Medical Economics Logo
  • Physicians Money Digest

  • Physicians Financial News

  • Physicians Practice

  • Chief Healthcare Executive

  • Patient Care Online

All NewsCareersLegalMoneyOpinionPhysicians Financial NewsPractice ManagementTechnology
Around the PracticeBetween The LinesClinical ConsultExpert InterviewsMedical Economics PulseMedical World NewsOff The Charts PodcastsPhysician ReportPrimaryViewSlideshows
Academy
Conference CoverageConference Listing
Medical EconomicsPatient Care SupplementSponsored ContentSponsored ResourcesSupplements And Featured Publications
CME/CEJob BoardSubscribe
Financial Advisor Guide
CareersCareersCareersCareersCareersCareersCareersCareersCareers
LegalLegalLegalLegalLegal
Medical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & Technology
Opinion
Physician's Money DigestPhysician's Money DigestPhysician's Money DigestPhysician's Money Digest
PolicyPolicyPolicyPolicyPolicyPolicy
Practice FinancePractice FinancePractice FinancePractice FinancePractice FinancePractice FinancePractice Finance
Practice ManagementPractice ManagementPractice ManagementPractice ManagementPractice ManagementPractice ManagementPractice ManagementPractice Management
Practice TechnologyPractice TechnologyPractice TechnologyPractice TechnologyPractice TechnologyPractice TechnologyPractice Technology
Screening
Special ReportsSpecial ReportsSpecial Reports
Spotlight -
  • The benefits of a physician MBA program
  • Concierge Medicine 2.0 by Castle Connolly Private Health Partners
  • Physician Bootcamp
  • Physician Report
CareersCareersCareersCareersCareersCareersCareersCareersCareers
LegalLegalLegalLegalLegal
Medical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & TechnologyMedical Device & Technology
Opinion
Physician's Money DigestPhysician's Money DigestPhysician's Money DigestPhysician's Money Digest
PolicyPolicyPolicyPolicyPolicyPolicy
Practice FinancePractice FinancePractice FinancePractice FinancePractice FinancePractice FinancePractice Finance
Practice ManagementPractice ManagementPractice ManagementPractice ManagementPractice ManagementPractice ManagementPractice ManagementPractice Management
Practice TechnologyPractice TechnologyPractice TechnologyPractice TechnologyPractice TechnologyPractice TechnologyPractice Technology
Screening
Special ReportsSpecial ReportsSpecial Reports
    • Academy
    • CME/CE
    • Job Board
    • Subscribe
Advertisement

Article

January 25, 2012

Tax-related moves to make in 2012

Regardless of who wins the current tax debate and who wins the upcoming elections, planning opportunities in 2012 will help you minimize both income taxes and estate taxes for the benefit of you and your heirs.

Key Points

Under current law, after 2012, long-term capital gains tax rates are scheduled to increase from 15% to 20%. The additional 3.8% Medicare tax also will be applied if you are married and your joint income exceeds $250,000 annually. This is in addition to the 0.9% surtax on earned income.

CAPITAL GAINS TAX

Similarly, if you intend to sell real estate (except for your principal residence where other rules apply), you may wish to sell during 2012 to minimize capital gains taxes. The new 3.8% surtax also applies to taxable interest, dividends, rent, some annuities, and royalties.

In addition to capital gains tax rates increasing, the top tax rate on wages is scheduled to reset to 39.6% from 35% starting in 2013. You might want to accelerate earned income in 2012 to avoid higher rates in 2013. Starting in 2013, the law (unless changed) will disallow the first 3% of your itemized deductions, including charitable gifts. You may wish, therefore, to accelerate such deductions in 2012 while watching out for the alternative minimum tax.

INDIVIDUAL RETIREMENT ACCOUNTS

Now is also the time to consider whether making a Roth individual retirement account (IRA) conversion makes sense. Although doing so would result in your paying income taxes now, with higher tax rates in 2013 and beyond, biting the bullet may be wise. Once converted, as long as the funds remain in the Roth IRA for at least 5 years and until after you are age 59 ½, all of the growth will be tax-free (not tax-deferred, as with a regular IRA). You can have many years of tax-free income building within a Roth IRA.

