The medical profession’s accounting and taxation aspect is governed by a set of rules that are a bit different from those governing other fields. Usually, doctors with their own medical establishments hire a practice accountant to handle not only their business’ finances, but also their personal ones. This may work fine at times, but might backfire a bit in the long run.
Finance expert Chuck Jaffe notes the risk that most doctors take in doing just that. “The fact that someone is great with your business doesn’t mean he’ll be great with buying a second home or going through a divorce or advising on your spouse’s personal tax issues”, he says. A true professional is bound to know his limitations, and will almost instantly refer a colleague who can handle it better than he does.
Taxes are a huge part of medical accounting, and it is the accountant’s job to effectively manage it. Jaffe notes that for doctors, it is important to know that whoever’s doing their personal taxes are knowledgeable about special considerations like tax-advantaged retirement plans and other savings strategies, not to mention that the accountant’s personality should reflect their client’s overall philosophy as well.
The accountant should charge a fair amount for his services on personal tax advising, ensure that proper tax rulings are considered in every process, and formulate new strategies based on changing legislation. In other words, he should be updated with the latest trends and practices in the world of medical accounting and finance.