Emergencies or Just Poor Work Habits?

Doris K. Reynolds-Johnson, CPA, MBA, Senior Health Care Consultant 

Question:  Patients are always complaining that they wait too long to see the doctors.  My front desk personnel are stressed out from the nasty comments and glares from waiting patients.  What can the staff or I do to address this? 

Answer:  If a doctor (or doctors) in your practice consistently runs late and there is no legitimate reason for it, then the staff is stuck making excuses.  Rarely will a patient express their anger or frustration to the doctor.  The staff is always the easiest target. 

Are there legitimate reasons for the delay?  A true medical emergency, such as a life-saving surgery, or a personal emergency for the doctor, or even a last-minute meeting at the hospital are some legitimate reasons.  Medical emergencies will occur depending upon the type of medical practice.  And, medical emergencies should be expected periodically.   

However, if the doctor is chronically late because they accept personal (non-emergency) calls during patient hours; allow walk-in vendor visits; tend to dawdle in the morning and pick up the pace in the afternoon; or complete yesterday’s charts while patients are waiting to be seen today. . . .  these are not emergencies.  These are simply poor work habits.  What can be done?  Read more

Charitable Contributions - The Win-Win-Win Situation

Erin E. Prest, CPA/PFS, Tax Supervisor

Many philanthropists give simply to improve the welfare of others.  I’m inspired each day by co-workers, friends and family who are dedicated to supporting numerous charities.  Generosity is a great feeling. 

But as a tax professional, I have to remind you about the added benefit of a tax deduction for donations of money or property.  If you itemize, you can save up to 40 cents for each dollar of donations combined from your federal and state returns, depending on your tax bracket.   Remember to save your receipts and cancelled checks.  Give a Little. Decrease Your 2009 Taxes.

Need even more incentive for your altruism?  State tax credits are sometimes a lesser known source of tax benefits for charitable contributions.  Missouri and several other states grant tax credits to certain charities who apply with specific programs each year.  These credits are equal to 50% or 70% of the total contribution.  Credits are even better than deductions because they reduce the tax you owed dollar for dollar.  Giving $1,000 to charity eligible for 50% credits can give you a $500 credit that counts as a payment towards your tax liability, just like withholding or estimated payments.  As a bonus, you’ll still get the normal deduction, as well, if you itemize.  

Each charity is granted a limited amount of credits for the year.  You can find lists of the eligible charities on the Department of Economic Development’s website for the Youth Opportunity Program or the Neighborhood Assistance Program.

If you want to take advantage of the credit, it’s best to check with the charity first to make sure credits are still available.  They can also provide you with the form to claim your credit with Missouri.  Giving can be so rewarding!

Key Performance Indicators Measure Success

Brian Meyers, CPA 

Many physician practices I work with want to know how to evaluate the practice’s performance.  One way is to use key performance indicators (KPIs). 

KPIs are those benchmarks or statistics that are the most important ones for management to monitor.  While you can adopt KPIs for every facet of your healthcare operation, let’s focus on accounts receivable indicators. Every organization will not have the same KPIs.  This is due to the fact that management of one practice may want to know one thing while another practice wants to track something else.  For A/R purposes, though, the indicators tracked should be pretty similar.  For example, most organizations track: 

• Days Receivable Outstanding (DRO)
• DRO > 90 days
• DRO < 30 days
• Net Collection Ratio
• Bad Debt as % of Total Charges 

In addition, many practices track lag days between date of service and date of charge entry, gross collection percentage, and rejection/denials by payer. 

Creating a dashboard to track and monitor your practice’s chosen KPIs can provide a wealth of information.  Many of these KPIs can be tracked on a year-to-date or rolling six month basis, each of which will provide your practice with different information.  A dashboard is a great way to view the data in a quick and easy to follow format - something that doctors can glance at and understand what’s happening with the practice.  Also, dashboards can provide a quick signal when something may need attention. 

The great thing is that you get to decide what is important to your organization.  Then decide what an acceptable performance level is.  Finally, track your results against your own historical results as well as the results of other similar-sized practices, assuming this information is available.  Look through the data you have available - there is always something you can track and learn from!

