Napa

[periopdoc]

That's pushing the limit.

Not even close. That's pretty much the standard for these folks. I know one person who claims 60k salary on >500k gross.

I've avoided this tax minimization strategy myself, as I'm already likely high ok the IRS radar with my crypto.

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[Dr. Rude]

Not even close. That's pretty much the standard for these folks. I know one person who claims 60k salary on >500k gross.

I've avoided this tax minimization strategy myself, as I'm already likely high ok the IRS radar with my crypto.

It can be pushing the limit and it could be pretty common. Sorta like everybody speeding on the highway. You going at the speed of traffic (everybody doing it) is not a defense.

 

[periopdoc]

It can be pushing the limit and it could be pretty common. Sorta like everybody speeding on the highway. You going at the speed of traffic (everybody doing it) is not a defense.

Except. It's not like that at all.

It would be more like driving on a highway where the speed limit is listed as "whatever is reasonable and prudent." Reasonable and prudent is most likely to be going with the flow of traffic, though you can never guarantee that there isn't that one cop who will disagree with your analysis of reasonable and prudent, and charge you with speeding anyway.

The IRS doesn't publish a list of allowable salaries. If they did, then your speeding analogy would be correct. The posted speed limit would be analogous to the allowable salary.

It's up to the taxpayer to determine a reasonable salary. Reasonable is determined by what is commonly done. If you can demonstrate that your claimed salary is common for your area, then the law says that is acceptable, though you can never guarantee that there isn't that one IRS agent who will disagree with your determination, and charge you with tax fraud anyway.

The most common salary for people who do this is in the 100 to 200 range. 100 is pushing the limit. 150 is going with the flow of traffic.

 

[Dr. Rude]

Except. It's not like that at all.

It would be more like driving on a highway where the speed limit is listed as "whatever is reasonable and prudent." Reasonable and prudent is most likely to be going with the flow of traffic, though you can never guarantee that there isn't that one cop who will charge you with speeding anyway.

The IRS doesn't publish a list of allowable salaries. If they did, then your speeding analogy would be correct. The posted speed limit would be analogous to the allowable salary.

It's up to the taxpayers to determine a reasonable salary. Reasonable is determined by what is commonly done. If you can demonstrate that your claimed salary is common for your area, then the law says that is acceptable. Doesn't mean there won't be an auditor who will try to charge you with tax fraud.

The most common salary for people who do this is in the 100 to 200 range. 100 is pushing the limit. 150 is going with the flow of traffic.

"Reasonable" may also be a matter of opinion.
If the anesthesia group A in town has a bunch of 1099 docs declaring 150K per year as income while the hospital across town anesthesia group B has the W2 docs declaring 500K that wouldn't seem 'reasonable' to most folks.

 

[periopdoc]

"Reasonable" may also be a matter of opinion.
If the anesthesia group A in town has a bunch of 1099 docs declaring 150K per year as income while the hospital across town anesthesia group B has the W2 docs declaring 500K that wouldn't seem 'reasonable' to most folks.

Uh, that's almost exactly what I just said. It's a judgement call, and you need to ensure your claimed salary is common for your area.

 

[anaesthetic]

This thread just reinforces why I could never be “good” at running a business. You have to be willing to push the limits of what is “legal” to maximize your own bottom line and pray to the gods that you aren’t the slowest runner, all while bragging about how smart you are to strangers because you managed to write off an expensive ski trip, amongst other shades of gray. Low 100s salary for an anesthesiologist? Incredible how we are underpaid at $500/hr but as soon as you are your own practice, you’re okay with paying yourself $60/hr as a reasonable income (so long as everyone else around your area agrees!).

No thanks. Just a regular ol’ W-2 tax-paying sheeple here admiring all the people willing to stretch the law for a buck.

 

[periopdoc]

In Dr Rude's example, you are driving down the highway. There is a pack of cars travelling 65 (500k), and a pack of cars travelling 75 (150k) down our reasonable and prudent highway. The cop may pick you off, and ticket you for travelling 75, but you have a valid defense to the charge. Whether the small benefit of travelling with the faster group is worth the risk of getting a ticket, going to court, and the risk of a judge disagreeing with your analysis is a personal decision on risk tolerance.

