The new tax law and year end tax planning

On December 17, 2010, the President signed into law the "Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010." With the uncertainty of taxes finally over, plain vanilla year end tax planning is still in vogue. If your income and deductions are about the same in 2010 and 2011, your tax burden will most likely be similar between the years.

Dividends and long-term capital gains for 2011 will continue to be taxed at 15%. There's no need to accelerate either type of income into 2010 to secure a lower tax rate.  Postponing income from 2010 to 2011 is still a valid year-end tax planning move. Accelerating deductions into 2010 from 2011 is also still a valid year-end tax planning move.

Know that bonus depreciation is increased from 50% to 100% for qualifying assets purchased after September 8, 2010, and before January 1, 2012. Purchase of new equipment before year-end will get your medical practic or healthcare business a 100% deduction for the cost.

About the Author

Reed Tinsley CPA

This article is written by Reed Tinsley, a Houston, TX-based CPA with over 30 years of experience advising physicians and medical practices across Texas and the United States. Reed holds certifications as a Certified Valuation Analyst (CVA), Certified Healthcare Business Consultant (CHBC), and Certified Financial Planner (CFP), specializing exclusively in the healthcare sector. He is a published author, nationally recognized speaker, and trusted advisor to physicians on accounting & tax, practice management, and financial planning. Schedule a Free Consultation.