Year-End Financial Planning Checklist for Optometrists

It's almost the end of the year, and Evon dives into a year-end checklist for financial planning actions that every optometrist needs to keep in mind.

He talks about retirement plan contributions, important student loan deadlines, tax and business planning considerations to review before the year ends and into early next year.

Have questions on anything discussed or want to have topics or questions featured on the show? Send Evon an email at evon@optometrywealth.com.

Check out www.optometrywealth.com to get to know more about Evon, his financial planning firm Optometry Wealth Advisors, and how he helps optometrists nationwide. From there, you can schedule a short Intro call to share what's on your mind and learn how Evon helps ODs master their cash flow and debt, build their net worth, and plan purposefully around their money and their practices. 

Resources mentioned on this episode:

• Retirement Plan Contribution Changes for 2024
• The Optometry Money Podcast Ep 63: Choosing A Retirement Plan for Your Optometry Practice
• The Optometry Money Podcast Ep 34: Five Levers to Control Capital Gains on Your Tax Return
• Federal Student Aid: One Time IDR Payment Count Adjustment 
• What to Know About the Corporate Transparency Act?

The Optometry Money Podcast is dedicated to helping optometrists make better decisions around their money, careers, and practices. The show is hosted by Evon Mendrin, CFP®, CSLP®, owner of Optometry Wealth Advisors, a financial planning firm just for optometrists nationwide.

Transcript

Evon: 0:04

Hey, everybody. Welcome back to The Optometry Money Podcast, where we're helping ODs all over the country make better and better decisions around their money, their careers, and their practices. I am your host, Evon Mendrin Certified Financial Planner(TM) practitioner, and owner of Optometry Wealth Advisors, an independent financial planning firm, just for optometrists nationwide. And thank you so much for listening. Really appreciate your time and attention and energy. And I'm excited to be back with some new content here on the podcast. It's been a couple of weeks. It's been a little while since I put out a new episode. just with a, an increase in families we've been serving here and just the, the amount of work to get ready and prepared for the end of the year for the clients and making sure that. We're doing everything we can and need to do to serve them appropriately. Just how to take a step back from a new episodes, but I'm excited to be back. from this point, moving forward with new content here and on today's episode. I'm going to dive into a bit of an end of year financial planning checklist. What are some end of year? Considerations that you need to think about many of which will be. We'll have a clear 1231 deadline, right? So there's an actual end of your deadline for you to think about these things. So let's dive on in, we'll talk about student loans. We'll talk about taxes. We'll talk about other things. So, let's dive on in, let's dive into an optometrist end of year guide or end of year financial planning checklist And the first thing we'll talk about is end of year considerations for student loans. And I have one big thing on my mind here. a special consideration for 2023. And that is the one-time income driven repayment account adjustment, the one-time IDR account adjustment. if you've been paying on your loans for awhile, especially if you have been or intended to be on income driven payment plans, if you are planning or trying to work your way towards forgiveness. you need to look into the one-time IDR account adjustment. The IDR waiver as it's called elsewhere. And see if and how it applies to you. And I'll throw a link to the student aid website's webpage on this. So you can, you can take a look through it. But what the one time account adjustment does, is it something that was announced. maybe over the last year or two. And comes to completion by the, at the end of this year. And what it's trying to do is that if you think about iDR plans and the route to forgiveness there has unfortunately, Historically been a lot of ways where you can accidentally miss credit towards forgiveness, whether it was public service, loan, forgiveness. Whether it was long-term 20 or 25 year forgiveness. you might have been in the wrong, the wrong type of debt. Maybe you had FFE El fel loans instead of direct. Maybe you were in the wrong repayment plan. Maybe you consolidated your loans and didn't realize that that would erase past history towards forgiveness. So there were a lot of lace to unfortunately accidentally trip up and not get the credit you were hoping you'd be getting towards forgiveness. So. The, the government announced this account adjustment that would happen, that would, that has already and will continue through. We'll continue to adjust payment counts. To provide pretty broad credit for past payment history towards forgiveness, both PSLF as well as the longer term taxable forgiveness. And it's a, for those that had benefits, it's a pretty broad, really cool benefit to the co to sort of clean up and fix the system a little bit and sort of reset it. And this is already been happening for, for borrowers who already have reached the point of forgiveness. So if you're already automatically going to be getting