemberment (AD&D) benefits to the insured, the IRS does not consider those proceeds income. Accordingly, three scenarios … Read more

Alternative Tax Free Income for Physicians

June 27, 2024July 15, 2020 by Justin Nabity

When is the right time to use a life insurance contract as part of your financial plan? Now, cash-value universal life insurance contracts are an often overlooked investment vehicle that can offer physicians tax-efficient, low-risk wealth accumulation. As you weigh the value of a life insurance contract in comparison to other financial products, it is … Read more

5 Tax Planning Strategies for Physicians

October 3, 2023January 3, 2020 by Justin Nabity

Compared to professionals in other industries, physicians rank among some of the highest-paid individuals in the United States. And, as all American workers know, the more you earn, the more you pay in income taxes.

The 2020 tax season is quickly approaching. If you haven’t already started planning how you’re going to file your fiscal 2020 tax returns, the time to start is right now. By putting the right strategies in place, you can reduce your tax burden and devise a sound financial plan for retirement.

Ready to learn how?

From diversifying investments to reducing taxable income, here are the five tax planning strategies every physician needs to know.

How To Avoid Common Physician Tax Errors

June 20, 2023October 9, 2019 by Justin Nabity

While it’s true that most doctors are relatively high-earners, physicians also face unique financial obligations. Which makes it essential to avoid any mistakes when it comes to taxes. By avoiding a few common tax errors, doctors can keep more of their earnings to put towards financial goals. Such as paying back loans, saving up for … Read more

5 Ways for Doctors to Save on Taxes

October 19, 2022April 2, 2019 by Justin Nabity

A physician’s busy schedule doesn’t slow down for tax season, and most doctors don’t have time to sift through every potential write-off or tax credit to save money. As a result, doctors usually pay significantly more in taxes than others in the same income bracket. Even with high average salaries, doctors still have to plan … Read more

It’s Tax Season: How Will the Big Changes Affect Physicians?

July 29, 2022March 13, 2018 by Justin Nabity

April 17th is right around the corner, and everyone is talking about the new tax laws. Therefore, here are the key takeaways to help you understand the changes and maximize your return as a practicing physician. Changes First, small businesses are getting bigger breaks with the business income left after you pay yourself a salary. … Read more

What’s The Deal With Taxes?

August 5, 2022September 28, 2016 by Justin Nabity

Having Tax Problems? You’re Not Alone

“No new taxes!”. Those were the words of George Bush Sr. when he was running for president in 1988. Similar messages are communicated and thought of not only during election years. But this sentiment resonates in the minds of most. Who are trying to find ways to lower the amount of taxes they pay regardless if it’s an election year.

If I were to ask you if you think taxes are higher than they were 30 years ago, most of you would say yes. While this is true, it’s not quite that simple. Let me explain. Approximately 30 years ago, there were only 2 income tax brackets, 15% and 28%. If you filed your taxes as married filing jointly, any income you earned under $29,750 was taxed at 15%. And they taxed any income you earned over that amount at 28%.

For single tax payers, it was 15% for any income earned under $17,850. And 28% for any income over $17,850. Today, things look a little different. If you file your taxes as married filing jointly, you can make up to $231,450 before you go above the 28% tax bracket. If you file as single, you can make up to $190,150 and still be in the 28% tax bracket.

Higher Income

For higher income earners, the highest tax bracket for 2016 is 39.6% and this percentage is used to calculate the amount of taxes you pay for any income over $415,050 for single filers. And $466,950 for married joint filers. One common misconception is that if you make $500,000, the entire $500,000 will be taxed at the higher tax bracket. While this might be how it feels, this isn’t the case. You see, your income is taxed at graded increasing levels the higher your total income is.

There are currently 7 income tax brackets ranging from 10% – 39.6%. To understand how you’re taxed we need to be familiar with a few terms. You may have heard of the terms marginal tax rate and effective tax rate. The marginal tax rate is the highest tax bracket someone is in based on their total amount of annual income. The effective tax rate is actual tax rate you pay when you figure all of your income because your income is taxed at the different tax rates so some of your income would be taxed at 10%, some at 15%, some at 25%, some at 28% and so on, depending on how much you earn.

The Doctor’s Life Podcast Episode 042b- Are Taxes Robbing You?

November 14, 2022September 13, 2016 by Justin Nabity

Are Taxes Robbing You?

It’s a good question. You put in the effort to earn your paycheck, and the government wants to say they are taking “their” share. Are they taking more than they should? How will you know and fix it?

Dave Swan is back on The Doctor’s Life Podcast to help you with what to look for if you believe taxes are robbing you and how to take your money back! All episodes of The Doctor’s Life Podcast are available on iTunes, and Android. Make sure to subscribe and you will be the first to get new episodes of The Doctor’s Life Podcast.

Higher Income

Are Taxes Robbing You?

Collaborate with the experts at Physicians Thrive.

Contract Services

Protect Yourself

Manage Your Money

Practice Management

Get connected. Join Us.