With this being the first year the new tax law will impact how people file, what are some big changes I should pay attention to as I prepare my 2018 taxes?

At the end of 2017, the Tax Cuts & Jobs Act was passed by Congress and signed into law by President Trump. This tax season will be the first time many of the changes officially take effect. This article will provide an overview of some of the bigger changes that occurred.

The bill preserves seven tax brackets, but changes the rates that apply to 10%, 12%, 22%, 24%, 32%, 35%, and 37%. Here’s how much 2018 income applies to the new rates:

10% (income up to $9,525 for individuals; up to $19,050 for married couples filing jointly)

12% (over $9,525 to $38,700; over $19,050 to $77,400 for couples)

22% (over $38,700 to $82,500; over $77,400 to $165,000 for couples)

24% (over $82,500 to $157,500; over $165,000 to $315,000 for couples)

32% (over $157,500 to $200,000; over $315,000 to $400,000 for couples)

35% (over $200,000 to $500,000; over $400,000 to $600,000 for couples)

37% (over $500,000; over $600,000 for couples).

The new bill nearly doubles the standard deduction. For single filers, the bill increases the deduction to $12,000 from $6,350; for married couples filing jointly it increases to $24,000 from $12,700. However, it eliminates personal exemptions. Previously, you were allowed to claim a $4,050 personal exemption for yourself, your spouse, and each of your dependents.

How to make sense of the IRA aggregation rule

The bill preserves the state and local tax deduction for anyone who itemizes, but caps the amount that may be deducted at $10,000. Before, the deduction was unlimited for your state and local property taxes plus income or sales taxes.

The new tax law doubles the child tax credit. The new credit is $2,000 for children under age 17. The credit is also made available to higher earners by raising the income threshold under which filers may claim the full credit to $200,000 for single parents and $400,000 for married couples. These income thresholds stood at $75,000 and $110,000 respectively in previous years.

The new bill lowers the cap on mortgage interest deductions. If you take out a new mortgage on a first or second home, you will only be allowed to deduct the interest on debt up to $750,000, down from $1 million. Homeowners who already have a mortgage would be unaffected by the change.

The new tax law curbs who’s hit by the alternative minimum tax (AMT). The final bill keeps AMT, but reduces the number of filers subject to it by raising the income exemption levels to $70,300 for single filers, up from $54,300 previously; and $109,400 for married couples, up from $84,500.

"One of the most significant changes is that the new law exempts almost everybody from the estate tax"

One of the most significant changes is that the new law exempts almost everybody from the estate tax. While the bill does not call for a repeal of the estate tax, it essentially eliminates it by doubling the amount of money exempt from the estate tax to $10.98 million for individuals and $21.96 million for married couples.

The law does not change a taxpayer’s ability to deduct charitable contributions (assuming they itemize deductions). However, the increased standard deduction will reduce the number of taxpayers who itemize deductions and could impact future contributions.

Flexible spending vs. health savings accounts: How to choose

Most Tier II deductions have been eliminated. These include fees paid to certified public accoutants, financial advisers, and attorneys; an employee’s business expenses (tools, uniforms, supplies, travel, occupational licenses, etc.); investment expenses; home office deduction (some exceptions apply); and some education expenses.

529 accounts can now be used for K-12 education. Previously, these accounts could only be used for higher education. Up to $10,000 per year can be used on qualified K-12 education expenses.

To understand how these changes-as well as others not listed above-may impact you, contact your CPA.

Under the new tax law, were any significant changes made to charitable gifting deductions?

There were no changes to the charitable gifting rules. Individuals can donate up to 30% of their adjusted gross income (AGI) if they are giving non-cash gifts to charity. These can include investments, property, insurance, etc. Any amounts donated above 30% of your AGI can be rolled over to future years and used as deductions when needed.

Additionally, you can still claim a full deduction on cash gifts up to 60% of your AGI. Any amounts donated above 60% of your AGI can also be rolled over to future years.

Mr. Witz is educational program director at MEDIQUS Asset Advisors, Inc. in Chicago. He welcome readers’ questions and can be reached at 800-883-8555 or 

The information in this column is designed to be authoritative. The publisher is not engaged in rendering legal, investment, or tax advice.

Articles

As you prepare your 2018 taxes, here some big changes from the Tax Cuts & Jobs Act you should pay attention to.

How the 2017 tax law will affect your filing this year

When I was in training many years ago, a major pharmaceutical company sponsored a trip for senior residents from urology programs across the country-usually to a nice resort. The company understood the value of forming relationships with physicians early in their professional career, and this meeting probably helped develop loyalty among future prescribers.

The relationship between physicians and industry has certainly changed since then, and there is persistent academic and regulatory interest in whether these relationships are always proper and influence prescribing habits 

has introduced new transparency into payments to physicians, and as I have written in the past (

“CMS data breaks down industry payments to urologists,”

 August 2018, page 34), the amount of dollars being reported per individual urologist is quite small-but may not tell the whole story.

