Has anyone dealt with the "step transaction doctrine" issues when selling to a non-physician MSO? Our attorney keeps bringing this up as a risk.

This is exactly the type of complex transaction where getting multiple professional opinions is crucial. I went through a similar sale of my orthopedic practice to a private equity group last year, and the interplay between tax optimization, regulatory compliance, and deal structure was mind-boggling. One aspect that really caught me off guard was how the valuation methodology impacts the tax treatment. The buyers wanted to use an income approach that allocated most value to the management contract (ordinary income for me), while I pushed for an asset approach that recognized more goodwill value (capital gains treatment). The difference was substantial - nearly $200K in my case. Also, don't underestimate the importance of the transition period length. We structured a 24-month earnout that allowed me to maintain some S-Corp ownership while gradually transferring to a physician employee. This provided tax deferral benefits and gave the MSO time to prove their operational capabilities before I fully exited. The regulatory landscape varies significantly by state and specialty. Orthopedics has different compliance requirements than primary care, and some states are much more restrictive about MSO fee arrangements than others. Make sure your attorney has specific experience with medical practice transactions in your state and specialty.

Don't forget about the Earned Income Credit! My ex and I live together with our kids (not married) and we found out that if the lower earning parent claims the kids, you might qualify for EIC which can be substantial.

As someone who went through a very similar situation last year with my partner, I'd strongly recommend running the numbers both ways before deciding. We have two kids (3 and 5) and similar income levels, and initially thought splitting the dependents made the most sense. However, after calculating everything out, we found that having me claim both children and file as Head of Household saved us about $2,800 compared to each claiming one child. The key was figuring out who actually pays "more than half" of the home maintenance costs - it's not just mortgage, but also utilities, repairs, property taxes, homeowner's insurance, etc. Since you own the home, you're probably paying property taxes and homeowner's insurance directly, which might push you over the 50% threshold even with her contributing half the mortgage payment. I'd suggest adding up ALL your housing costs for the year and see where you land. Also, whoever claims the kids can claim the childcare expenses for the Dependent Care Credit, regardless of who physically writes the checks to the daycare. This credit can be worth up to $2,100 for two kids, so factor that into your calculations too. One last tip - keep detailed records of who pays what throughout the year. The IRS sometimes scrutinizes unmarried couples' filing status more closely than married couples.

I wanted to add that getting an EIN is super easy these days. You can do it online at the IRS website and get your EIN immediately. It's free and takes maybe 15 minutes tops. Here's the link: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online Don't waste money on those "EIN services" that charge you for something you can do yourself for free. Just make sure you have your LLC formation docs handy because they'll ask for the formation date and state.

From personal experience, you absolutely want to set up proper business banking from day one. I made the mistake of using a personal account for my first few months of LLC operations and it became a nightmare during tax season - trying to separate business expenses from personal ones was incredibly time-consuming. Regarding the EIN vs SSN question: while you CAN use your SSN for a single-member LLC, I'd strongly recommend getting an EIN anyway. It's free, takes 15 minutes online, and makes everything smoother with banks. Plus, you'll need it eventually if you ever hire employees or change your tax election. Don't let the banking decision hold up getting paid! Most banks can set up a business account quickly once you have your LLC docs and EIN. Credit unions are often faster and cheaper than big banks for small business accounts. The key is keeping those business transactions completely separate from personal ones to maintain your liability protection.

I was trying to figure out the Saver's Credit using FreeTaxUSA but got confused because I also claimed the Child Tax Credit. Do these credits affect each other? My income is around $44k and I'm head of household with 2 kids.

Just wanted to add another important detail about the Saver's Credit that might help others: the AGI thresholds are adjusted annually for inflation, so make sure you're looking at the current year's limits when calculating your eligibility. For 2025, the income limits for married filing jointly are approximately $46,000 for the 50% credit, $50,000 for the 20% credit, and $77,000 for the 10% credit. Since you mentioned your AGI is around $50,000, you might actually be right at the border between the 20% and 10% tiers depending on your exact income. Also worth noting: if you're close to a threshold, even small adjustments to your AGI (like additional traditional IRA contributions) could bump you into a higher credit percentage, making those contributions even more valuable. It's one of those situations where the math can really work in your favor if you plan it right!

I think the broader issue here is setting clear expectations with your CPA. I've had several over the years, and here's what I've learned: 1. Most CPAs are not automatically going to know every local tax requirement in every jurisdiction - they focus on what's common for most of their clients 2. The best approach is to explicitly ask them which jurisdictions they're comfortable/familiar with 3. For any CPA, provide them with a complete list of everywhere you do business or have property 4. Consider a CPA who specializes in multi-state taxation if you operate in several states The reality is that while a great CPA will research requirements they're unfamiliar with, they can't read your mind. You need to be proactive about communicating your full situation.

One thing nobody's mentioned - most tax software used by CPAs has significant limitations with local taxes. I worked at a CPA firm for years, and our $30,000/year professional tax software was TERRIBLE at flagging city/local requirements. The bigger firms get around this by having dedicated state & local tax (SALT) departments. If you're using a small or mid-sized firm, they might not have those specialized resources. And solo practitioners are almost certainly going to miss some local requirements unless they specifically practice in those jurisdictions.