The Best Tax Advice For Doctors

Getting your business structure right- from the start

with Sandeep Bhatt

 

Why you need a specialist tax advisor?

There is a specific tax law for medical profession. The Accountants with generic practice do not have time and resources to focus on special needs of doctors. With a specialist tax advice, a dentist saved $33,000 in tax every year. This was achieved by altering a contract with a major health fund. You need an accountant who provides intelligent solutions to your complex tax issues. He should work with you like your business partner and not just a compliance (number churning) accountant.

Doctors are time poor and need a tax advisor who systemises their record keeping. This systemisation enables you to focus on things that really matters, your patients’ care, practice and investments.

 

Why you need the right medical business structure?

A tailor made business structure may save thousands of dollars in tax every year. A Dentist was paying $20,000 more in tax due to the lack of a right business structure. A right tax advice legally saved him $20,000 in tax every year.

 

Medical Business Structures

Although there has been contention around the legitimacy of these types of structures in the medical field, they are still legal as long as you thoroughly follow the rules, regulations and guidelines. If you are thinking of undertaking one of these business structures consider contacting an accounting firm such as wealthpreneur as we specialise in the medical and dental sectors and understand its unique landscape.

Company Structure

A company structure is the most popular structure for businesses looking to grow and scale. It’s flexible, cost- effective and easy to set up. A key advantage of operating through a company is that it gives your practice a legal life separate to that of you and your partner. It means if the practice sued by a disgruntled patient or competitor, it’s the assets of the company that are exposed to the financial claim, not yours (although directors can be liable in some circumstances).

 

Companies can also provide more tax flexibility, as practice income belongs to the company and is taxed at the corporate tax rate of 28.5 percent (if classified as a ‘small business’). The owners only need to pay tax at higher individual marginal tax rates if the company chooses to pay them a dividend. Note though that a company isn’t always better for tax, since it doesn’t get access to the same capital gains tax concessions as an individual or a trust.

 

Trust Structure

A trust structure can be an option for a doctor looking to minimise personal risk and stream income streams to family. Setting up a trust, is not overly complex and can provide a great solution for the right business.

Owning a practice through a trust, with a company as trustee and the owners and their families as beneficiaries, can provide the best of both worlds. Set up correctly, a trust can provide the legal protection of a company while allowing maximum flexibility to minimise tax bills and also access capital gains tax concessions.

There are four main types of the trust structures: Discretionary trust, Service trust, Unit trust and Hybrid trust. There are advantages and disadvantages attached with each of them. In our view, the best approach is to choose a type of trust based on tax payers’ circumstances and business plans.

 

Want to solidify your tax plan?

Contact us now, click here!

 

Email: grow@wealthpreneur.com

Phone: +61 ( 2 ) 8896 6166

Parramatta Office: Level 15, Deloitte Building, 60 Station Street, Parramatta, NSW 2150

Hurtsville Office: Suite 294,9 Crofts Avenue Hurstville NSW 2220

 

INDUSTRY

Who we work best with…

Whether you’re an established business or investor, or just starting out, we’ll make sure you move your business beyond the numbers… while we focus on your growth potential.

When you work with us you will benefit from:

1. Leadership
2. Intelligent Solutions
3. Systemisation and Automation
4. Communication in simple terms
5. Business Coaching
6. Smooth Compliance
7. Resourceful Networking

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Parramatta Office

Level 15, Deloitte Building, 60 Station Street, Parramatta, NSW 2150

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