MDNews - Cleveland-Akron-Canton

++++++++++++++++++++++++ + + ++++++++++++++++++++++++ BUSINESS SECTION +++ +++ Part 1 of 2 By Paul Guerra M Practice Succession: Factors to Consider ANY PHYSICIANS FIND their wealth is mostly tied up in their practices, which provides well for them and their families. When the time comes for them to exit or sell their practice and retire, however, physicians often have not quantified how they would replace their income. The fact is retirement is an emotional, financial and timing issue for physicians. If you own your own practice, you may want to consider the following factors. First, the recent economic malaise has brought home the concerns about relying on your practice alone to fund retirement. Just as your investments should be diversified, so should your assets. Though it may be difficult to do in a challenging economic climate, you should save and accumulate retirement assets away from your practice to make progress toward retirement. Second, consider if your practice is an asset you can sell. Practices that offer either a wide range of services or have a diversified patient base and have positive cash flows can often be sold. On the other hand, specialty practices that rely on you and your skills alone are generally not as salable. Most practices fall somewhere in between. Planning is a priority of the first order. It begins with the objectives you want to achieve. Talk through your concerns with a professional to ensure you have the plan, the capital, and the agreements in place to transition your practice when the time is right or events require succession in your practice. Next issue: Tax considerations, opera- tional issues, and economic concerns in selling a practice. DISCLOSURE: Investments in securities and insurance products are: NOT FDIC- INSURED/NOT BANK-GUARANTEED/ MAY LOSE VALUE. Paul Guerra is the president of Brookshire Wealth Management in Canton OH. Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Brookshire Wealth Management is a separate entity from WFAFN. s Continued from Page 37 gains if the Bush tax cuts expire in 2013. Coupled with the 3.8% surtax on invest- ment income is a .9% added Medicare Tax on wages for individuals earning above $200,000 and couples earning over $250,000. Employers will need to gear up their payroll systems to provide for withholding the added .9% payroll tax when wages subject to Medicare Tax reach the level of $200,000 for an individual. If you are self-employed, the extra tax will need to be added to your estimated tax payments. Since the surtax is targeting higher income earners, there are some strategies that can be used to limit your exposure. If you are involved in a passive activity, you may be able to increase your involvement so you are considered active for purposes of the activity so it's not subject to the 3.8% surtax. If you have rental property, look for ways to decrease the net income via improvements and depreciation. If you are planning on disposing of gain producing property after January 1, 2013, explore possibilities of a tax deferred exchange or offsetting losses to reduce or eliminate current taxable gains. Consider additional funding to your qualified retirement plans to lower your income. Shift savings and investment income to tax exempt investments. Take advantage 38 | Cleveland/Akron/Canton MD NEWS s MDNEWS.COM s NOVEMBER-DECEMBER 2012 of Flexible Spending, Health Savings and Dependent Care accounts. Individual planning is essential because each situation has different circumstances and solutions. Take steps sooner rather than later to keep you're MAGI below the surtax thresholds where possible. Diane Burge is a CPA and principal with Weidrick, Livesay, Mitchell & Burge in Akron. s

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