Corporate Employment Structure: A Way for Doctors to Reduce Income Taxes and Save Thousands…

July 14, 2011 by · Leave a Comment 

By Adil Daudi, Esq.

Whether you are a physician with a wealth of experience, or a new resident paying your dues, establishing and incorporating a structure to help lessen your income taxes is a concept widely accepted and beneficial to all. If you are currently employed within a Medical Office that also employs additional physicians, chances are you are not being given the opportunity to reduce your income taxes to the optimum level, meaning you are losing out on the opportunity to save hundreds, if not thousands of dollars in income taxes.

This concept, which is commonly referred to as the “Corporate Employment Structure,” (“CES”) is a concept that is not being utilized by many physicians, and that is partly because of the unfamiliarity with the topic. In this newsletter, physicians will learn the benefits of a CES and how it can be implemented as their current method of agreement.

What is the Corporate Employment Structure?

The CES is a very simple concept that requires limited additional documents to set up, but saves you thousands of dollars.

Under your current structure where your employment agreement is between your Medical Company (MC) and yourself, individually, the MC provides you with a W-2 salary, which you receive and deposit into your account. Therefore, if you decide you would like to implement a plan that helps reduce your income, your only option would be to seek approval from your MC. By seeking MC’s approval you will more or less be given the response you expect – “No”

The CES will help avoid you encountering such a problem, because under the CES, your company would be the one to implement your income reduction plans. Under the CES, you would be required to create a new Professional Corporation (PC) or a Professional Limited Liability Company (PLLC) for the purpose of having it employed by your MC. The CES is where your current employment agreement with your MC would convert your personal name with your PC.

Therefore, instead of your MC providing you personally with an income, your MC would instead provide it to your PC, who would in turn write a check out to you.

Once your PC receives the money, you have the authority and control, as the owner, of deciding when and how that money will be used. The special benefit received through the CES is that it gives you the ability to write-off various expenses that would otherwise not be allowed.

These expenses can vary depending on how you have your PC structured. Nevertheless, some of the more common expenditures that are typically considered written-off are: cell phones, mileage, food, or possibly vehicle lease payments. Moreover, you will have the flexibility of writing off additional major expenses such as insurance premiums, e.g. Disability Insurance, Long-Term Care Insurance. The advantage of a CES is that you would be able to implement your own tax reduction plans without the need of receiving your MC’s approval.

How do you set up a CES?

A common misconception with a CES is that many physicians feel it is too burdensome to set up. This could be true if the physicians attempted the set up process on their own, or had an inexperienced attorney guiding them.

With the proper help and guidance from your trusted advisors, there is no reason why this process should be difficult or complicated. As long as you follow the simple four-step process, your path to saving money should be ready in no time.

The Four-Step Process

Follow these four steps to ensure you have properly created your CES:

Creating a new company: If you are debating between a Professional Corporation (PC) or a Professional Limited Liability Company (PLLC), it is important to keep in mind that depending on how your PC is structured, there would not be a difference. However, it is advised to consult with an attorney to explain how to have a PC properly structured.

Cancel current employment agreement: Once your new Company is formed, your next step would be  to contact your MC and inform them (assuming you have already received their approval for allowing such a structure to take place) that your PC/PLLC has been created and you need to cancel the current employment agreement.

Creating new agreements: Once you have informed your MC about the cancellation, you must   move forward with drafting the new employment agreement between your MC and your PC/PLLC. Very simply, this will involve the MC changing your personal name to your PC/PLLC name.

Save money: At this point you are ready to receive your income from your PC/PLLC and begin to write-off whichever expenses you want through your company.

If you find yourself in an employment position that restricts your ability to reduce your income taxes, then a CES may be your gateway to saving money. Although an effective plan that helps physicians preserve their hard-earned wealth, it is still a plan that has yet to be fully utilized. Take advantage and see the savings grow!

Adil Daudi is an Attorney at Joseph, Kroll & Yagalla, P.C., focusing primarily on Asset Protection for Physicians, Physician Contracts, Estate Planning, Business Litigation, Corporate Formations, and Family Law. He can be contacted for any questions related to this article or other areas of law at adil@josephlaw.net or (517) 381-2663.

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Harun Yahya – Secrets of the Hypocrites

July 13, 2009 by · Leave a Comment 

They Remember Allah Only Rarely

Recite what has been revealed to you of the Book and perform prayer. Prayer precludes indecency and wrongdoing. And remembrance of Allah is greater still. Allah knows what you do.

Al-‘Ankabut: 45

As the above verse reveals, recalling Allah is one of a believers’ most important religious observances. People with true faith know that they live each moment among the blessings imparted by Him and constantly give thanks to Allah. They know that they are in absolute need of auspicious events that come from Him, that they must account for themselves to Him in the Hereafter, and that they can enter Paradise only if He so wills it. Allah is always in their hearts and on their tongues. They remember Him at every opportunity, and speak of the blessings He has given them, expecting nothing in return, and the perfect equilibrium in the universe created by Him.

Since hypocrites, on the other hand, do not possess such faith in their hearts, they fail to call upon Allah as they ought. The reason behind this is that they do not submit to Him sincerely and have no deep faith in Him. They are therefore unwilling to remember Him, because in doing so, they will also be repeating many things that they do not actually believe in—or which they are responsible for doing, but have failed to do. This may put them off, since it will impinge slightly on their consciences. Even if they do imitate believers and attempt to sincerely recite His names, still they will give themselves away and thus, have no effect on the hearts of those who hear them. Therefore, while in the midst of believers, they attract attention by remembering Him only seldom and in a superficial way.

