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Benefits partnership versus locums
I wanted to ask the experienced folks, what kinds of methods do people in partnerships use to reduce their taxable income. I am about to enter into partnership and the only thing I’m seeing is a deferred compensation plan (per our group you have to set it up yourself, its not a standard thing all the partners have…is this also normal?). Is this the only thing? I used to work locums full-time and there were so many tax savings from being 1099, are there any similar things if you get a K-1?
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4 Replies
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Depends on the group, as each is different . 401k/profit sharing plan is going to be pretty universal , I think. Our group also has a deferred compensation plan through the state and a cash balance plan. You could also have a health savings account if the group has a high deductible health plan
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You sure youre getting a k-1 and not a w-2? Things we get: maxed out 401k, Hefty health reimbursement account, cme reimbursement, office/licensing related expense reimbursement, which is lenient, mer/dental/vision/disability, etc.
You cant lie and deduct a big SUV as a business expense like a lot of 1099s do I suppose, so there are some negatives.
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Benefits are different for each group. To compare, you would need to go into specifics.
All things aside, the most important reasons to go for partnership over employed position are security and (at least some) control over the way you practice.
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Does partnership give you any additional tax incentives if its private practice? Many of the benefits mentioned in Valerians post we dont have – the group is big about flexibility and freedom and wanting to choose which benefits theyll actually use so everything is done individually. Itll definitely be k-1. Can you deduct the costs of benefits if the group doesnt provide them?
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