Further, your tax-free Roth IRA is an excellent estate-planning vehicle because it can pass to your children or grandchildren and remain income tax-free throughout their lives, making this a multigenerational tax avoidance strategy. Unlike a regular IRA, a Roth IRA does not require that minimum distributions commence at age 70 ½. Essentially, you do not have to withdraw any amount of money throughout your lifetime. You can also make post-tax IRA contributions, regardless of your income, and then convert them into Roth IRA contributions to build up the tax-free aspect of your portfolio. Roth IRA income won't be subject to the 3.8% tax on net investment income that starts in 2013.

If you maintain a 401(k) plan, contribution limits increased in 2012. You can contribute $17,000 per calendar year and an additional $5,500 per calendar year if you are at least 50 years old in 2012.

Newsletter

Stay informed and empowered with Medical Economics enewsletter, delivering expert insights, financial strategies, practice management tips and technology trends — tailored for today’s physicians.

Subscribe Now!
Related Videos
Succeeding in value-based payment: A conversation with Joshua M. Liao, MD
Succeeding in value-based payment: A conversation with Joshua M. Liao, MD
Succeeding in value-based payment: A conversation with Joshua M. Liao, MD
Succeeding in value-based payment: A conversation with Joshua M. Liao, MD
Succeeding in value-based payment: A conversation with Joshua M. Liao, MD
ACP policy update 2025: A conversation with Brian E. Outland, PhD
ACP policy update 2025 interview
ACP policy update 2025 interview
ACP policy update 2025 interview
Related Content
Advertisement
U.S. inflation ticked up in June as a core prices remain sticky © Ink drop - stock.adobe.com
July 15th 2025

U.S. inflation ticked up in June as core prices remain sticky

Zed Williamson and the Physician Growth Accelerator Podcast featured on Medical Economics
June 21st 2025

The peril of relying on one person at your practice

ACP calls for risk adjustment overhaul to improve health equity, cut red tape © Andrey Popov - stock.adobe.com
July 2nd 2025

ACP calls for risk adjustment overhaul to improve health equity, cut red tape

Zed Williamson and the Physician Growth Accelerator Podcast featured on Medical Economics
June 5th 2025

How behavior patterns drive or derail your practice

© Complete Allergy & Asthma
June 27th 2025

Enhancing patient outcomes by strengthening allergy evaluation in primary care settings

Understand who you are selling your medical practice to before you sign: ©KMPZZZ - stock.adobe.com
June 25th 2025

How to understand the difference among potential buyers of your medical practice

Related Content
Advertisement
U.S. inflation ticked up in June as a core prices remain sticky © Ink drop - stock.adobe.com
July 15th 2025

U.S. inflation ticked up in June as core prices remain sticky

Zed Williamson and the Physician Growth Accelerator Podcast featured on Medical Economics
June 21st 2025

The peril of relying on one person at your practice

ACP calls for risk adjustment overhaul to improve health equity, cut red tape © Andrey Popov - stock.adobe.com
July 2nd 2025

ACP calls for risk adjustment overhaul to improve health equity, cut red tape

Zed Williamson and the Physician Growth Accelerator Podcast featured on Medical Economics
June 5th 2025

How behavior patterns drive or derail your practice

© Complete Allergy & Asthma
June 27th 2025

Enhancing patient outcomes by strengthening allergy evaluation in primary care settings

Understand who you are selling your medical practice to before you sign: ©KMPZZZ - stock.adobe.com
June 25th 2025

How to understand the difference among potential buyers of your medical practice

About
Advertise
Contact Us
Editorial Staff
Job Board
Terms and Conditions
Contributor Guidelines
Privacy Policy
Do Not Sell My Personal Information
Contact Info

2 Commerce Drive
Cranbury, NJ 08512

609-716-7777

© 2025 MJH Life Sciences

All rights reserved.