Taxes, mortgage specialists

[HailmadeMode]

Hey guys!

Who do you reach out to in order to find resident-specific accountants and mortgage specialists? With the new changes to the federal budget, I want to connect with someone who deals with residents and knows what the most competitive rates are etc. I am meeting with MD financial. I was with them in med school and they have folks in ontario as well so I can connect with them here during residency. Are there other groups I should be speaking to? 

Thanks in advance

[RichardHammond]

I met with MD Financial recently and they provided me a list of accountants, lawyers, insurance, incorporation resources. I'm sure they would be able to provide you a list of people specific to your region. But off the top of my head, MNP and Grant Thornton are some accounting firms I remember hearing are pretty familiar with how things work for medical students and residents.

Regarding mortgage specialists, previous threads on Premed 101 recommended reaching out to the person who set you up with your medical student LoC and they could put you in touch with someone who understands the unique aspects of resident finances. Personally, I just called a bank's 1-800 number for their mortgage department and they eventually referred me to someone familiar with how residency works. The non-bank route might be a little trickier. Tried going through a broker I found on ratehub and they were pretty confused with the residency situation but YMMV.

[HailmadeMode]

On 3/22/2019 at 3:14 PM, RichardHammond said:

I met with MD Financial recently and they provided me a list of accountants, lawyers, insurance, incorporation resources. I'm sure they would be able to provide you a list of people specific to your region. But off the top of my head, MNP and Grant Thornton are some accounting firms I remember hearing are pretty familiar with how things work for medical students and residents.

 Regarding mortgage specialists, previous threads on Premed 101 recommended reaching out to the person who set you up with your medical student LoC and they could put you in touch with someone who understands the unique aspects of resident finances. Personally, I just called a bank's 1-800 number for their mortgage department and they eventually referred me to someone familiar with how residency works. The non-bank route might be a little trickier. Tried going through a broker I found on ratehub and they were pretty confused with the residency situation but YMMV.

Thanks man, that makes a lot of sense. My LOC person moved over to another career now, but this would have been a great first point of contact. Good to know about MD financial hooking all those resources together for you.

I am also wondering about incorporating during residency. Any thoughts on that? Im sure there have been discussions on this before, maybe ill try to dig it up. 

[NLengr]

6 hours ago, HailmadeMode said:

Thanks man, that makes a lot of sense. My LOC person moved over to another career now, but this would have been a great first point of contact. Good to know about MD financial hooking all those resources together for you.

I am also wondering about incorporating during residency. Any thoughts on that? Im sure there have been discussions on this before, maybe ill try to dig it up. 

Is there a point to incorporating during residency? You are an employee of the hospital and your income is quite low. I have never heard of anyone doing that. 

[HailmadeMode]

5 hours ago, NLengr said:

Is there a point to incorporating during residency? You are an employee of the hospital and your income is quite low. I have never heard of anyone doing that. 

I had a chance to discuss this and yes it is doable and is done (perhaps it is not commonly discussed?) I was told this is particularly useful for those moonlighting, and not so much for others. Look into it! Perhaps its beneficial for your circumstance. It was not recommended for those in my specialty. 

[Lactic Folly]

Usually, you'd have to be able to leave enough in the corporation to invest in order to justify the costs of incorporation, or have someone in a lower income bracket that you could employ to help with your business. I don't know whether any residents could moonlight enough to make incorporation worthwhile, given their limited time availability. Were you speaking to a physician who has actually done this?

[LittleDaisy]

I read from various references, that it is only worthwhile to incorporate if your annual income is around 200,000; and you don't plan to do any major purchases that would require you to take money out of your corporation (downpayment, paying back LOC, buying a brand new car, etc;)  which will be heavily taxed.

Your opportunity to moonlight will be very limited during residency, I personally don't think that it's advantageous to incorporate during residency. 