 

[Gasworks]

I spent the better part of a year working these top paying locums gigs. My best months were in the neighborhood of 100k. The common thread among these places were unfavorable geography and dysfunctional administration.. usually a combination of both since it’s so hard to attract competent players to the middle of nowhere.

What does that mean on a day to day basis? I’ll try to sum it up as best I can:
1. Long days.. you have morning blocks and afternoon addons almost every day. Average day is 12-13 hours.
2. Every surgeon is an important somebody and has the CEO on speed dial. 5 minute delay? I’m calling the CEO. You can only run 1 room at 3am? CEO. You’re delaying my elective case because the patient just happens to have crushing chest pain? CEO.
3. Busy weekends are the norm. Most of these surgeons cover 2-3 hospitals and push the non emergent stuff to the weekend. Your entire weekend will be spent doing choles, psbos, hips and as soon as the dust settles some nice young meth head will roll it at 2am needing a stat section.
4. Lack of OR staff is the rule not the exception. Hospital will beg us to hire a couple of crnas to run afternoon cases then declare that they can only run 1 room after 2pm. Cases get stacked, OR runs until midnight and more nurses quit.
5. Chaos.. every day over the most insignificant things. Watching the CNO scrambling into the OR in her heels and pants suit to shuffle the entire schedule to squeeze in 1 EGD so nobody has to speed dial the CEO. This happens almost every day.

Ultimately I decided that the money just wasn’t worth the headaches and stress. I opted to find a stable “regular” job with competent staff and quality surgeons in a favorable area. The 50% paycut will take some getting used to but luckily I was too busy to spend any money last year.

 

[periopdoc]

This thread just reinforces why I could never be “good” at running a business. You have to be willing to push the limits of what is “legal” to maximize your own bottom line and pray to the gods that you aren’t the slowest runner, all while bragging about how smart you are to strangers because you managed to write off an expensive ski trip, amongst other shades of gray. Low 100s salary for an anesthesiologist? Incredible how we are underpaid at $500/hr but as soon as you are your own practice, you’re okay with paying yourself $60/hr as a reasonable income (so long as everyone else around your area agrees!).

No thanks. Just a regular ol’ W-2 tax-paying sheeple here admiring all the people willing to stretch the law for a buck.

Agreed. That's why I don't do it. I did the math, and I would save a couple of thousand per year by doing what I felt comfortable with claiming for salary. Not worth the headache. I'm in an area with one anesthesia group, and one hospital system. Unless every one of my partners agreed to setting up individual corporations, paying 150k salary per, I think I would have a really hard time defending paying myself that little. The local market just doesn't support that claim. It's totally different in a large metro area, where you are reasonably certain to find comps for whatever model you are using.

 

[Dr. Rude]

Uh, that's almost exactly what I just said. It's a judgement call, and you need to ensure your claimed salary is common for your area.

Not exactly. Do you compare yourself to what all the other 1099s are doing? Or do you compare yourself to all anesthesiologists-including W2?

 

[periopdoc]

Not exactly. Do you compare yourself to what all the other 1099s are doing? Or do you compare yourself to all anesthesiologists-including W2?

The IRS says... Yes

 

[nimbus]

That’s baloney.

It’s the 1/3 rule. That’s why I paid myself 130k w2 wages (remember I still pay full social security wages back then) and Medicare. So govt still get my w2 portion of payroll taxes. That’s only roughy 500k 1099

If I were making 750k 1099. I would pay myself 250k.

CRNA 1099 pay themselves 50k w2 wages (as “RNs”.

You just list ur professional as medical on the tax returns. It doesn’t list the actual speciality as physicians.

The ski cme with $200 plus lift tickets I took. That’s a 20k tax write off alone. Totally legit. With cme to prove it. Tons of snow this year by the way. But the reality is I’m only getting a 30% discount. So tax write offs are nice but u still pay 66% or the cost urself

I’ve done tons of ski CME.

Write off course fees, airfare, hotel, and some food? Yes.

Lift tickets and equipment? No.