forgiveness, you, you may have already seen this happening. And this payment adjustment is Going to be continuing through the beginning of next year. And many borrowers need to take action in order to benefit from this account adjustment. more specifically, many borrowers may need to consolidate their federal loans. Into direct consolidated loans by the end of this year by 12 30, 1 of 2023, in order to benefit for this. Essentially, if you have FFEL loans, if you have FFEL loans, Those need to be consolidated by the end of the year. In order to get credit for those FFEL loans. If you have one, if you have overlapping loans and you have one loan with a much longer payment history, well, you need to consolidate so that all of your loans can get that longer credit history, payment history. So there's certain borrowers that are, that are needing to take action through consolidation. And that consolidation has to have started. The process needs to be started. Before the end of this year, 12 30, 1 of 2023. That is a hard deadline that, that cannot be moved or adjusted. Right. So please take a look through the student aid website. Take a look at how, or if it may apply to you and take the action that's appropriate to you because this is providing Pretty broad credit, for, for certain circumstances that are one of the biggest ones. I think in my opinion, are. you know, credit for payment history before consolidation, which is a pretty awesome there because a lot of people had consolidated not realizing that. It, it replaced all of your loans with new consolidated loans and erased all of your payment history that came before that. So, so a pretty big benefit here that sort of resets the system, but for those that need to take action. You need to take that action before the end of this year. So that's, that's a big one on my mind. Other things to think about in terms of student loans, this is not necessarily an end of year deadline, but if you are needing to use the pay as you earn plan, and you're not currently on it, you need to make that decision. and go on to the pays you earn income, different plan by July of next year, July, 2024. After July comes and goes, you can no longer get access to pay As You Earn if you're not already on it. Right. So as long as you're on it, You're not going to get removed from it, but if you're not on it already, once that deadline passes, you're not able to get back on. And it's, it's mostly important for those that are, that were new borrowers as of the fall of 2007. And between 2014. So like new, new borrowers between 2007 and then 2014. Because if you are a new borrower after 2014, Then you have access to a different income, different plan called the new income-based repayment, new IBR and, under IBR. It's basically. a twin of Pay As You Earn. for the most part, it's almost identical. So you have a little bit more flexibility there with that plan, but, If you were a new borrower after 2007. but before 2014 than, than you need to think hard about whether Pay is the right plan for you under 20 years of forgiveness, rather than the SAVE plan under 25 years forgiveness. if you are in fact, going for forgiveness as your approach for student loans. and then the other thing is just to review your IDR recertification date, meaning that if you're on an income, different plan, you need to a once a year reshow your income and family size to recalculate your payments for the next 12 months. And so just review when that is, when that's coming up. think about as you're wrapping this tax year up, how you might need to. file taxes for, for this tax year, as well as when you should do that, whether you should file an extension. So just the timing of income and the type of income you'll use to show your income for student loan purposes. Think about that. As you're approaching that recertification date next year. And also think about whether you're using pre-tax benefits or deductions most efficiently to positively impact that. Whether let's say you're married and both of you are on income, different plans, or maybe even one of you is. Are the pre-tax deductions and benefits on the right spouse's pay stub for example, or should you, should you load them onto one versus another? If you're in a community property state, should you be filing taxes separately? Should, should one of you be using your pay stubs as alternative documentation. So just start to keep that in mind as you're, as you're wrapping the year up and you're approaching that next recertification date, perhaps next year. Retirement accounts. Let's talk about retirement accounts. What are some things you need to keep in mind before the end of the year for retirement accounts? number one, review your employee contributions to your workplace retirement accounts. So that's for the most part, 401k plans, simple IRA plans. Review the amount that you are on track to put in. Through 1231 of this year. And just make sure that that's, you're on pace to hit wherever you want to hit. So for example, if you want to hit the maximum amount allowed for the year, Make sure you're on pace for that. And if not, just sort of track how many pay periods you. Reliably expect to be able to change that forth through the rest of the year. And you're probably going to look at one or two. I mean, at this point, we're in December here, and try to make that