The increasing complexities in medical practice administration are very much larger obstacles for small practices. The new tax bill will help some of these practices, but to suggest that it will create a paradigm shift for these physicians is an overstatement. —Eugene Brown, MD
In addition, some of the deductions that privately owned businesses could previously deduct have been restricted or the amounts of allowed deductions reduced under the new law, said Nadim Bikhazi, MD, an otolaryngologist at the Ogden Clinic in Utah. “From my understanding, the new tax law did not favor professionals but rather favored other types of services such as architects,” he said. Otolaryngologists in an S-Corp [or other pass through entity] have been hurt to some extent by some of the restrictions because of the changes in these deductions, he added.
One area of ambiguity is how ancillary sources of revenue that generate passive income for otolaryngology practices will be considered under the law. According to Dr. Bikhazi, practitioners who rely on passive income sources, such as those arising from CT scans or surgical centers, are looking for other ways to maximize tax deductions from these sources of revenue because they will be more restricted under the new law.