It's still not too late to set up a retirement plan for your practice and get some tax breaks on your 2006 return. (See "Easing the bite on retirement saving," Feb. 16, 2007.) For self-employed physicians, a simplified employee pension (SEP) plan is often the way to go, since it's generally less complex and easier to administer than other types of plans. To get you started, several websites discuss how a SEP works, its advantages, rules on eligibility and contributions, and tax implications. The sites include those of the IRS (www.irs.gov/publications/p560/ch02.html), the US Department of Labor (www.dol.gov/ebsa/publications/sepplans.html), and InvestorGuide.com (www.investorguide.com/iguretirepension.html).
Staying healthy has all sorts of obvious benefits, but it can also help protect your credit score. According to the results of a survey of 1,150 low- and middle-income households, 29 percent that had a credit card balance said that medical expenses contributed to their current level of credit debt. These households had an average balance of $11,623, compared to $7,964 for those without a major medical expense or other contributing health-related debts in the previous three yearsa difference of 46 percent. Moreover, medically indebted households without health insurance carried a larger balance than those with coverage ($14,512 vs $10,973). The findings were released by Demos, a nonpartisan public-policy research and advocacy organization, and The Access Project, which works with local communities to improve health and healthcare access. The study's authors say they expect greater use of credit cards to fill gaps in health coverage, especially as insurance options featuring higher deductibles and out-of-pocket expenses become more widespread.
The US Supreme Court declined to review a class-action claim originally filed in May 2002 on behalf of 200,000 resident physicians, a decision that brings the case to a close. The suit charged that the National Resident Matching Program, its sponsoring organizations, and teaching hospitals violated antitrust laws by preventing competition for residents' services, artificially depressing and standardizing wages below competitive levels, and conspiring to establish rules that accredit and govern residency programs. The US District Court for the District of Columbia had dismissed the antitrust claims with decisions in 2004 and 2005, and the Court of Appeals affirmed those rulings last year. 'We're pleased that the nation's highest court has finally closed the books on this long legal battle,' said Darrell G. Kirch, MD, president and CEO of the Association of American Medical Colleges.
Is the IRS in the business of selling cars? Not directly, of course. But the agency wants to remind taxpayers who buy a qualified Ford hybrid that they can still claim the Alternative Motor Vehicle Credit. During the quarter ending Sept. 30, 2006, Ford sold only 4,626 qualifying hybrids, says the IRS, bringing its total to 16,511far short of the 60,000 vehicles that must be sold before the tax credit begins to phase out. Barring any sales surge, the credit should be available for a while, for the Mercury Mariner and the Ford Escape. The credit on the 2006 and 2007 Mariner is $1,950; the Escape's is either $1,950 (four-wheel drive) or $2,600 (two-wheel drive) and applies to model years 2005 to 2007. Credits are more valuable than deductions because they reduce your tax liability dollar for dollar instead of merely shrinking your taxable income.