The AUA has outlined principles to guide its members on interactions with industry 

 Yet while the rules of engagement have become stricter, pharmaceutical companies continue to fund important clinical research, sponsor educational meetings not tied to their product, and try to develop direct customer relationships to build loyalty. While much has changed, much remains the same, especially in the area of pharmaceutical representatives in your office. In this article, I will examine some common issues in the office pertaining to industry reps and some possible solutions.

Cybersecurity: How to safeguard your practice against threats

 Pharma reps use samples to get access to physicians and influence prescribing habits 

 Urologists value drug samples because they can start treatment immediately at no cost, test how a patient will tolerate a drug, and give their patient a free present.

Samples create a liability for recordkeeping, inventory control, and patient safety. Consider the recent nationwide recall of a common blood pressure medication due to a cancer-causing impurity 

 Would your practice have been able to easily identify all of the patients who had been given a sample of, say, an overactive bladder medication? By lot number?

Always enter the medication into your electronic health record, which will then perform important safety checks like drug-drug, drug-disease, and drug-allergy interactions as well as populate the patient’s medication list.

Enter the lot number of any medications injected, administered, or sampled in the office-so the patient can be identified by lot number in the event of a recall.

Provide the patient with printed instructions, warnings, and other information just as they would receive if they went to a retail pharmacy.

Maintain an inventory log of samples, control access to those samples, and dispose of expired medications.

If you aren’t willing to follow these best practices, maybe it is time to consider whether the value of samples to your patients and your practice is worth the liability.

 It is important to acknowledge that there is a role for industry-sponsored education of physicians, and that many busy urologists receive some or even most of their knowledge about new procedures, products, or new indications from industry sources: sponsored meetings, manufacturer’s websites, prescribing literature, or even pharmaceutical salespersons and “leave behinds.” Those same reps may be the sole source of training and education on new products for your clinical staff and assistants. Some device manufacturers separate the role of sales and training of physicians, and until recently a different set of rules characterized relationships between drug and device manufacturers and their physician customers.

Do not finish your education of novel therapies and treatments with sales materials, but possibly begin there.

Do not challenge pharmaceutical representatives about the accuracy of their claims-they likely know more than you do about any research that supports their product; supplement the information targeted at you with continuing education from an objective source.

Supervise any education of your clinical staff and keep them aligned with your prescribing patterns and habits, minimizing the chance that your patients will hear different messages from you and your staff.

If you follow these best practices, you can realize the advantage of industry-sponsored education and avoid the pitfalls that could affect your professional practice.

 Most urology offices were not designed beyond the requirement for patient care, and many were not built to accommodate growth in volume and staff. The conditions are ripe in many practices for conversations to be overheard, for bystanders to be exposed to personal information, and even for proprietary information to be shared unintentionally.

A vendor representative is frequently a repeat guest who knows your front staff, brings food, and is welcomed through the reception room door into a busy corridor or checkout area where he or she is exposed directly to protected health information and the inner workings of your practice. Most are honest professionals who want to build trust and understand the sensitivity of the business of urology, but they are guests. They are not usually bound by a confidentiality agreement with you, and they may also call on your referral sources, competitors, and local hospitals and health systems.

What 2019 MIPS changes mean for your practice

In some cases, physicians may also develop a relationship outside of the office with a sales representative who is a neighbor, parent at your child’s school, or on the same sports team-sharing even personal information.

Meet with industry outside of the clinical care area, and avoid exposing them to patients or their records altogether.

Do not discuss any proprietary information with a guest; for example, how many patients you see, whether you are successfully getting reimbursed by a payer, or where your referrals come from or go to.

Have industry representatives who may be exposed to proprietary information sign a confidentiality agreement, just as a third party who handles protected health information must sign a business associates agreement.

If you respect the privacy of your patients, your staff, and yourself, you will enjoy the professional respect of industry reps.

 Urology practice policies regarding industry rep visits range from completely open access to no access, and in a group there are often a range of preferences by individual physicians. In some practices, it may be easier for an industry rep to see a physician than it is for a patient! Sales representatives do not want to be perceived as an interruption in the busy day of a physician, and they prefer more than a 30-second pitch in the hallway-but given a choice they prefer random access over no access.

Best practice is to schedule meetings with industry representatives-just as you do with patients, hospitals, vacation, or any other block of your valuable time. You are actually doing a service to everyone involved by setting an expectation and being predictable. As this practice becomes more common, if you do not schedule meetings, you are the exception.

There is at least one vendor in this space-RxVantage 

-that offers a platform that includes a rules-based shared scheduling module, on-demand messaging application (to request samples, for example), patient assistance module, and more. Most of the major manufacturers participate in RxVantage, it is paid for by the Pharmaceutical Research and Manufacturers of America, and is free to practices. Lunches and other meetings can be scheduled months or even years in advance, and according to rules set by the practice.

Bottom line: It is possible to leverage the advantages of relationship with industry while avoiding the risks. Take a look and see whether you need to make some changes to keep the relationships valuable, compliant, and professional.

In this article, Robert A. Dowling, MD, examines some common issues in the office pertaining to industry reps and some possible solutions.

How to leverage industry relationships while avoiding risks

With a long list of legislative priorities set for 2019, the AUA has established the AUA Political Action Committee 

 to which members can contribute to help advance the association’s advocacy efforts in Washington.

