Planning for a Bigger Tax Bite
By Jessica Tremayne 

Summer has a way of making the stress of last tax season seem like nothing more than a bad dream, not to be relived for many months. But it’s no time to slack off. Rate increases scheduled for the 2011 tax year will affect practice owners, which means acting now to make the most out of the 2010 season.
Small-business owners can expect to see a tax hike of $11 billion over the next 10 years, says Mark McGaunn, CPA/PFS, CFP, the managing member of the accounting firm McGaunn & Schwadron of Needham Heights, Mass. 
Rate and tax law changes will be substantial enough to be noticeable, he says.
If a veterinarian’s practice generates a $156,800 profit and she withdraws $106,800 via payroll as salary and pays the remaining $50,000 in profit as a distribution of the profits from the S Corporation, a new law will assess an additional 15.3 percent self-employment tax on that distribution. That’s an extra $7,650 going to the government in 2010. 
“The tax increase was included in the American Jobs and Closing Tax Loopholes Act of 2010, a mix of extensions of expired tax breaks, spending and physicians’ reimbursement formulas,” McGaunn says. “The Democratic-based Senate version of the bill includes the same tax on small business, leading most to believe there won’t be much of a change.”
For the rest of the article click here: Veterinary Practice News: Planning for a Bigger Tax Bite