adjustment before the end of the year, these employee amounts have to be done through payroll. Through the rest of the year. Right. And for the 401k, the employee maximum this year is going to be 22,500. if you're 50 or older, that increases to 30,000, there's a catch up there amount that you can add. A simple IRA plans are lower that's 15,500 for the year as an employee. And then 19,000, if you are 50 or older, So take a look at what you're putting in as an employee. If you are the, the owner of a practice that is taxed as an S corporation or any, any business that's taxed as an S corporation, you are an employee as well. So your employee contributions need to be thought about the same way. If you're an independent contractor and you are. You have an LLC and you're taxed as an S corporation because that's what you are advised to do. And you have a solo 401k, then your employee contributions need to be handled through the same way through payroll. So take a look at that, make sure you're on track for where you want to be. And then just adjust to make that over the remaining pay periods through the rest of the year. if you are a practice owner, Think about profit sharing contributions, hopefully by now we're in December. Hopefully by now you've. Started that conversation. If your 401k plan allows for it. hopefully you've started that conversation with your advisor, your financial advisor, or planner, your tax professional, your 401k administrator. to sort of start to project out the taxes through the rest of the year. Start to figure out what you would expect to be able to do for a profit sharing. contributions to yourselves and all of your employees. make sure that you're going to have enough cash available for that. So, Start to have that conversation. Alongside all of the other tax planning considerations that would come alongside of that. So just start to make sure you're prepared for that. And you have an idea of what that would look like and whether it's beneficial or not to do that profit sharing contribution. Do you need to establish a plan for 2024, right? Maybe you don't have a retirement plan at all. And you're thinking about adding on a retirement plan. many practices would consider the simple IRA versus the 401k plan. as you're doing that, you know, for the most part, the biggest differences that many people will latch onto are costs. There are platforms that will have relatively low costs than you might be familiar with with. Larger 401k platforms or like legacy 401k platforms. but I also remind you of tax credits available for new retirement plans that can offset much of, if not all of the administrative costs to start a 401k plan. as well as help you to, offset matching dollars for employees. Keep that in mind as you're making that decision, ultimately. the 401k plan will be the the better long-term solution, most likely. and these tax credits can offset or at least help offset. the cost differences between a 401k and this simple in the early years. So, um, I have, uh, an episode, that I've done not too long ago with that. I'll throw a link to that in the show notes. So you can hear about that, but, you want to have started that, But if you're planning to start a plan for the next year, there's going to be notifications. There's going to be a process of getting that up and running. So I start thinking about that. Now, if you haven't already. or maybe you're planning on replacing a simple IRA plan for, in 2024 with a 401k plan. Maybe you've maxed out the simple IRA you've realized that. you've sort of hit the end of the road for what you can do with it. Fortunately, starting in 2024, thanks to the recent Secure Act 2.0. You can now replace a simple IRA plan with a 401k plan at any point in the year. a safe Harbor 401k plan at any point in the year. before you would have had to wait until the next calendar year, right? You couldn't do that. Mid-year now that's changed starting in 2024, but, start to think about that there's notification deadlines that you have to keep in mind. So get that process started and, and start to talk to the professionals that that should be in your corner as you're, as you're going through that. Other than that, I'm starting to plan for other contributions that can be made, not necessarily by the end of this year, the calendar year, but by the next tax filing deadline. So that's your IRA contributions. you're potentially a Roth IRA contributions, or if your income's too high. the backdoor Roth, IRA contributions may be HSA contribution. So just start to think about, have you hit the max for that? Are you going to need to make an additional amount or are you doing a lump sum before tax time? Do you have the cash for that? So start to plan those out as well. I will add that if you ha, if you are planning to do the backdoor Roth IRA contribution, which is a contribution to a traditional IRA, first that's non that's non-deductible and then it conversion of those dollars to a Roth IRA. There's two steps to that. If you are planning to do the backdoor contribution. Just keep in mind that in the year you do the conversion. You can't have any pre-tax IRA dollars anywhere else, even in a simple IRA plan, the simple IRA dollars will mess this up too. So if you're going to do it. There needs to be zero pre-tax IRA dollars across the board by the end of the calendar year that