 

[DirtDocMD]

Sure, it’s an “exaggeration”, but think about how much “political action” is done in the name of “taxes” (to the tune of a few hundred billion, here and there), while the Fed goes around printing TRILLIONS….

 

[pgg]

The ski cme with $200 plus lift tickets I took. That’s a 20k tax write off alone. Totally legit.

Lift tickets? Really?

Wait, I get it. You needed the lift ticket to get up in the air high enough to get a cell signal so you could check your work email.

 

[Dr. Rude]

Lift tickets? Really?

Wait, I get it. You needed the lift ticket to get up in the air high enough to get a cell signal so you could check your work email.

If you were an orthopedic surgeon you could claim that the ski vacation was a trip to cultivate new business on the slopes.

 

[The Duck Knows]

Lift tickets? Really?

Wait, I get it. You needed the lift ticket to get up in the air high enough to get a cell signal so you could check your work email.

It’s was CME. Trying to learn more about arterial oxygen content at altitude. They’ll probably need to do surfing lessons next to compare to sea level. After that maybe scuba diving or snorkeling in Mexico

 

[pgg]

Make the homeowners in CALI pay a federal asset tax since they got lucky buying 30 years ago and did zero to deserve it

Sounds like you're jealous

 

[nimbus]

Sounds like you're jealous

He’s not wrong. Most people think wealth is a result of hard work and good decision making but they underestimate the role of sheer luck.

 

[nimbus]

Not at all, as I’d never want to live in California, but for the people who piss and moan about tax equity (you guys, it’s the law, etc etc), it always seems to be the people who earn the least money but also already have the most money.

I didn’t luck into being a physician or making a lot of money by working hard. People who struck gold accidentally in housing totally lucked into that for the most part, and certainly didn’t put in any substantial effort to become wealthy almost entirely by chance.

Am I jealous of people who get lucky? Not especially, but they sure as heck ought to be paying more taxes than the million dollar 1099 worker who is keeping a safety net hospital functioning.

That guy and other high earned income people should get tax breaks the more he works, the incentivize him to work more!

In California we only make half that busting our butts at safety net hospitals. We also get income taxed up the wazoo. But we made that choice. The property taxes are low though. There are pluses and minuses.

 

[nimbus]

That’s because California has the most regressive earned income vs asset tax structures that I know of in the country. It’s why housing is impossibly expensive there, people can hold houses forever for dirt cheap instead of paying normal tax on them

It may be regressive but it’s very popular. It’s a 3rd rail for all the politicians.

 

[pgg]

He’s not wrong. Most people think wealth is a result of hard work and good decision making but they underestimate the role of sheer luck.

I was born into a nuclear family, just down the road from you in La Jolla ... I know how lucky I am. Started life on 3rd base, I did.

I'm making fun of him for mistaking my contempt for our resident tax fraudster for "jealousy".

 

[DesiredMemberName?]

This is why I sneer at people complaining about how unfair it is.

If you’re earning your money, keep your money. If you’re sitting on your ass-ets and producing zero value because you got lucky on Microsoft or some bs, then I’m all about complaining about people not paying enough tax.

End of the day, we work our butts off for our money while keeping people safe. Make the homeowners in CALI pay a federal asset tax since they got lucky buying 30 years ago and did zero to deserve it

Also, don’t forget: they’re still paying property taxes on the valuation from that purchase 30yrs ago plus an inflation adjustment. So they may be paying property taxes on a 500k valuation when the real market value is closer to 4mil.

That is insane.

 

[Shimmy8]

As a W2 employeee…no longer able to deduct CME and related expenses from W2 according to my CPA.

May start a 1099 company for locums work to deduct this from, as I do enjoy conferences and trips that come with it. So stupid.

 

[nimbus]

As a W2 employeee…no longer able to deduct CME and related expenses from W2 according to my CPA.

May start a 1099 company for locums work to deduct this from, as I do enjoy conferences and trips that come with it. So stupid.

Can you deduct it through your practice? I submit receipts for cme and related expenses to our practice manager. They reimburse me the full amount pretax from my gross revenues. That money never even shows up on my W2. It’s treated as a pretax expense like medical staff dues, health insurance and malpractice insurance.

