Q: What will be different for spine surgeons after the tax cuts expire?
Andrew Schrage: One thing that will be different for spine surgeons should the tax cuts expire is that they will pay more in Medicare payroll taxes if they earn more than $200,000 as an individual or $250,000 if they file jointly with a spouse. They could also face a significant reduction in Medicare payments depending upon how the fiscal cliff issue is resolved. This reduction is normally averted because of annual legislation, but it's not so clear that this legislation will be part of the fiscal cliff fix. If it isn't, Medicare payments for spine surgeons and all practitioners could decrease by as much as 25 percent.
Q: What are the smartest moves for spine surgeons to consider before the Bush Tax Cuts expire?
AS: One idea to consider right now is to reshuffle your investment portfolio. With the looming tax hikes, you want your investments that are most tax efficient, such as stocks and bonds that don't pay dividends, in taxable accounts. Investments that have a history of paying out significant dividends are best placed in accounts that are tax-deferred. If a traditional IRA is part of their portfolio, spine surgeons should consider converting it to a Roth IRA. That way, they would be paying taxes on their account now instead of in the future, when rates are almost sure to be higher. Gifting money to relatives can also decrease a spine surgeon's tax burden, as long as it's beneath the $13,000 limit for 2012.
Q: What impact will new tax rates have on spine surgeons and their practices?
AS: The new tax rates could very easily cause spine surgeons to raise their prices. Additionally, there is also a new tax on medical devices that could cause spine surgeons to raise their rates even more, though it's still unclear which medical devices will be subject to the new tax.
On a more personal level, the new tax rates could cause them to shift their investing perspective. Generally, surgeons have enough disposable income to put their money in more illiquid investments, namely venture capital. With the coming tax increases, spine surgeons may be more likely to invest in liquid assets in case their income is negatively affected as a result of the tax increases.
Q: How can they lighten the blow from potential new tax rates in the future?
AS: Spine surgeons should look to increase their compensation as much as possible this year. For instance, take year-end bonuses before December 31 if possible. Another idea is to defer expenses that may have been paid at the end of this year to the beginning of 2013. Surgeons can also delay the purchase of new equipment until next year in order to reduce taxable income.
Q: Where can spine surgeons turn to optimize their financial situation?
AS: The best bet for spine surgeons looking to optimize their financial situation post-fiscal cliff is to enlist the help of a certified financial advisor. These professionals can offer specific and actionable advice on the exact things spine surgeons can do now and into the future to weather the storm. The best place to look for one is the Financial Planning Association website.
More Articles on Orthopedics:
10 Points on Orthopedic Surgeon Compensation
6 Ongoing Challenges for Spine Surgeons
50 Spine Surgeons on the Move in 2012
What Orthopedic Surgeons Can Expect After Bush Tax Cuts Expire: Q&A With Andrew Schrage FeaturedWritten by Laura Dyrda | Thursday, 27 December 2012 16:43
Andrew Schrage of Money Crashers discusses what orthopedic surgeons can expect after the Bush Tax Cuts expire and the smartest financial moves heading into next year.Last modified on Thursday, 27 December 2012 17:44
© Copyright ASC COMMUNICATIONS 2017. Interested in LINKING to or REPRINTING this content? View our policies here.
Most Read - Spine
- Behind bars for fraud: Neurosurgeon Dr. Aria Sabit receives nearly 20-year prison sentence — 8 key insights
- 10 most popular spine stories of 2016
- Physician-owned ASCs driving lumbar spine fusion market growth — 4 things to know
- 40 statistics on spine surgeon and neurosurgeon pay
- Dr. Allan Friedman to perform spine surgery on Duke's Mike Krzyzewski: 5 key notes
Top 40 Articles from the Past 6 Months
- 20 new MIS spine devices in 2016
- 44 MIS spine devices to know | 2016
- Police investigate death of American Spine Center's physician accused in federal kickback scheme: 6 things to know
- Suicide likely cause of Dr. Sandeep Sherlekar's death, police report shows: 6 things to know
- 12 statistics on social media's presence in the healthcare space
- 38 female spine surgeon leaders to know
- Dr. Gregory Sherr sues HealthEast, CentraCare & 6 neurosurgeons for allegedly ruining his reputation & career — 6 things to know
- US News & World Report: Top 10 hospitals for orthopedics
- Oregon spine surgeon implicated in $22M lawsuit for paralyzing patient with dropped instrument: 5 things to know
- 7 things to know about Mazor Robotics & Medtronic's plans to roll out Mazor X
- 11 highest-paying states for orthopedic surgeons: New Jersey tops the list at $494.5k
- Beyond the implant — DePuy Synthes pushes innovation inside & out of the OR
- 21 statistics and facts for orthopedic surgeons — compensation, net worth and more
- The state of minimally invasive spine surgery: Dr. Frank Phillips on devices, payment & outpatient ASCs
- Are Stryker's hip implants about to be recalled?
- Understanding the Impact of the CMS 2017 ASC Payment Rule on Spine Procedures
- 19 more things to know about orthopedic bundled payments — September 2016
- Trump or Hillary? The physicians have voted
- 5 trends for orthopedic surgeons to watch in 2017
- 15 spine surgeons discuss techniques revolutionizing spine care
- FDA regulation, insurance coverage: Dr. Raj N. Sureja talks challenges in regenerative medicine
- Do you know what patients really care about when choosing a spine surgeon?
- Robotics is here to stay — Drs. Kornelis Poelstra & Dennis Devito on working with Mazor technology
- Medtronic, SeaSpine, Zimmer Biomet & more: 17 key notes
- 3 orthopedic clinics to pay $2.39M to settle False Claims Act allegations: 5 things to know
- 33 of the largest orthopedic groups in the US by number of physicians
- 10 thoughts and statistics on medical malpractice claims against orthopedists
- UCLA pays $8.5M to settle 2 lawsuits after undisclosed spine surgeon relationship with Medtronic: 5 key notes
- 4 of the most pressing challenges orthopedic surgeons face in 2017
- 5 largest orthopedic companies have 61% of market share
- What not to wear — Physician's attire elicits mixed responses in outpatient orthopedic centers
- 6 spine physicians ranked #1 on Google - 2016
- 8 spine codes CMS proposes for ASC coverage in 2017
- Dr. Robert Watkins performs spine surgery on Patriots' Rob Gronkowski
- Orthopedic residency programs violate Match Code of Conduct: 6 things to know
- 8 biggest stories in 2016's spine market — Acquisitions, lawsuits, bundled payments & more
- The science of healthcare delivery: 10 thoughts on the future structure of healthcare organizations
- Dr. Jonathan Falakassa joins Southern California Orthopedic Institute: 5 key notes
- The role of the surgical microscope in modern MIS spine — Drs. K.D. Riew, Michael Mayer, Roger Härtl & Mohd Hisam Muhamad Ariffin share their experiences
- Beyond oral opioids — Spinal cord stimulators, targeted drug delivery & the future of pain management