Love my Job - BUT VHCOL making it Extremely Tough!!

[BLADEMDA]

The 50% Rule​

I met with a CPA recently, and she notes that auditing of an S Corp is pretty darn rare and she's never heard of a doctor being audited on this particular point. But she recommended that you pay yourself no less than 50% of your take home as salary and suggested a range of 50-70% of your take-home should be salary. The theory, she stated, was that some of your income is from being a prudent manager of the business and for taking on that business risk. But in emergency medicine, most of your income comes directly from your own patient care fees, not from other business income. I think if you were a family practice doctor with 3 PAs working for you and selling some supplements on the side, you could justify a lower percentage of your income being salary than a shift-worker like an emergency doc could. But the point is that whatever you pay yourself, you'd better be able to have some kind of data to justify that number if the IRS comes asking. When they do audits, they start with those people who pay themselves 0% in salary and work their way up from there.

white coat investor

---

Members don't see this ad.

 

[triggermaster]

You really are just saving on Medicare taxes with a corp

John Edwards the former senator got really bashed in the news in 2004 for his s corp and paying himself 10% salary (500k of his true business profits (5 million) so he saved himself 290k in Medicare taxes alone when he ran for vice president with another tax cheat (John Kerry I want to dock my yatch in another state to avoid taxes)

So should John Edwards have paid himself 2.5 million?

https://www.washingtonpost.com/archive/opinions/2004/03/01/the-edwards-loophole/696e06e6-72d4-4b14-a4b5-bf896b101c37/

That’s what blade meant by saying lawyers are far worst at the s corp tax schemes.

I agree. The IRS should have recategorized his distributions as wages and charged a 20% false reporting fine.

 

[aneftp]

I agree. The IRS should have recategorized his distributions as wages and charged a 20% false reporting fine.

IRS only follows laws.

Congress makes laws. Lawyers look over laws

You think if they wanted to change the s corp tax structure. They would be now

The reason they dare not touch the law is due to politics. Considering both tax cheats Edwards and Kerry are democrats who vowed to go after the rich. They look horrible politically. And had zero intention of touching this part of the irs tax code.

So both republicans and elite democrats don’t like to pay their fair share of taxes.

 

[pgg]

So explain to me what part of tax fraud I’m doing? Again. I think a lot of stuff against me is just purely either people are not knowledgeable about the rules or just jealous.

I'm not going to dig and link prior posts. We've been over this. You can browse those past posts yourself.

Maybe you can pull up SDN on your home theater, which you deducted because you checked your work email on it once.

 

[<(^_^)>]

You left out the 40% crash that happened 4 months earlier in 2008 with the stock market.

95% of Americans do not have even more than $1000 disposable cash each month let alone

99% of Americans do not have $10k disposable cash each month to invest.

My brother and his wife make more than 1.2 million a year in California. Which is normal for a two physician family.

But 3 kids. The dogs the house and investment homes. They don’t have 10k disposable cash each month. Plus supporting elderly parents now paying for 2 kids in college. One is ivy league at 60k plus in tuition plus another kid going to same Ivy League (legacy). 3rd kid at uc so cheaper.

Still it’s hard to save $13k a month with 2 kids even with 1 million plus earnings a year

Wow, after paying off their house, their investment homes, sending 3 kids to college and paying full freight, and supporting their elderly parents they don’t have money left over.

 

[nimbus]

I love how much flame the OP is getting for liking fresh produce... I live in SF and I was telling my wife (who grew up here) about this thread as we walked through Whole Foods talking about what trash WF produce is. I don't know, maybe we're brainwashed, but if the failsafe on fresh food in flyover country is Whole Foods, I'm not buying it. We are farmers' market types, spend a lot of time outdoors, and have family here, so our circumstances are a little different. We have friends who are actual billionaires who split their year between LA and Colorado. When in Colorado, they have all their produce shipped in and even with all those resources, they say it isn't like being home where everything is right off the truck. The other day our kids (3 yr old twins) were being ****s so we had to keep them out all day. We started with a run in the jogging stroller through Golden Gate Park. They danced with a couple musicians who had set up shop in the car-free zone that has sprung up, and climbed on the public art. We scored some almond croissant at Tartine. On a whim, we hopped the train to Ocean Beach and let them run their aggression out in the sand dunes. They made themselves fuzzy slippers out of the thick ocean foam and laughed their assess off for an hour. And this was on a Tuesday. It's not that you CAN'T get that stuff elsewhere, but... And not being from here, it took me a LONG time to get over my cynicism, and preferences are preferences, but it really is better living here.