you do the conversion. So if you're doing the conversion this year in 2023, then you need to make sure that zero, if you're going to be doing the contribution side of that this year, But the conversion in January. Well, then you have until next December to clear the decks, so to speak. And a lot of times you'll see people talk about well you can move Traditional IRA dollars, the pre-tax portion of that into a 401k to sort of clear the decks. That's definitely something to consider. if you're going to do that with a simple IRA, just keep in mind. There's a two year rule for those simple IRA rollovers. that is if you roll a simple IRA account into anything, but another simple IRA account. Within two years before two years. Of having the account opened and funded. There's additional penalties that you're going to have to pay. So make sure you've cleared the two year mark, before doing that, but, just something to consider as you're planning for those extra contributions to other accounts. Next thing we'll talk about is just employee benefit related items. So by now, if you are an employee or even if you own your practice, And your participating in different benefits there. You probably have gone through open enrollment or are going through open enrollment at this point, you're making decisions around. health insurance plans, which health insurance plans are right for your family, around dependent care or medical FSA benefits. So you're, you're making these decisions on. The next 12 months of benefits and which ones are right and wrong for you. as you do that. one thing to keep in mind for this year is FSA benefits, right? Make sure that if you're going to be losing FSA dollars, flexible spending account dollars. at the end of this calendar year, make sure that you're using them for dependent care costs for healthcare costs. some plans allow you to roll over. I think up to$600 for the healthcare FSA this year, but just keep an eye on what FSA dollars you're expecting to lose after 1231 and make sure you're making sure that those are spent appropriately for what they're allocated for. Next things we'll talk about are tax related things to consider, right? There are many tax specific items that have to be done. by the end of this calendar year, not all. but many of them will be some of the bigger ones are going to need to be done before the end of the calendar tax year to take advantage of them for 2023 taxes. So. Again, hopefully by now you've talked to your financial advisor or planner, or you've talked to and and your planner has talked to your tax professional. You started to have conversations already. about your tax year and somethings to think about. Especially if you're owning a practice you want to make sure that these conversations are had proactively. And so what are some things on the tax side you should consider as you're having those conversations. Well, first thing is Roth conversions. And what a Roth conversion is, is you are transferring pre-tax dollars from a pretax retirement account. Directly into a Roth retirement account. So most often you'll see the Traditional IRA. you'll make a transfer or conversion from a Traditional IRA. Over to a Roth IRA. And for every dollar you convert that is considered taxable income in the year that you do it. However, the benefit is that the dollars grow tax-free in the Roth IRA, which allows for tax free dollars in retirement. And so you're hoping when you're doing this conversion, you are hoping that you are converting at a more favorable tax rate than otherwise, would it be withdrawn at down the road? And most likely for the listener, you're not in retirement, right? So this isn't a retirement tax planning conversation per se. But if you find yourself in an unusually, a low tax rate environment right now with your personal, your personal finances. So maybe you are just starting out your career, maybe you are. cold, starting a practice. You've seen your income fall quite a bit relative to where it would be in the future or relatively to, to where it was in the past. Well, that might be an advantageous year tax year to do something like a Roth conversion to take advantage of these relatively low tax rates. And, and convert those dollars. And allow them to grow tax-free into the future. but since you're creating more income there, just keep in mind for how it might impact other things like income driven repayment plans For your student debt, if you're going for forgiveness and things like that. But Roth conversions, if you're in an unusually, or advantageous and advantageous, low income tax here, that might be something to consider. Charitable donations. I just replayed a podcast episode specific around end of year charitable donation planning. So. listen to that. I'll throw that into the show notes again, but, consider completing donations to charities before the end of the year. Especially for able to do things like bunched up a bunch of years or a relatively high amounts of donations into one tax year. so consider doing that before the end of the year, whether it's using cash or, appreciated investments in a brokerage account, something like that. Take another, listen to that podcast. Talk about that with your professionals. Activities in a taxable investment account. So if you have a non-retirement account or a taxable brokerage account, here are