Explaining the purpose of the PAC, AUA President Robert C. Flanigan, MD, said: “AUAPAC helps AUA participate in the political process to advance the specialty of urology and enhance the care of the patients we serve.”

Members’ contributions to AUAPAC will be used to support candidates for the House and Senate, including incumbents, who support the association’s positions and goals with respect to key legislative issues.

Tom Rechtschaffen, MD, chair of the AUA Legislative Affairs Committee, said the new PAC will provide both clinical and academic practice urologists, researchers, allied providers, and others a platform to support candidates and policies impacting urology. A PAC board, comprised of urologists and other leaders with an interest in urology, will guide the nonpartisan AUAPAC, which will follow specific principles and criteria in determining recipients of political contributions.

 with the American Association of Clinical Urologists (AACU), but pulled out, explained Dr. Rechtschaffen, because of issues involved with two separate organizations involved in its management.

So AACU took over UROPAC on its own, he said. “But a lot of urologists (who are not AACU members) are excited about legislative affairs and they didn’t really have a place to donate and have their concerns addressed. So, we tried to make sure every urologist is represented. This is why AUAPAC came into existence,” Dr. Rechtschaffen said.

Dr. Rechtschaffen said there has been a “big turnover” in the AUA’s legislative priorities this year, largely because so many previous goals from previous years have been achieved.

Priorities reflect systemic change, shifting centers of power

Chief among those successes was repeal of the Independent Payment Advisory Board (IPAB), which was included in President Obama’s Affordable Care Act. The plan for IPAB, which was to be a 15-member commission, was to make it easier for Congress to control Medicare spending.

However, the AUA and the vast majority of organized medicine vehemently opposed IPAB, charging that it would take unilateral action to reduce Medicare reimbursement levels with little recourse for Congress to overturn its actions.

The big chance to finally get rid of IPAB, which never was actually launched, came during consideration of the Bipartisan Budget Act of 2018, which included IPAB repeal language. It was passed by large margins in both the House and Senate and signed into law by President Trump.

Now, the AUA’s priorities include efforts to:

preserve access to appropriate PSA screening

reform the U.S. Preventive Services Task Force recommendation process

preserve the appropriate use of the in-office ancillary services exception to the Stark Law and work to remove barriers that prevent urologists from participating in value-based payment models

address work force shortages in all urologic access practice environments, preserve access to appropriate and timely care, expand access to care with innovations including telemedicine, and advocate for increased graduate medical education funding and resources for urology positions

reduce regulatory burdens (eg, MACRA implementation, prior authorizations, step therapy) and other issues that limit patient access to care, interfere with the physician-patient relationship, or cause physician burnout

advocate for the full continuum of care for prostate cancer survivorship

ensure equitable infertility care for wounded warriors and veterans.

“AUA is still focusing on funding for graduate medical education,” said Dr. Rechtschaffen, who noted that the average age of urologists is the second oldest of any specialty.

“We need to replace those retiring and train more urologists,” he said. “That’s at the top of list. We are also pushing for research funding. The fact is that we cannot find new cures without appropriate funding, and AUAPAC will represent those in research positions who are concerned about this.”

Dr. Rechtschaffen said the AUA also is pushing for fertility benefits for veterans.

Merger mania requires protections for patients, providers

“We found a disconnect between soldiers who fought for our country and were injured and their ability to access fertility treatment. The Veterans Administration has no mechanism to cover fertility treatment, so rectifying this is one of our major initiatives. We are pushing very hard on that.”

Quality Payment Program transparency needed

Regarding MACRA, he said, “We are all aware that the sustainable growth rate formula was replaced with the MACRA Quality Payment Program, which requires doctors to meet specific criteria for performance and certification for reimbursement. It is a very comprehensive system, and we need to advocate for transparency and simplification of the rules and fairness between specialists and primary care physicians.”

A constantly recurring priority for the AUA is medical liability reform.

“That is always near the top of our member surveys,” Dr. Rechtschaffen said.

These and other issues were included on the agenda of the 

, March 4-6 in Washington, where more than 200 attendees will hear 

associate editor Bob Woodward present the keynote address.

The conference includes speakers ranging from urologists to patients, government employees, and members of Congress. It provides opportunities for participants to meet with lawmakers and their staff and to meet with officials at various federal agencies.

Last year, the summit attracted more than 250 attendees, including physicians and health care professionals from all walks of life.

“The turnout was amazing,” said Dr. Rechtschaffen. “People saw their issues addressed and we got tremendous ratings, especially from the younger physicians who are under the AUA tent, but really don’t know yet what they’ll be doing. Both AACU and LUGPA have helped organize the event and participate in various sessions.

“The fact that all these groups participate make this event special,” Dr. Rechtschaffen observed. “It’s really the whole community, not just the AUA.”

With a long list of legislative priorities set for 2019, the AUA has established the AUA Political Action Committee to which members can contribute to help advance the association’s advocacy efforts in Washington.

Vol. 47 No. 3

How the 2017 tax law will affect your filing this year

How to leverage industry relationships while avoiding risks

AUA forms PAC to pursue policy goals