 

[sevo00]

As a W2 employeee…no longer able to deduct CME and related expenses from W2 according to my CPA.

Was this ever possible? I don’t think this was ever a thing. Plus for w2 most cme money is given by the employer anyways through the cme fund in addition to your salary

 

[Shimmy8]

It was a thing until changes through the Tax Cuts and Jobs Act.

Not all employers offer CME or the ability to deduct through them. I used to do same nimbus, but that has been eliminated.

I don’t know if employers will continue to be able to offer that or not. We were bought out so it’s no longer offered, but that may just be company policy vs accounting reasons.

 

[GassYous]

It was a thing until changes through the Tax Cuts and Jobs Act.

Not all employers offer CME or the ability to deduct through them. I used to do same nimbus, but that has been eliminated.

I don’t know if employers will continue to be able to offer that or not. We were bought out so it’s no longer offered, but that may just be company policy vs accounting reasons.

It is tax deductible so they are being cheap

 

[anbuitachi]

Fairfax Virginia is way too complex of an anesthesia practice for any private group to takeover. The number and sheer volume of everything done there (peds complex cases, extremely busy women’s OB, major hearts/lungs including transplants). Fairfax is not your run of the mill suburban trauma one center. You simply cannot plug and play locums docs and expect it to run smoothly. Add that they are extremely short staff crna’s as well. The peel off order is horrible.

I leave at 10-11am as early out Fairfax you are lucky to leave by 3-4pm early out.

what is early out? likle work from 7 to 11am for you? 4 hrs and go home?

 

[GassYous]

what is early out? likle work from 7 to 11am for you? 4 hrs and go home?

Low call like the first people to be relieved

 

[IMGASMD]

what is early out? likle work from 7 to 11am for you? 4 hrs and go home?

When we were an actual functioning private practice and fully staffed….. first out is definitely before 12. Could be as early as 10. (A few GI cases, off you go…)

 

[DocMcCoy]

When we were an actual functioning private practice and fully staffed….. first out is definitely before 12. Could be as early as 10. (A few GI cases, off you go…)

Those days are loooong gone.

 

[Anesthesia_Guy]

Those days are loooong gone.

They'll return. They always do.

 

[IMGASMD]

They'll return. They always do.

I can always chase my dream somewhere that it does……

Or just wait out the Napa empire that’s falling…..

 

[Dr. Rude]

That’s baloney.

It’s the 1/3 rule. That’s why I paid myself 130k w2 wages (remember I still pay full social security wages back then) and Medicare. So govt still get my w2 portion of payroll taxes. That’s only roughy 500k 1099

If I were making 750k 1099. I would pay myself 250k.

CRNA 1099 pay themselves 50k w2 wages (as “RNs”.

You just list ur professional as medical on the tax returns. It doesn’t list the actual speciality as physicians.

The ski cme with $200 plus lift tickets I took. That’s a 20k tax write off alone. Totally legit. With cme to prove it. Tons of snow this year by the way. But the reality is I’m only getting a 30% discount. So tax write offs are nice but u still pay 66% or the cost urself

After reading this, I am beginning to become more sympathetic to your position:

Julian Block On Cosmetic Surgery As A Business Expense

Video English: Seal of the United States Tax Court. Source: http://www.ustaxcourt.gov/. (Photo credit: Wikipedia) Julian Block is back with another fascinating tax decision from the past. Exotic Dancer’s Breast Implants Are Deductible Just because you incur expenses for business reasons doesn’t...

www.forbes.com

 

[Southpaw]

After reading this, I am beginning to become more sympathetic to your position:

Julian Block On Cosmetic Surgery As A Business Expense

Video English: Seal of the United States Tax Court. Source: http://www.ustaxcourt.gov/. (Photo credit: Wikipedia) Julian Block is back with another fascinating tax decision from the past. Exotic Dancer’s Breast Implants Are Deductible Just because you incur expenses for business reasons doesn’t...

www.forbes.com

To be honest I think she has a much better defense for claiming implants as a business expense than an anesthesiologist trying to write off ski rentals and lift tickets as a business expense during a CME trip.

