Tax Rounds - Newsletter for November 2025
What’s new at TaxSmart MD?
Fall is in the air! Like most of you, I enjoy the ability to exercise outdoors without changing my clothes every thirty minutes, and I like watching the leaves change. Halloween and Thanksgiving are two of my favorite holidays.
Another thing I usually look forward to is football season. However, my alma mater decided to pay $10 million to someone who has never coached college football, whose age would qualify him as his players’ (and his significant other’s) grandparent (I hope I am not being too cryptic). As a result, I have a surplus of free time on Saturday’s this year, and I’ve decided to let my loss result in my clients’ gain.
That means… process improvements! Before the next tax season, I want to fine-tune some of the systems we use to facilitate tax planning and preparation and make it a better experience for you.
Here are some of the changes on the way:
1. Estimated Payments - If you have estimated payments you need to make, I have set up automated emails detailing the amount of payment and who needs to make the payment. These are scheduled to go out at the beginning of the month when payments are due.
I will likely continue to refine these to add links with more detailed instructions and walkthroughs, though that is more of a long-term goal.
For my client base, it is not at all uncommon to have 3+ sets of estimated payments to manage (the highest is six), and as a result, I hope this is helpful. As we have more time to work together in 2026, my hope is that estimated payment obligations can be reduced through bumping up your W4 withholdings. However, if you have six figures or more of income outside of payroll, it will be hard to avoid estimated payments completely.
2. Accountable Plan - If you noticed that my last blog posts was about accountable plans, this isn’t a coincidence. If you are an S Corp owner using an accountable plan to reimburse expenses such as your home office, automobile expenses, or phone/internet, I have read through the Treasury Code regulations for documenting this, and I think there is an easier way to manage these. If I am helping you with an accountable plan now, expect an email with more details. If you are a new S Corp client, expect that we will discuss this more in an upcoming meeting.
3. Onboarding - I’ve realized that there are a lot of steps involved with becoming a client at TaxSmart MD, and as you’re getting started, you may have an incomplete picture of what to expect. As a result, I plan to start a checklist, which I can share with you after you sign up for services.
November availability
Except for clients who have signed up in the past thirty days, planning meetings and projections are nearly complete for this year.
Around November 15th, you can expect to receive an email inviting you to check in to make sure your projection is still on track. You are welcome to upload your most recent paystub(s), if they are from outside employment, and let me know if anything else has changed in your income. If you are making estimated payments, it will be helpful if you can approve my requested authorizations in advance. After I have a chance to review your documentation, we can either have a brief meeting, or I can send you a short video summarizing my analysis - your choice!
I will not be out from November 7th - 9th, and I will be taking an extended break from November 18th - 27th (Thanksgiving). During this time, I will likely be checking email periodically, but I won’t be scheduling meetings.
Also, if you are thinking of becoming a client, I have decided to stagger my onboardings so that I’m not overstretched heading into the coming tax season. As of now, I can still accommodate two new clients in November and two in December. At this time, there is an onboarding fee in place of the equivalent of one month’s subscription (results in a free month after a year as a client). After January 1st (if I am still taking new clients for the 2025 tax season), this increases to two months. With this being my first year in operation, it is subject to change. Most importantly, I want the 2025 filing season to go as smoothly as possible, and I want to ensure that our information is clear and organized going in, so we can focus on the more important (and fun) work of planning!
What’s New in the Blog:
Eight Things You Didn't Know You Could Do with Your IRS Account - I think most taxpayers take a no-news-is-good-news approach with the IRS, which most of the time is perfectly fine. However, if you don’t receive the refund you expect, get a notice that doesn’t make sense, or there is some other discrepancy between the numbers on your tax return and what the IRS has on file, there are a number of tools you can access so that you (or your tax pro) can figure out why a discrepancy exists.
