Are You a Medical Resident? What Tax Reform Means to You!

Are You a Medical Resident? Here’s What Tax Reform Means to You!


Of course everyone’s personal situation and individual circumstances are different, but in general tax reform will affect us all, including medical residents. Here’s what to expect in a nutshell, good and bad:
1.    Lower Brackets: Tax brackets are now 10%, 12%, and 22%, respectively. The marginal tax rate for most residents will decline by 3%. When things change in 2025 – you won’t be a resident anymore.

2.    Higher Standard Deduction & Repeal of Personal Exemption: The personal exemption was repealed but the standard deduction was almost doubled to $12,000 for single taxpayers, and to $24,000 if you are married. The single resident taxpayers win here.

3.    Increased Child Tax Credit: This tax credit is now $2,000 per child. For married couples this may negate any tax increase as a result of the elimination of the personal exemption.

Changes to state and local taxes, property tax, mortgage interest deductions, estate tax, or the Alternative Minimum Tax are not likely to affect you, as most medical residents will take the $12,000 standard deduction.
 
Medical school graduates make a median $54,600 in their first year of residency, according to the Association of American Medical Colleges, and a full 75% of the graduates in the Class of 2017 held an average $190,694 in total student loan debt. So the student loan interest deduction remains at $2500 a year, and the moving expense deduction has been eliminated, but still most residents should come out ahead. Use your tax savings to pay off loans, start an emergency fund or retirement account.

CONTACT US: Of course this is the IRS we are talking about – exemptions and exceptions are to be expected. Every case scenario is different, but there is plenty you can do today to plan for tomorrow. Your Fuoco Group healthcare professional has the perfect prescription for a financially healthy future. Whether your residency is in Florida, or the greater New York, Long Island, or Westchester areas, call us at 855-534-2727 today.

 

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Fuoco Group would like to share the exciting news that we have just opened a satellite office in the Fort Lauderdale area to better serve our Broward County clients and expand our footprint in the Fort Lauderdale/Miami area.
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