You Can Work and Earn Social Security, But. . . . .

Kristie S. Galati, Accounting Services Manager 

You can continue to earn income while receiving full social security retirement benefits, provided your earnings do not exceed certain limitations.  The 2010 yearly earnings ceiling for individuals who have not reached full retirement age will remain at $14,160.00 in 2010. Benefits of $1.00 will be lost for every $2.00 earned in excess of the 2010 ceiling.  

For recipients who reach full retirement age in 2010, the earnings limit is $37,680.00 until the month the individual reaches full retirement age.  Benefits of $1.00 will be lost for every $3.00 earned in excess of the 2010 ceiling.  Once you reach full retirement age, you can collect full benefits, regardless of the amount of your earnings.

What You Need to Know About Key 2010 Tax Changes (3 of 3)

Michael J. Evans, CPA, Director of Tax Services

Over the past few days, we talked about new tax laws and those that are expiring in 2010. But what about those tax advantages that expired at the end of 2009?  You will want to take particular note of these and watch to see if they return before December 31, 2010. 

Expired in 2009 

•  Sales taxes paid on new vehicle purchases:  If you purchased a new car after Feb. 17, 2009, and before Jan. 1, 2010, the sales tax paid on up to $49,500 of the purchase price was deductible. The deduction phases out for higher income taxpayers.
• Increased AMT exemption amounts: For 2009, the AMT exemption amounts were $70,950 for married filing jointly, $35,475 for married filing separately, and $46,700 for singles and heads of household. For 2010, the exemption amounts are significantly lower (unless Congress acts to adjust them): $45,000 for married filing jointly, $22,500 for married filing separately, and $33,750 for singles and heads of households.
• Waiver of required minimum distributions (RMDs) for IRAs and other retirement savings plans: When a taxpayer turns 70¹/₂, he or she is required to take a distribution from his or her retirement account. However, for 2009, that rule was eliminated. Beginning in 2010, the RMD rule returns. Read more
  

What You Need to Know About Key 2010 Tax Changes (2 of 3)

Michael J. Evans, CPA, Director of Tax Services

Yesterday we urged you to be thinking about tax ramifications in 2010 and how the new tax laws may affect you.  Today we take a look at the tax laws expiring this year.  If you’ve taken advantage of some of these in the past, you will want to pay close attention to see whether or not these get extended sometime during 2010. 

Expiring in 2010

• Education credit: The American Opportunity Credit replaced the Hope Education Credit for 2009 and 2010 only. The benefits of the new credit are:
• required course materials, such as books qualify
• the credit is increased to up to $2,500
• income level phase-outs are higher
• 40% of the credit is refundable.
• Nonbusiness energy property credit: A 30% credit (up to $1,500, less if any credit was taken in 2009) is available if you make certain energy efficient improvements to your home. Such improvements include high-efficiency heating and air conditioning systems, water heaters, windows, skylights, doors, insulation and roofs. The improvements must be made to an existing principal residence. A manufacturer’s certificate must accompany the qualifying property. Read more
  

What You Need to Know About Key 2010 Tax Changes (1 of 3)

Michael J. Evans, CPA, Director of Tax Services

Your 2009 tax return is probably getting to the top of your “to do” list and while you must get your return prepared and submitted to the IRS, right now is a good time to start thinking about 2010. This year, there are new tax provisions, others, which were set to expire, have been extended and yet others have disappeared. Over the course of these next several days, we will outline the major tax law changes you should be aware of to minimize taxes. Of course, please be aware that some of these changes could be altered again by Congress before the year is through.