[HailmadeMode]

22 hours ago, Lactic Folly said:

Usually, you'd have to be able to leave enough in the corporation to invest in order to justify the costs of incorporation, or have someone in a lower income bracket that you could employ to help with your business. I don't know whether any residents could moonlight enough to make incorporation worthwhile, given their limited time availability. Were you speaking to a physician who has actually done this?

Yep, a physician first told me about this. That's why I discussed it with MD financial, and they gave me the suggested reasons as to when to incorporate (LittleDaisy mentioned for you to make $200K before incorporating. I was quoted at 100K as of yesterday). I can't moonlight in my specialty so it's out of the question for me. But if you think you can in yours, it may be worthwhile to double check.

While you are here, do you have other suggestions on who to connect with re: taxes (I saw  MNP and Grant Thornton above) and mortgage specialists? Thanks all! 

[Lactic Folly]

A physician told you it was worthwhile for them to incorporate during residency? I agree 100k is lower than any number I've ever heard, but you would have to do the math as to how much you'd have left over for tax deferral (not deduction) after living expenses and RRSP to balance out the annual costs of incorporation.

There will be accountants in each city who specialize in medical professionals - I would just ask around and find someone your colleagues are happy with. As a resident, my taxes were simple, so I did not use someone who dealt with physicians specifically. Perhaps it could have been advantageous, but I don't know.

[rmorelan]

...yeah....exactly how much moonlighting are you doing? How much debit do you have? There are yearly costs to having a corporation that may make it illogical to start up this early but every situation is unique. Personally I would max out your RRSP backlog, top up your TFSA fully at your stage prior to incorporating and look closely at the debit situation. 

 

 

[HailmadeMode]

15 hours ago, rmorelan said:

...yeah....exactly how much moonlighting are you doing? How much debit do you have? There are yearly costs to having a corporation that may make it illogical to start up this early but every situation is unique. Personally I would max out your RRSP backlog, top up your TFSA fully at your stage prior to incorporating and look closely at the debit situation. 

 

 

No moonlighting possible in my specialty. Nice suggestions re: RRSP and TFSA. Those have been sitting nicely at 0 so far :p.  So I can see now that it doesnt make sense for me to go down the incorporating route at all. 

16 hours ago, Lactic Folly said:

There will be accountants in each city who specialize in medical professionals - I would just ask around and find someone your colleagues are happy with. As a resident, my taxes were simple, so I did not use someone who dealt with physicians specifically. Perhaps it could have been advantageous, but I don't know.

 

Yea Im sure mine will be straight forward as well! I was wondering if there were certain purchases that are tax exempt that I may not be aware of but that a resident-specific accountant know. That's why I thought maybe hiring one now may be a good idea. 

So you used an accountant, just not a physician-specific one? 

[Lactic Folly]

For medicine-specific information, I used the MD management documents:

https://invested.mdm.ca/resident/tax-tips-for-physicians-and-physicians-in-training-students-residents-fellows

https://legacy.cma.ca//Assets/assets-library/document/en/practice-management-and-wellness/tax-tips-2017.pdf

In residency, you can keep receipts for books and instruments to be transferred to one's eventual practice, as discussed in those documents.

[LostLamb]

Keep in mind that some med/dent professional accountants will do your taxes for you free of charge in exchange for developing the relationship and trust with you during residency and then you'll remain with them when you're staff.

I would ask around your colleagues for recommendations unless you feel you have the time/energy/knowledge to do your taxes yourself as a resident.

This has worked well for me, in that I have had a person in residency who I am planning to switch from when I become staff. S/he was recommended to me in early residency but I find they are too aloof so I am seeking out a relationship with someone who has more open communication.

(and to be pertinent to the thread topic, no reason to be incorporated in residency. you need to be making just over 200K for that to demonstrate any benefit...you'd need to be a moonlighting machine--and those exist--and perhaps for them it is worth it, otherwise I'd just leave that for start of practice).