 

[anbuitachi]

Hourly w2 is the worst to be unless it comes with gold plated healthcare university and retirement benefits.

Only reason I’m a w2 (was 1099 for long time as well) I’d because of state university benefits. No one believes me but I’m at 21% for effective tax rate making 450k w2 which isn’t bad for 40 hour week. Plus the generous benefits.

When I was 1099 my effective tax rate was 12-15% for 500k 1099 working 40-45 hours a week no benefits.

But 1099 hourly is by far the fairest way to compensate anesthesia “providers”. Locums crna’s making 400-450k at my place easy. Plus those housing $4000/month stipend. (50k housing they just pocket since most live within 45 min-1 hour driving distance

tell me more. how did you achieve 21% as w2? no state and city tax?

 

[sevo00]

tell me more. how did you achieve 21% as w2? no state and city tax?

he prob means 21% of the total compensation which included healthcare and retirement etc. its prob more than 21% if just pure salary

 

[anbuitachi]

I spent the better part of a year working these top paying locums gigs. My best months were in the neighborhood of 100k. The common thread among these places were unfavorable geography and dysfunctional administration.. usually a combination of both since it’s so hard to attract competent players to the middle of nowhere.

What does that mean on a day to day basis? I’ll try to sum it up as best I can:
1. Long days.. you have morning blocks and afternoon addons almost every day. Average day is 12-13 hours.
2. Every surgeon is an important somebody and has the CEO on speed dial. 5 minute delay? I’m calling the CEO. You can only run 1 room at 3am? CEO. You’re delaying my elective case because the patient just happens to have crushing chest pain? CEO.
3. Busy weekends are the norm. Most of these surgeons cover 2-3 hospitals and push the non emergent stuff to the weekend. Your entire weekend will be spent doing choles, psbos, hips and as soon as the dust settles some nice young meth head will roll it at 2am needing a stat section.
4. Lack of OR staff is the rule not the exception. Hospital will beg us to hire a couple of crnas to run afternoon cases then declare that they can only run 1 room after 2pm. Cases get stacked, OR runs until midnight and more nurses quit.
5. Chaos.. every day over the most insignificant things. Watching the CNO scrambling into the OR in her heels and pants suit to shuffle the entire schedule to squeeze in 1 EGD so nobody has to speed dial the CEO. This happens almost every day.

Ultimately I decided that the money just wasn’t worth the headaches and stress. I opted to find a stable “regular” job with competent staff and quality surgeons in a favorable area. The 50% paycut will take some getting used to but luckily I was too busy to spend any money last year.

i dont get it. you are locum here. why do you care if they call the ceo. i dont care if htey call the president of the US. im not doing crushing chest pain case if its elective

also if you are locum arent your hours defined? does 3am meth head/constant addons affect you? unless those are your hours

 

[aneftp]

Those days are loooong gone.

They still exist. First out is usually done around 11-12pm at my place.

I’m modified first out tomorrow 11am-2pm. I could have worked 645am-12pm but 11am-2pm a better deal.

2nd/3rd out can vary. 2nd out left 1230 today. 3rd out left 130pm.

4/5th out are full 8 hour days usually.

he prob means 21% of the total compensation which included healthcare and retirement etc. its prob more than 21% if just pure salary

35% tax bracket doesn’t kick in till 440k ish for married couples.

32% tax bracket doesn’t kick I fill 340k for married.

So the vast majority of my federal taxes is at 24% of lower.

It’s not total compensation.

It’s simple math using federal tax formula.

Add to that can have pretax 401a (10k ish)
Pretax 403b (or Roth post tax) $22500-30000
Pretax 457b ($22500-30000)
Hsa family pretax
Standard deduction for married is 25k or itemized more
Child care tax credit $4000 (2 kids)

Mine u. This is effective tax rate 21%

40% of usa people pay 0% effective tax rate.

It’s also a reason not to be w2 at amc working 55 hours a week or more for 550k these days. U don’t have access to 50-70k pretax retirement accounts like state plans too much is exposed to higher tax rates. I’d rather work 40 hours. Or less.