New for 2010

• No estate tax:  Although it is widely believed that Congress will enact legislation to address this, decedents dying after 2009, the estate tax is repealed. With this repeal, the stepped-up basis at-death transfer rule is also eliminated. However, this rule is alleviated somewhat with special elective step-up rules.
• Roth IRA conversions: Regardless of income, taxpayers can convert traditional IRA accounts to Roth IRA accounts. Previously, taxpayers with modified adjusted gross income over $100,000 could not make the conversion. Also, married persons filing separate returns are now eligible to make the conversion. Note that the converted amounts are includible in income; however, for conversions taking place in 2010, a taxpayer can ratably include the amount over two years in 2011 and 2012, if they so choose.
• Recapture of first-time homebuyer credit: For first-time homebuyers who purchased a principal residence before Jan. 1, 2009, and took the then-$7,500 credit, 2010 marks the first year of recapture, in what amounts to a $500 repayment. 
• Phase outs of itemized deductions and personal exemptions: The overall limitation on itemized deductions for taxpayers with AGIs above a threshold amount does not apply. The phase-out for personal exemptions for higher income taxpayers also does not apply.

Watch this blog tomorrow when we discuss the tax laws which are expiring in 2010.

The When, Where and Who About W-4s

Kristie S. Galati, Accounting Services Manager

Deadlines are looming.  Where do I get the right forms? 

Form W-4

A Form W-4 on which an employee claims exemption from withholding legally expires February 15 of the year after it is filed.  Remind employees who claimed exemption from withholding on their 2009 Form W-4 the exemption expires and they will need to file a new 2010 Form W-4 on or before February 15, 2010.  The 2010 forms are available at http://www.irs.ustreas.gov.  Forms W-4 must be available for inspection by an IRS employee if requested.  Employers may receive requests from the IRS requiring submission of a copy of Form W-4 for one or more employees.

Missouri Form W-4

Form MO W-4 allows employees to claim the same allowances as on the Federal Form W-4. Employees should review the Form MO W-4 to ensure correct withholdings.  The employer must send a copy of Form MO W-4 to the Department of Revenue within 20 days after any NEW employee completes the form.  This information is being used to enforce the state’s child support laws.  The 2010 Forms are available at http://dor.mo.gov/tax/business/withhold/forms/ . 

Need more information?  Contact your Tax Advisor.

The Standard Mileage Reimbursement Rate Down in 2010

Kristie S. Galati, Accounting Services Manager 

If you use your own car for business purposes, you can get reimbursed. Over the last few years, the reimbursement rate has been up and down, based on the price of gasoline. 

The standard mileage rate for 2010 will be 50 cents per mile, that’s down 5 cents per mile from 2009.  This rate is for all business miles.  The 2010 rate for medical travel and moving costs will be 16.5 cents per mile.  The charitable mileage rate will remain at 14 cents per mile. 

In order to be reimbursement, be sure to keep comprehensive records of your business vs. personal miles. 

Need more information.  Contact your tax advisor.

The Who, What, When, Where, Why, and How of Cost Segregation Studies

Adam S. Prest, CPA

I had a college professor who always said, “To be a good accountant, you need to understand the tax code.  To be a great accountant, you need to think like a journalist”.  In other words, a successful accountant needs to both understand the tax law and be able to communicate this information to his or her clients.  

In keeping with this theme, I have broken down the topic of Cost Segregation Studies to its primary journalistic components.   

WHAT?  A cost segregation study is an IRS approved approach that allows a taxpayer to identify, segregate, and reclassify assets that are currently classified as real property to shorter depreciable lives for federal and state income tax purposes.  

WHY?  The primary benefit of performing a cost segregation study is an immediate increase in cash flow due to reductions in federal and state tax liabilities achieved from accelerated depreciation. 

HOW?  Due to the complexities of cost segregation studies, the IRS mandates that the study be performed by professionals from both the engineering and accounting disciplines. 

WHO?  Cost segregation studies are most commonly utilized during new construction, renovations, or acquisitions.  In most situations, buildings constructed or purchased since 1994 have the best potential for tax savings. 

WHEN?  The best time to begin a cost segregation study is when plans are drafted to purchase, build, remodel, or expand a building.  If possible, the study should be completed in the year when the building is placed in service.  However, cost segregation studies can be performed on properties that have been placed in service in prior years.    

WHERE?  For more information on this topic, please feel free to e-mail me at aprest@amdcpa.com or check out AMD’s website at www.amdcpa.com.