[HailmadeMode]

On 3/29/2019 at 3:19 PM, LostLamb said:

Keep in mind that some med/dent professional accountants will do your taxes for you free of charge in exchange for developing the relationship and trust with you during residency and then you'll remain with them when you're staff.

I would ask around your colleagues for recommendations unless you feel you have the time/energy/knowledge to do your taxes yourself as a resident.

This has worked well for me, in that I have had a person in residency who I am planning to switch from when I become staff. S/he was recommended to me in early residency but I find they are too aloof so I am seeking out a relationship with someone who has more open communication.

 

 

Nice, thanks! I got to speak with an accountant familiar with residents/staff physicians and he mirrored your response here. Said most of it is basic enough for me to do taxes on my own. Otherwise, a CGA would be more than enough to assist (and a CA would be overkill). 

On 3/29/2019 at 3:19 PM, LostLamb said:

 

(and to be pertinent to the thread topic, no reason to be incorporated in residency. you need to be making just over 200K for that to demonstrate any benefit...you'd need to be a moonlighting machine--and those exist--and perhaps for them it is worth it, otherwise I'd just leave that for start of practice).

1

Hmm, we keep going back to this and this topic was brought up during my phone call as well. Again, he agreed that for my specialty it really is unheard of and that incorporating as a resident, in general, is quite rare. Those who do incorporate as residents need 30K per anum to break even, and 50K (in addition to their resident salary) to make having a corporation worthwhile. Seems doable for certain specialties and I suppose those are the folks who have been incorporating, albeit it remains rare. 

[LittleDaisy]

On 3/26/2019 at 11:56 PM, HailmadeMode said:

Yep, a physician first told me about this. That's why I discussed it with MD financial, and they gave me the suggested reasons as to when to incorporate (LittleDaisy mentioned for you to make $200K before incorporating. I was quoted at 100K as of yesterday). I can't moonlight in my specialty so it's out of the question for me. But if you think you can in yours, it may be worthwhile to double check.

While you are here, do you have other suggestions on who to connect with re: taxes (I saw  MNP and Grant Thornton above) and mortgage specialists? Thanks all! 

Just curious, in what specialties can you moonlight before graduation? I am not too sure if anyone has time during residency to moonlight? The hassle of applying for a restricted license and sacrifice off time to work as a staff, doesn't make it sound like worth it except for monetary reasons. 

[LostLamb]

3 hours ago, LittleDaisy said:

Just curious, in what specialties can you moonlight before graduation? I am not too sure if anyone has time during residency to moonlight? The hassle of applying for a restricted license and sacrifice off time to work as a staff, doesn't make it sound like worth it except for monetary reasons. 

Very common in Alberta for psych, neuro, IM, gen sx to take on moonlighting shifts. Some family med residents also take on psych extenders--unsure if they are eligible for any other ones.

The hassle to apply is nearly nil-a form and some reference letters. The cost of the restricted license is about 1000$, no change in CMPA except you need to be under the code permitting moonlighting.

Basically, it is for the financial benefit, without the post-call day benefits. 

[HailmadeMode]

9 hours ago, LittleDaisy said:

Just curious, in what specialties can you moonlight before graduation? I am not too sure if anyone has time during residency to moonlight? The hassle of applying for a restricted license and sacrifice off time to work as a staff, doesn't make it sound like worth it except for monetary reasons. 

Lost Lamb thankfully provided a much better answer than I can give! It appears common enough for those financial assistance folks to know about it, and my small circle of staff physicians and residents were aware. I also remember some of the senior IM residents moonlighting while I was doing CTU 

[HailmadeMode]

So! Updates: mortgage was possible as a first year resident. They are giving rates as low as 2.79% on a 5 year fixed mortgage (it could be even lower for you, but I have also seen folks receiving rates between 3.05 - 2.79, so that should give you something to work with). With negotiations, you can also receive up to $2000 (from what Ive seen, based on the size of mortgage you purchase), use your LOC as down payment, and some other perks. 

 

Good luck yall!