some things to consider, and this is something I did a podcast replay about as well. I'll throw a link to that in the show notes as well, with more information, but just sort of generally speaking, here's some, some high level stuff to think about. Number one is consider tax loss, harvesting, or at least talking with your professionals about that. If they haven't already. What that is, is that in a taxable brokerage account? If you have an investment, that's at a loss at a meaningful loss, right? Not a few dollars, but something that's meaningful. What you can do is sell that investment at a loss. And then. Basically immediately, as soon as you can reinvest those dollars into a really similar, but not identical, not substantially identical investment. And what that allows you to do is that allows you to book that loss for tax purposes. And still keeps you invested because you reinvested those dollars into a similar, but not substantially identical investment. And the benefit of booking those losses for tax purposes is that, you can use up to$3,000 of losses. So if you have, at least$3,000 left after the end of the tax year, you can use up to$3,000 of those capital losses to offset. your other regular income, like wages and different things like that. So you're able to get a deduction to offset your other income. at all of your ordinary tax rates. the other benefit is that those losses can offset other gains that you've created from other decisions, maybe you've sold an investment that you didn't want to keep. And you had to realize some gains to do that while those losses can offset the tax impact of reinvesting those dollars. More appropriately based on however you're investing in. or maybe you've had to raise dollars for taxes. So you've had to sell one of your investments to raise dollars for a tax payment or. or reinvest into the practice. So we use for a down payment on a commercial property, or a, maybe you've sold a commercial property or rental property or something like that. So those losses can offset. those other gains that you're creating. And any gains that are unused above and beyond that 3000 can be carried forward into the next tax year. So I just explained how that works in a really high level. generalized way. There are a lot of things to consider and do rights to make sure you're doing this correctly and not cause issues with it. You have to buy the right type of investments. You can't buy the same investment in other accounts, even our retirement accounts. So there's, there's ways to do this appropriately. And it doesn't always, frankly, it just doesn't always make sense. Right. Sometimes it's just trading for trading and doesn't always have a real meaningful impact there. So, that's something to consider though. The other thing to consider is harvesting gains. Maybe you are in again, one of those Really low taxable income ears, and you have a low enough taxable income that capital gains. May be taxed at 0%. in that case, you might want to consider selling things that are at a gain up to a point that you'll see 0% taxation on that. And that's just another thing where you're really thinking about, can I, can I force more income on my tax return at a more favorable tax rate than otherwise would have been taxed at some other point, right? That's sort of. it's sort of like strategically creating more, more taxable income there. Other things think about in a taxable brokerage account specifically are a trading decisions buying and selling. When you're buying mutual funds or ETFs. be careful as you're doing that, in December mid, mid to late December or so. Be careful about buying those just before the record date for a dividend or distribution. we're almost at that time of year, mid to late December where those funds will distribute both capital gains, especially for mutual funds and or dividends. And if you buy those funds, just before that record date, where you're going to be on record as, as an owner of that fund, and you'll be eligible to receive that. you'll be getting those distributions. You'll be adding that taxable income to your, your tax return, but you haven't benefited from owning the fund all year long, as a part of creating those capital gains. So. You want to be careful? We call that buying the dividend, right? You want to watch out for buying those investments, right? As you're about to hit that record date and be on record for those distributions. you might as well just wait a little bit, a few days or so. maybe if it's only a few days and in wait until the trades after the dividend or the ex-dividend date right. But if it's, you know, this we're like a full month before that time. Well, maybe that's a little bit different because you, you may benefit from the increase in, in return versus the, the tax that you'll pay on the distribution. So. just be careful about doing that, like right as you're you're getting to that point. In terms of selling something to watch out for this year, as you're selling investments in that taxable brokerage account. watch out for selling things at a gain right before you've owned it for longer than a year. Right. So let's say you have a mutual fund that you want to sell all of in order to create dollars for something by the end of the year. And you've owned that mutual fund for, 11 months and 29 days, something like that. Right. So just under a year. And you decide to sell it today. Well, if you do that gain will be considered a short-term capital gain. Because you've held it for exactly a year or less. And the capital gain will be taxed at the same tax rates as all of your other income. Whereas, if you waited to sell it after you've owned it for at least a day after a year or more, right. So longer than a year, it then becomes a longterm capital gain. And long-term capital gains have more favorable tax rates either at 0%, 15%. 