Every week, a variety of experts from all across the anesthesia world discuss data, analytics, and strategies that can help you modernize and empower your anesthesia practice. Enjoy!
Tax Tips #2: Large Anesthesia Groups
With some very simple--no cost--structural changes, large anesthesia groups can help their providers reduce the amount of income they incur taxes on by $100,000 or more. The best way to move in this direction, though, is for the group's providers to understand the strategy and approach the leadership with it.
But this sort of forward thinking from a group's leadership could not only protect their employees' wages, but could also make them a much more appealing employer from a recruiting standpoint.
We once again welcome Glenn Henderson, CPA/ABV, CVA, AEP with CCK Strategies, PLLC and appreciate his insights.
Mr. Henderson has been a CPA for over 43 years, currently with a company called CCK strategies. He is one of the partners, and has been over their Texas office for four years as of December 1st, 2021. He previously had his own practice for 27 and-a-half years, but saw the opportunity to merge with a forward thinking firm and offer a broader range of services to his clients.
Tax Tips #1: Small Anesthesia Practices & Sole Practitioners
Filing as an S Corporation, forming a C Corporation, and defining "Reasonable Wage" - 3 tax concepts that every small anesthesia partnership & sole practitioner needs to be aware of.
A huge welcome to our expert guest speaker: Glenn Henderson, CPA/ABV, CVA, AEP, and partner at CCK Strategies, PLLC.
An LLC that Files As An S Corporation
One of the most important things that sole practitioners or small partnerships of anesthesiologists can do is actually become an LLC that files for federal income tax as an S corporation. If they didn't do anything else, that helps to split their income into earned income as well as a return on equity. Put in tax terms, we can avoid payroll taxes on the return on equity while we still pay them what's considered to be a reasonable wage.
What we avoid, then, is actually more than just the payroll tax. If your wages are over 250,000, you’re required to pay what we call ObamaCare taxes, which are an add-on to your income tax. However, S corporation income is not included in that income that's taxed at a higher rate. That's an additional 3.8%. Although that starts off sounding like a small amount, when some of your income is already unnecessarily being taxed at 19% or 20%, basically already adding 50% to your tax burden. So just with some basic restructuring, we can avoid some of those taxes and reduce your income tax burden by about a third, so that it becomes significant when you add those things up.
Forming a C Corporation
For our clients who already have an S corporation, another structural change that we suggest and accommodate is forming a C corporation with a fiscal year end. That C corporation's purpose is to help with the marketing, the strategic planning, and with logistics of an anesthesia practice.
Deferral is a significant and important part of this structure. We can defer some of the net income of your S corp into a C corp for up to 11 more months until the tax is due. Then, at the same time, we can also set up some other things and look at some other opportunities, especially for retirement in that new C corp.
And finally, I did wanna tell everybody that you have to have what's called a “reasonable wage” for those that are providing services to the S corp or the C corp. So while we can't eliminate payroll taxes altogether, we can minimize that wage to a reasonable amount, and then everything that exceeds that wage would enjoy the benefits of the reduced tax. And that's really what I would offer as the first advice for any sole practitioners and small partnerships. It’s really just some simple structural changes, but they can make an enormous impact by saving about one-third of the tax on a large chunk of the providers’ incomes.
If you’d have any questions about taxes and your anesthesia practice, you can reach out directly to Glenn via email at email@example.com.
About The Speaker
Glenn Henderson has been a CPA for over 43 years. After running his own practice for 27+ years, Glenn saw an opportunity to partner with a forward thinking practice and expand service offerings to his clients. He merged his practice with the CCK Strategies team and now specializes in mergers and acquisitions as the partner over the Texas office. He has worked successfully with small and large anesthesia practices throughout the years.
About CCK Strategies, PLLC
CCK Strategies is a Tax and Business Consulting firm that combines a broad scope of expertise with personalized service. With a team of more than 125 people serving clients worldwide, CCK provides innovative solutions and creates value at every stage of a business’s life cycle.
CCK offers the depth of resources, both domestic and international, required to be successful in today’s business marketplace. We are more than a firm, we are your partners.
CCK Strategies, PLLC Website: https://www.cckcpa.com/
The Importance Of Data
In this episode:
1) A surprise visit from our producer, David Henderson, with some updates about the Time Out show!
2) Dr. Z discusses how data, though often overlooked & undervalued, can play a vital role in empowering and modernizing your anesthesia practice.
Who Owns The Surgical Data?
Anesthesia practices, obviously, need different data points to be able to successfully report compliance, safety, productivity, and all kinds of other meaningful measures. But do they need to enter all of that data by hand?
A good portion of that data already exists in the hospital's EMR, and the value of sharing the data is immense. Not only can an anesthesia group objectively evaluate and improve their performance, but individual providers can spend less time entering duplicate values on multiple sheets of paper.
BUT: The data would need to be shared.
This can get political and roadblocks can appear, seemingly, out of nowhere if the hospital or its IT team don't share a cooperative spirit.
In this episode, Dr. Z shares some familiar questions that come up along these lines and how to navigate them successfully.
Anesthesia Ready Time
Not all anesthesia providers track "Anesthesia Ready Time" on the anesthesia record. Adding it to your form, after all, means additional time and effort. Is it worth it?
Dr. Z explains the definition of Anesthesia Ready Time and why tracking this one simple measure can make an enormous impact. Check this episode out and let us know: do you track Anesthesia Ready Time? If so, how do you define it? If not, why not?
Visualizing Anesthesia Data: Heat Maps
If anesthesia providers want clarity & assurance that they're making the right calls to establish and grow their practices, they'll need to stop relying on memory and emotion, because, after all, we're all human. The truth is, so much data can be found in the anesthesia record they're already using!
In this episode, using just 5 data points from the anesthesia chart, Dr. Zavaleta will deliver information on how to create visuals like heat maps (and other charts) that paint a clear picture of OR Utilization. You won't believe the value that can be uncovered!
Thanks for this informative explanation on the value of tracking first case delays. Powerful and meaningful analytics really can help transform behavior.