Now if amc were paying 700k for 55 hours a week. I Probabiy would think about it.

 

[Gasworks]

i dont get it. you are locum here. why do you care if they call the ceo. i dont care if htey call the president of the US. im not doing crushing chest pain case if its elective

also if you are locum arent your hours defined? does 3am meth head/constant addons affect you? unless those are your hours

CEO calls are just a nuisance. But a constant and ever present one that eventually wears you out. Locums or not I still want my service to run safely and efficiently. Having to stop my flow to interact with suits isn’t the best way to do that. As far as hours go.. if you want to make 100k+ a month all those hours are yours. Day/night/weekend.. I’m glad I did it but won’t ever do it again.

 

[Thepassageofgas]

The vast majority of 1099 Anesthesiologists are not declaring 50% of their gross income as wages. That's why the IRS hates Independent Contractors. They get less money. I agree that about 1/3 of gross income is more typical for 1099 providers. Some declare a lot less because of a Cash Balance or Defined Benefit Plan.

For a S Corp there are 3 pots of money to divide up. #1 is salary. #2 Distributions K1 #3 expenses. So, typically expenses are 1/3 or more of the business leaving 1/3 for K1 and 1/3 for salary. On paper it still looks like you are paying yourself 1/2 of income in wages.

EXAMPLE:

S-Corp- $600,000 gross income. $200,000 expenses, $200,000 K-1 and $200,000 Salary. Some like myself were able to push the expenses to $300,000 leaving just $150,000 for salary and $150,000 for K-1 distributions.

Hi Blade
If I’m an s-corp but exist alone, why do i have to spread money to K1 if I don’t have any other partners? Thanks for this breakdown!

 

[anbuitachi]

CEO calls are just a nuisance. But a constant and ever present one that eventually wears you out. Locums or not I still want my service to run safely and efficiently. Having to stop my flow to interact with suits isn’t the best way to do that. As far as hours go.. if you want to make 100k+ a month all those hours are yours. Day/night/weekend.. I’m glad I did it but won’t ever do it again.

its only 77 hours a week if you want to do 100k a month! 6x 13 hr days. !

 

[anbuitachi]

didnt trump do like 70k on just haircuts or something, and deducted all of that.. probably for many years. it wasnt until recently that he was caught!. and this guy makes milllions

 

[aneftp]

didnt trump do like 70k on just haircuts or something, and deducted all of that.. probably for many years. it wasnt until recently that he was caught!. and this guy makes milllions

Trump just paid stripper/call girl with side money. It’s a misdemeanor at most. Bill clinton did far worse with felony lying. And he was lawyer lying about sex.

That’s the two face hypocrisy of the democrats.

 

[GassYous]

Trump just paid stripper/call girl with side money. It’s a misdemeanor at most. Bill clinton did far worse with felony lying. And he was lawyer lying about sex.

That’s the two face hypocrisy of the democrats.

And you know, calling for an insurrection against the government and trying to overturn free elections but nbd

 

[JoelJoel84]

Trump just paid stripper/call girl with side money. It’s a misdemeanor at most. Bill clinton did far worse with felony lying. And he was lawyer lying about sex.

That’s the two face hypocrisy of the democrats.

He paid her and reimbursed Cohen with campaign funds, not side money; that’s the issue and the crime.

 

[aneftp]

He paid her and reimbursed Cohen with campaign funds, not side money; that’s the issue and the crime.

Lying under oath is a crime also.

 

[GravelRider]

Lying under oath is a crime also.

You mad, bro?

Are you really still sulking about that? It was like 30 years ago. Maybe move on?

 

[aneftp]

You mad, bro?

Are you really still sulking about that? It was like 30 years ago. Maybe move on?

I’m not mad. I love Bill Clinton as president. I voted for him. Everyone thinks I’m a right winger. I’m far from that.

I just want to make valid points on principles. If you support lying felony under oath bill Clinton about sex. Trump doing the same. No need to be hypocritical.

 

[anbuitachi]

i meant to talk about the taxes . trump wasnt found out until he became president. if he didnt become president, he probably wouldve gotten away with it forever