20% or maybe 23.8%. if you have something that you've, if you have something that you've owned for just under a year, and you don't necessarily need to create the cash right now. or if you're going to reinvest it and you don't need to do the reinvest into something else. Right this moment. You might want to consider waiting until you've owned it for over a year, right over a year. So that it gets a longterm capital gains treatment. So keeping on your selling decisions towards the end of the year. another thing on the selling side is to watch out for the accounting method for trades. And maybe this is a little bit more in the weeds, but something I would look at as an advisor for a client is to watch out for the accounting method that's being used for the things that you're selling. So, for example, if you're selling like mutual funds or ETFs, How is it accounting for the cost basis and the gain? Is it using the average cost over all of the different shares that you've purchased, of the same mutual fund? Like an example of where that comes into it is maybe you've purchased it once and then you've done so like a little bit over the years, or maybe you've had dividends reinvesting. So each dividend is buying like a new a new set of shares each of those with a different cost basis and a different amount of gain. So you might have all of these different chunks of shares. Is it accounting for the cost basis, using the average across all of them, is it individual shares or lots? Can you pick and choose which shares to sell from and only realize those specific gains for that set of shares or those shares. So take a look at how it's accounting for the cost basis and accounting for the gain. For what you're selling before you're selling it. That'll give you a more accurate reading of what it's going to create in terms of capital gains and thus taxation at the end of the year. So those are some tax things to think about for, for any optometrists, right? Whether you're employed, whether you're a practice owner. there's some things to think about specific to practice owners and. This is not an exciting one, but just bookkeeping. Just make sure that your bookkeeping is being reviewed by you regularly. It's being reconciled each and every month. Right? So not just going into QuickBooks and looking at the categories and making sure that you're going into each account. You're each bank account Each credit card account. So going into QuickBooks, going into your chart of accounts and going into each account and reconciling them each and every month. That is, if you don't already have a good bookkeeper doing that for you which I highly recommend. But you want to make sure you're reconciling every month so that what matches the bank statements or the account statements matches what's in QuickBooks. And you know that what you're looking at on the financial statements, the profit and loss. the balance sheet are accurate, right? It's accurate information. You haven't missed anything. Nothing's miscategorized, there's no extra income being shown, double counted. There's no expenses that are missing things like that. So making sure that your bookkeeping has been regularly reconciled and updated throughout the year. If your practice is taxed as an S corporation. please talk with your professional team in review your wage. To make sure that what you're paying yourself as a wage, as an owner's wage is reasonable. as you should probably know, As an S-corp owner. that is as an owner of a business, that's taxed as an S corporation. You have a requirement to pay yourself a wage that's quote, unquote, reasonable, right? And you can, you're going to read all the different, factors that the IRS says you should consider. Ultimately, if you had to hire someone else to do your exact work with similar experience for the amount of time you're doing it in the week. What would you pay them? And makes sure that it's reasonable, right. I've seen a lot of, Less than a reason. I'll just say less than a reasonable wages in Optometry S corporations in efforts to save taxes. But. but that's, that's something you really need to make sure that you are in compliance with. And the other thing I would consider there is as you're setting that reasonable wage, as you're talking with your professional team, Make sure that you're weighing all of the different trade-offs with the wage. Right? So the biggest one is you have a really big current year tax. incentive to keep that wage as low as reasonable, you know, as low as at the low end of that reasonable range. And some things to consider on the other side of that is that. The lower you keep your wage. Yes, you save on social security and Medicare taxes, but you're also losing out on credit toward social security. So if your wage isn't high enough to at least optimize that social security benefit and optimize that