Indeed, Allah has revealed this important sign that reveals the sickness in their hearts by means of verses:

. . . [They are] showing off to people, and only remembering Allah a very little.

An-Nisa’: 142

Satan has gained mastery over them and made them forget the remembrance of Allah . . .

Al-Mujadala: 19

They Ascribe Partners to Allah

Believing in powers besides Allah, assuming that they can play a part in creation, the running of the universe, or making judgments, for example, is one of the main characteristics of hypocrites. They believe that human beings are independent of Allah and thus set up partners beside Him, no matter how much they may deny it. What gives their sickness away is that they do not like Allah to be remembered as the One and Only. They are unable to recall Allah by praising Him as they ought. This is one of the features that give them away:

We have placed covers on their hearts, preventing them from understanding it, and heaviness in their ears. When you mention your Lord alone in the Qur’an, they turn their backs and run away.

Al-Isra’: 46

When Allah is mentioned on His own, the hearts of those who do not believe in the Hereafter shrink back shuddering, but when others apart from Him are mentioned, they jump for joy.

Az-Zumar: 45

They Fear Other People, not Allah

Hypocrites claim that they love Allah, and everything they do is intended to gain His approval. However, these words actually represent their way of avoiding putting Allah’s commandments and recommendations into practice.

Someone who sincerely believes in Allah feels not only love for Him, but also a fear filled with awe. In other words, the person who loves Allah best is, at the same time, one who fears Him the most because, as we have emphasized from the outset, loving Allah requires one to recognize His all “beauteous names,” and that He will manifest His infinite might—and when necessary, justice, through the torments He will give. Those incapable of appreciating Allah’s might, who do not understand that He witnesses their every action, do not fear our Lord. If someone says, “I love Allah, but do not fear Him,” or gives the impression of thinking along those lines, then that person is insincere in the most literal sense of the word.

Indeed, when we look at the lives of hypocrites, we see that this spiritual condition prevails throughout their behavior. The hypocrite claims to fear Allah, but when we look at the practicalities of the matter, we see that he seeks to harm the believers, works against them and makes up slanders about them. The picture that emerges from this is that this person does not truly fear Allah. Furthermore, as stated above, the hypocrite produces his own religious conception and lives according to the twisted laws of that religion, in order to win the approval of others. Indeed, he believes that all individuals have a unique power. He feels obliged to earn the approval and liking of each and every one.

However, the one fact that he cannot comprehend is that every human being is merely a servant created by Allah. Each is an entity who has come into being at Allah’s desire and will die in the same way. The hypocrite is unable to comprehend this—or rather, is unwilling to, because in his own religion, gaining the approval of others is an essential obligation. His fears are equally founded on that basis.

The way hypocrites fear other people and always seek their approval will reveal itself in times of difficulty. The Qur’an refers to hypocrites being terrified when they see people united against them. At first, they promised that they would definitely take part in the war. But when the order for battle came, the fear they felt carried their faith away with it:

Don’t you see those who were told: “Hold back from fighting but perform prayer and give the alms?” Then when fighting is prescribed for them, a group of them fear people as Allah should be feared, or even more than that. They say, “Our Lord, why have you prescribed fighting for us? If only You would give us just a little more time!” Say, “The enjoyment of this world is very brief. The Hereafter is better for those who guard against evil. You will not be wronged by so much as the smallest speck.”

An-Nisa’: 77

They Betray the Religion of Allah

Hypocrites, who do not fear Allah and who live by their own erroneous understanding of religion, thus exhibit no devotion to His religion. They are constantly betraying the messenger of Allah and the faithful, in their struggle to abide by the moral values of the Qur’an. Their betrayal is described in the Qur’an in these terms:

But because of their breaking of their covenant, We have cursed them and made their hearts hard. They distort the true meaning of words and have forgotten a good portion of what they were reminded of. You will never cease to come upon some act of treachery on their part, except for a few of them. . . .

Al-Ma’ida: 13

The hypocrite is aware that he is a fraud. Behaving in such a way as to deceive Allah, His messenger and believers, he lives in a constant spirit of betrayal. Every betrayal leads to another, because the hypocrite is aware of his own treachery. Even if he conceals himself from believers, he cannot hide himself from himself. And since he witnesses his own sins, his excesses increase still further. First he says something bad about the messenger of Allah, and takes pleasure from this. Later he slanders the messenger, and that too he enjoys—because he is moving along the path of satan, his true friend. Then he sets a trap for the messenger. His crimes multiply and increase. However, he is also unaware that his betrayals of Allah, His messenger and the faithful will avail him nothing, but that, on the contrary, they will lead him to Hell. On the basis of this, he is easily able to engage in betrayal. The fact is, however, that in addition to the troubles he will experience in this world, a punishment full of suffering also awaits him in the next. Allah reveals the fate of hypocrites in another verse:

Allah has promised the men and women of the hypocrites and disbelievers the Fire of Hell, remaining in it timelessly, for ever. It will suffice them. Allah has cursed them. They will have everlasting punishment.

At-Tawba: 68

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