So to the OP and the other CA acolytes, you let your flags fly, man; you have my support to blow your retirement living here. Life is long and things happen. Maybe you inherit something, maybe your preferences change down the line.

All that being said, however, you have chosen not just an expensive region (the Bay Area), but one of the most expensive zip codes in the world (Los Gatos), and there is a LOT of room to be just as coastal for a LOT less. Someone mentioned Marin, which isn't exactly cheap, but for $2M you can get a house in a good school district that is architecturally and aesthetically way less vomit-inducing as the one you showed. I wouldn't live in that house if someone paid me $2.9M.

Can’t say I ever had the chance to stay there but characters like this can only thrive in under certain conditions and the Bay Area is one of them.

Margaret Grade, Whose California Inn Was Beloved by Stars, Dies at 72

Her Manka’s Inverness Lodge drew actors and writers who dined at Ms. Grade’s farm-to-table restaurant and reveled in her eccentric flair.

www.nytimes.com

 

[pgg]

Can’t say I ever had the chance to stay there but characters like this can only thrive in under certain conditions and the Bay Area is one of them.

Margaret Grade, Whose California Inn Was Beloved by Stars, Dies at 72

Her Manka’s Inverness Lodge drew actors and writers who dined at Ms. Grade’s farm-to-table restaurant and reveled in her eccentric flair.

www.nytimes.com

Paywalled ...

 

[nimbus]

Paywalled ...

Tributes to the woman on Reddit.

 

[The Knife & Gun Club]

4215 Ingraham Hwy, Miami, FL 33133 | MLS #A11186966 | Zillow

This 2095 square feet Single Family home has 4 bedrooms and 3 bathrooms. It is located at 4215 Ingraham Hwy, Miami, FL.

www.zillow.com

In the spirit of posting about $2,000,000 plus starter homes, I give you this gem from Miami Florida. 2.4 million for a 2000 sq ft built in 1949.

 

[MirrorTodd]

4215 Ingraham Hwy, Miami, FL 33133 | MLS #A11186966 | Zillow

This 2095 square feet Single Family home has 4 bedrooms and 3 bathrooms. It is located at 4215 Ingraham Hwy, Miami, FL.

www.zillow.com

In the spirit of posting about $2,000,000 plus starter homes, I give you this gem from Miami Florida. 2.4 million for a 2000 sq ft built in 1949.

Well it's really the location you're buying anyway.

 

[ambiturner]

The house from the original post in this thread is pending. I’m genuinely curious to see what someone was willing to pay for it.

 

[nimbus]

The house from the original post in this thread is pending. I’m genuinely curious to see what someone was willing to pay for it.

Damn, 100 days on the market. That house either had issues or was grossly overpriced.

 

[abolt18]

4215 Ingraham Hwy, Miami, FL 33133 | MLS #A11186966 | Zillow

This 2095 square feet Single Family home has 4 bedrooms and 3 bathrooms. It is located at 4215 Ingraham Hwy, Miami, FL.

www.zillow.com

In the spirit of posting about $2,000,000 plus starter homes, I give you this gem from Miami Florida. 2.4 million for a 2000 sq ft built in 1949.

I love seeing the price history. Despite the fact that it's been listed since mid-2022, they keep RAISING the price. Lol that seems to be working out great for them.

 

[ucladoc2b]

Damn, 100 days on the market. That house either had issues or was grossly overpriced.

Likely both

 

[pgg]

Well it's really the location you're buying anyway.

If the seller waits long enough, eventually it'll be offshore!

 

[Caninehalitosis]

I have a California Real Estate license and kind of tune in to Real Estate issues. I also have 2 kids looking in the first home market. Couple of article from this week. Renting is cheaper than owning article and direction mortgage rates likely heading.. Renting been cheaper than owning in Orange County for years but now applies to many metros. Last metric in coastal OC was about 60%. (In other words you can rent for about 60% what it would cost to own). Lots of people can afford to rent but are unable to buy. On the landlord side CAP Rates (yearly rent/cost to buy rental) run around 3%. A fundamental investing rule is: If the CAP rate is lower than the cost of capital it will be a losing investment. Were I a young Doc in a VHCOL market I would rent or find a different job.

https://www.marketwatch.com/story/renting-is-now-cheaper-than-owning-in-all-of-americas-50-biggest-metro-areas-8cd4cd03

From the Wall Street Journal 3/22/2024: The New Normal for Mortgage Rates Will Be Higher Than Many Hope​

https://www.wsj.com/finance/the-new-normal-for-mortgage-rates-will-be-higher-than-many-hope-40a10162?mod=Searchresults_pos1&page=1