formula, you're just simply missing out. And unless you are, I mean, legitimately taking every tax dollar saved and reinvesting it to create your own future pension, so to speak, to offset what you're losing. You're simply losing out on social security benefit. You. So I've seen recently some cases where practice owners to pay themselves. I, what I would say is less than reasonable, but, but definitely too low and never did the investing side of that on the other side to make up for that. So not only were they unprepared in terms of the amount of assets they've had. But they didn't have the social security benefit to back that up, because their income was too low. They, their wage was too low. Over the years. So, and the other thing that comes into that is that if you have a 401k and you're making contributions and you're doing profit sharing contributions, Your wage ties into all of that as well. So, So keep in mind the other factors that need to be factored in from a reasonable wage standpoint. if you need to reimburse yourself for practice expenses paid personally, meaning the, the, you're an S corp owner, and you've been, you need to reimburse yourself as an employee for the expenses that you've paid personally. payed for personally on behalf of the practice. Make sure that you have an accountable plan that's documented, which is just a fancy way of saying a compliant reimbursement plan. Right? So talk to your tax pro about what that is. If you don't have an accountable plan. I already in your S-corporation and you need it. Other things to think about with your professional team is that, should you take actions within the practice that also impact taxes? Should you buy an install, new equipment? I guess we can just rename that should you reinvest into your practice and how? One of the most common ways and one of the most common. conversations I hear is should you buy equipment in your practice? Maybe you're looking at your tax projection saying, man, how can I lower this? Well, a lot of the times the conversation goes to, oh, I need a new OCT or optos, or I can do this or that right. Can buy a, I can buy this or that new equipment. And, you know, you've gone through vision expo this year. You're getting all the end of year emails right now from the vendors. Hey, this is, section 1 79 deal. You need to do this before the end of the year. that's something to consider. But only do that. If you have a true business purpose for the equipment or whatever the investment is, Right. Only by the equipment. If you have a business purpose for it, you know, you're going to get a return on it. And you've created a plan for yourself on how you're going to implement and market it. Because what you don't want to do is buy the equipment or really anything just for the tax benefit. Because what you're doing is you're spending$1. So that you can get back. 30 or 40 cents. Right. That that doesn't necessarily make sense. You're just wasting the 60 or 70 cents that, that you've spent. You've had to spend the full amount. and all you're getting is 30 to 40% of that. It doesn't actually make sense. So these are decisions. These reinvestment decisions into your practice. you want to make them with taxes in mind? I would say last, the first thing is, does your business need it? Right? Like, what is your, your business planning require? What does that next step that you want to reinvest? how will you implement it? How will you pay for it? Is it going to be cash? Is it going to be credit or, or by lending? And then lastly, what is the tax consequence? And the tax benefits of buying things like equipment in the practice is that, for equipment you can either. Depreciate that, which is a, a deductible tax deductible expense. Over a five-year period or other some other year schedule, depending on the type of, of property. It is. Or you can accelerate that depreciation into the current year that you bought and put it into service. So that means you would have had to buy it, had it shipped and had it installed then ready to use with patients. before the end of the tax year. So. You can either accelerate all or much of it into the current tax year that you buy and put it in use. or you can depreciate it over, over several years. And there are reasons you might want to do both, but. That's something to consider. That's a business, a reinvestment, but also has a big tax benefit. talk with your professional team. If you're already planning to do that, talk with your professional team about how to take the best advantage of that. from a tax perspective, or if you're thinking about doing that like early next year, like maybe you accelerate that purchase and use of it into this, this tax year. So reinvestments into the practice or somethings to consider, reviewing your estimated tax payments, right? You have a, another quarter fourth quarter estimated tax payment. Coming up in January. Make sure that your, your total of withholdings and estimated tax payments are on track. Deciding whether to pay your spouse, your kids through payroll, right? There's there's many considerations on what to do with that. Are you close to phase out limits for the qualified business income deduction? Meaning is your, is your taxable income getting too high? before that deduction to where you start to either phase out of it, meaning you, you get to use less and