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.
David Henderson: Okay, well, welcome back to Time Out for Anesthesia, and welcome back Glenn Henderson... And just really quickly again, just give us a brief, who you are, where you work, and we'll get started from there.
Glenn Henderson: Well, I've been a CPA for over 43 years, currently with a company called CCK strategies, and I'm one of the partners, I'm over their Texas office. I've been here about four years as of December 1st. I had my own practice for 27 and a half years, but saw the opportunity to merge with a forward thinking firm and kinda broaden the horizons a little more service available to the client, so that's worked out real well.
DH: Awesome, that's great to hear. So talk to us a little bit, we're... Last time we met, we talked a little bit about individual providers and small partnerships, this time around, we're gonna address a different group of people. Who are we talking about today and what advice do you have for them?
GH: One of the things that we've tried to do, and we've worked with some of the larger anesthesia groups, we've approached them and told them that this would be a better tax structure for the anesthesiologists that are in their group. So far we haven't been successful, but I think it's worthwhile to share this plan so that if you have enough members of the group that are proponents, maybe the large groups could change their direction. It's almost all of the anesthesiologists that are in a large group, they basically live on a W-2. They get a huge W-2. And as you know, with the tax law changes that have come about in the last few years, you've lost your miscellaneous itemized deductions or un-reimbursed business expenses, they're just not even available anymore. So we approach the large groups by saying, if we... As an example, if we've got someone who makes $750,000 as their gross taxable wages on their W-2, why can't we shift that at no expense to the large group actually saving them some money too, but we could shift that to a $650,000 W-2 with $100,000 available for reimbursable expenses like automobiles, uniforms, tools of the trade, the things that anesthesiologists incur could be reimbursed expenses, their total package would still be $750,000, but they would only have to...
GH: We would be taking $100,000 out of their income tax return. So it's no small thing, but we just haven't had any receptivity from the big groups, but I think if enough of your anesthesiologists would express their interest, I think that would probably carry more weight than a tax accountant like me coming in and making a suggestion, which was gonna change their business model, but I still think that that's a viable option, we've had some success with that with others before, where we've been able to set up a reimbursement process for the professionals, lower their wages, and everybody wins. The group doesn't have to pay payroll taxes on the reimbursed expenses, and our client not only lowers their W-2 by the $100,000, but they also don't have to pay that additional ObamaCare tax on their tax return, so it gets to be significant if you think about it. We do work with some... And we've had anesthesiologists that have had separate investment, so we help with those things. For instance, one of our clients, an anesthesiologists actually invented something, and of course, in the process of developing an invention like this, you have expenses, so we've set up ways to capture those expenses and also ways to convert some of your...
GH: If your invention comes to fruition, the income on that can be long-term capital gain rather than ordinary income, so we could save half the income tax on the ultimate income from that. We've worked with some of the investments, like some of our clients that are doctors or anesthesiologists will invest in rental properties or they will invest in ranches. I just managed a project where a client purchased a $2 million rent, so we had them outline the fencing and how many tanks and describe the tanks, and we're able to... The barns any other hay structures or what's called cultural structures, or even the house that might be sitting there that the foreman house, we can actually set those up on a shorter depreciation schedule by doing that purchase allocation on the purchase of the property, so those can be some significant first year expenses for a ranching operation. So I'm just throwing out some ideas that with a little structure and with a little strategy, we can save a significant amount of income tax.
DH: For sure. And thank you so much. That's fantastic information. If any of the people watching our YouTube channel or listening to the podcast wanted to get a hold of you, would you want them to do that and how would you like them to do that?
GH: Sure, we are welcoming the opportunity to be a resource. My email is email@example.com, and that's CCK Strategies.
DH: Perfect. And we'll make sure to get that up on the website and everything, so if they wanna follow up and see it and click on it there they can.
DH: Excellent. Thank you again.
GH: Thank you, David.