When an S Corporation Isn’t the Right Prescription for Physicians - S Corps are a terrific tax strategy, but they aren’t for everyone. I wrote this in part because you’re more likely to be exposed to articles and media touting the benefits of S Corps than those talking about the drawbacks. As a tax professional who sells a more expensive S Corp service, I am also biased, though I do my best to be transparent about it and factor the extra tax costs into the comparison. While there are some clients where it is a “slam dunk,” more often than not, I can’t recommend for or against electing the S Corporation until I ask a prospective client 5-10 questions and run the numbers.
Simplified vs. Regular Home Office Deduction for Sole Proprietors - The actual expenses are almost always going to be higher than the simplified method, especially since the $5/sq ft calculation is unchanged with recent inflation (maybe you’re an exception if you live in the rural Midwest and bought your home five years ago with a <3% interest rate). However, before you compare the raw numbers, figure out what the net benefit of the actual expense deduction is after you remove some components (mortgage interest, property taxes etc) which you could deduct in a different part of the tax return.
Accountable Plans for S-Corp Owners - I started researching this to figure out the best practice for implementing accountable plans at TaxSmart MD. Over the summer, I figured out that asking clients to look up expenses every other month wasn’t really feasible. Fortunately, the periodic statement method is less onerous, and I’ll adopt this approach going into 2026. More to come.
Outside News and Views:
2025 International Tax Competitiveness Index - If you want some “light reading” about how our tax system compares to the rest of the world’s (and if you’re thinking of relocating abroad), this report is interesting.
The IRS Math and Taxpayer Help Act - This should make IRS notices less opaque and confusing. This bill had bipartisan sponsorship, which is pretty rare these days. If there is something everyone can agree on, it’s that the IRS needs to improve their notices.
Per Diem Rates for 2025-2026 Unchanged - If you are a sole proprietor and want to use the flat rate for meals and incidental expenses, these appear to be unchanged from last year.
What Doctors Need to Know About Receiving Gifts from Abroad (WCI) - The discussion of George’s inheritance is illuminating. Bottom line - if you have significant foreign assets, the chances are non-zero that the IRS will find out, and they expect you to disclose them.
A Couple in Their 80's Wants to Do Roth Conversions (WSJ) - I find that personal stories like this make tax planning considerations “stickier.” It is generally more efficient to pay taxes early in retirement than it is after one spouse dies, or for your kids to pay taxes in the ten-year window after you pass away.
Best Hotel Brands for Locums Physicians - For me, the right answer is Airbnb, but I know that many locums docs want to take advantage of travel hacking and enjoy the hotel amenities. For my money, you can’t do much better than the breakfast at Hampton Inn.
Wait, you can deduct this??
Protan Muscle Juice Professional Posing Oil - In this court opinion form 2004, a bodybuilder argued that his body oils were ordinary and necessary for his career. This was supported by the fact that they were marketed in bodybuilding magazines and don’t have much utility, if any, for everyday use outside of bodybuilding. As a tax professional, I assure you I have no intention to go shirtless in our meetings anytime soon. Accordingly, I will not be putting any Protan Muscle Juice on my business credit card.
Normally, taxpayers can’t deduct clothing and other products designed to enhance personal appearance, but you can deduct costs for make up and hair care for a photo shoot if it is specifically for a photo shoot and not applied outside of this setting. You can also deduct scrubs, uniforms, or a special costume if there is no practical utility outside of work (no, you can’t deduct your SpongeBob costume for Halloween).
On the other hand, the petitioner tried to argue that his buffalo meat and shakes were deductible, which the court denied because there are plenty of non-bodybuilders who consume these for general health and nourishment. The IRS rules for deducting meals are pretty strict, and it’s the facts and circumstances that matter, not what’s on the plate.
While there is a bit of grey, the overriding principle can be readily discerned. The IRS doesn’t like it when it looks like you’re rifling personal expenses through the business, and if you get audited, you need a logical case to explain the clear business connection and lack of non-commercial benefit.
That’s it for November! Thanks for reading, and email me at logan@taxsmartmd.com if you think of any questions, or have other topics you want me to cover in the blog or newsletter!