less of that deduction or you lose it altogether. is there any planning considerations with that? Right. So talk with your professional team about business planning opportunities or phase out limits that you're getting close to, as we get towards the end of the year, and there's. the other things to consider are real estate specific, and I'm not going to get too much into this because there's. There's quite a bit, and we don't have the time in this episode to get to it. But, you know, if you've purchased a property this year or within the last couple of years, should you be completing a cost segregation study on, on that commercial property or on that investment real estate to. Eh, to accelerate some of that depreciation into the current year versus the regular 27 and a half or 39 year depreciation schedule. If you have like short-term rentals and you're trying to use the short-term rental tax benefits of owning those types of properties, are your rental days, under the appropriate averages or are you keeping track of your time managing the properties as needed to, in order to benefit from whatever tax benefit you're trying to benefit from? for your, your rental properties. So making sure you're keeping the appropriate records in terms of time spent working on the properties in terms of, your, your rental days versus their personal use days, different things like that. And keep in touch with your professional team on that. And then lastly, think about next year. What are your business goals for next year? What are your personal income goals next year? what would you like to spend in terms of lifestyle goals next year? Where do you want to vacation? How much do you want to save in the next year? Is that built into your business goal? Right? Is that a part of it is that it's sort of a profit and salary goal. As a part of your business call start thinking about the next year's business goals and in what you want to change and implement and all that fun stuff that comes with that. this is a perfect time for that as we get towards the end of the year. Keep in mind, the Corporate Transparency Act, which is a new federal reporting requirement for owners of entities of business entities, LLCs, corporations, which is practice owners, independent contractors that have an LLC established. People that own LLC for real estate investments, you're all going to be impacted by the corporate transparency act starting in 2024. Do you have any big purchases coming up or expenses coming up over the next year? Do you have enough liquidity or cash set aside for that? Are you prepared for that? Review the 2024 contribution numbers and tax numbers of the newly adjusted contribution numbers for in limits for your retirement accounts at. HSA accounts different things like that are available now for 2024 tax year. So I'll throw a link to those in the show notes as well. So make sure that you've looked at the next year's contributions. And so starting in January, you're able to make those adjustments for the next calendar year. And just start to think about your own financial planning goals. What, what do you have on the horizon for, for the next year for your family goals, vacation goals, lifestyle goals, career goals. what are the different tasks that you've been putting off into the next year, purchasing appropriate insurance coverages or needing to review those right. Start to think about those other financial planning tasks that. Maybe you've been Putting off in 2023. But you've wanted to revisit as you have time in 2024. Reviewing your estate plan, getting an estate plan, things like that. Start to look at the next calendar year and start to make those goals and different things that you want to prepare for implant for as we wrap this year up. Hopefully I've given you plenty to think about as we get towards the end of this tax year, the end of this calendar year. from a student loan standpoint, from a retirement contribution standpoint, from a business standpoint. There's there's a lot to think about and a lot to do. And you don't have to do it alone. our firm is here for you serving only optometrists all over the country helping you to navigate all of these really important financial planning, considerations, and questions. Talk with your professional team. Talk with your tax professionals. Talk with your bookkeepers. Talk with your insurance agents. Just keep in touch with these. With these professionals in your life and lean on them to help you make sure that you're taking all of the actions that you need to as the year comes to a close and as we get started in 2024. So with that really appreciate your time. I'm looking forward to talking with you next time in the next episode. Let me know if you have questions, you can reach me at Evon evo N at Optometry Wealth dot com. You can head over to my website, Optometry Wealth dot com to check out all of the resources and show notes that I mentioned here in this podcast, you can also check out all of the other content articles, podcasts, episodes we've done there as well. And while you're there, feel free to schedule a no commitment introductory call, and we can get that relationship and planning started. as the 20, 24 years starts. So reach out if you have any questions or just want to get started somewhere and we'll catch you on the next episode. In the meantime, take care.