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Suggest - Year-End Tax Planning
While the average taxpayer will avoid thinking about income taxes until the approach of the April deadline forces him to do so, once the ball drops on One Times Square at midnight on December 31st and the New Year is rung in there is very little that can be done to cut your tax bill.
However, during the last two months of the year you can do a grea
However, during the last two months of the year you can do a grea
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
t deal to reduce your tax liability.
Sit down with paper and pencil and list your anticipated income for 2005 and all your allowable deductions to date. What you want to do is, using your 2004 return as a guide, prepare a projected 2005 return. Once this is done you can decide what steps to take to make sure you pay the absolute least amount of f
Sit down with paper and pencil and list your anticipated income for 2005 and all your allowable deductions to date. What you want to do is, using your 2004 return as a guide, prepare a projected 2005 return. Once this is done you can decide what steps to take to make sure you pay the absolute least amount of f
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
ederal and state income tax possible for 2005 and 2006. Tax information for 2005 (i.e. standard deduction and personal exemption amounts, tax rates, etc.) is available on the WHAT'S NEW FOR 2005 Page at www.robertdflach.net.
Here are some year-end tips:
1) Traditional year-end planning calls for postponing the receipt of taxable income until 2006
Here are some year-end tips:
1) Traditional year-end planning calls for postponing the receipt of taxable income until 2006
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
and accelerating allowable deductions to be claimed in 2005, the idea being to reduce your 2005 taxable income to a minimum. This strategy will generally apply if you expect to be in the same tax bracket for both 2005 and 2006, or if you will be in a lower bracket in 2006.
If, however, you anticipate a substantial increase in taxable income in 20
If, however, you anticipate a substantial increase in taxable income in 20
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
6, which will push you into a higher bracket, you should do the reverse and accelerate the receipt of taxable income to 2005 and postpone deductible expenses until 2006. Income received in 2005 will be taxed at a lower rate, and deductions claimed in 2006 will yield a greater tax savings.
Not sure what your 2006 income will be. Follow the rule of
Not sure what your 2006 income will be. Follow the rule of
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
"when in doubt - defer" - go the traditional route and postpone income and accelerate expenses.
2) It does not pay to itemize unless the total of your allowable deductions exceeds the standard deduction that applies to your filing status, plus any additions for age or blindness. If you decide to accelerate allowable deductions to claim them in 20
2) It does not pay to itemize unless the total of your allowable deductions exceeds the standard deduction that applies to your filing status, plus any additions for age or blindness. If you decide to accelerate allowable deductions to claim them in 20
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
05, you can accelerate all you want, but it will be wasted unless your total "itemizable" deductions exceed your applicable standard deduction.
Let us say you usually do not have enough deductions to itemize. However, after preparing your projected 2005 return you discover that, because of some special circumstance, you will be able to itemize thi
Let us say you usually do not have enough deductions to itemize. However, after preparing your projected 2005 return you discover that, because of some special circumstance, you will be able to itemize thi
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
year. During the last two months of the year you should incur, and pay for, as many deductible expenses as possible.
If, on the other hand, your projected return indicates that you do not have anywhere near enough deductions to be able to itemize, postpone making any deductible payments until 2006. Making these payments in 2005 would not produce
If, on the other hand, your projected return indicates that you do not have anywhere near enough deductions to be able to itemize, postpone making any deductible payments until 2006. Making these payments in 2005 would not produce
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
any tax savings, while it is possible that by deferring them until next year you may be able to itemize in 2006.
3) The timing of deductions is especially important when it comes to medical expenses and miscellaneous job-related and investment expenses. You are allowed to deduct medical expenses only to the extent that they exceed 7 1/2% of your
3) The timing of deductions is especially important when it comes to medical expenses and miscellaneous job-related and investment expenses. You are allowed to deduct medical expenses only to the extent that they exceed 7 1/2% of your
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
Adjusted Gross Income (AGI), and most miscellaneous deductions are only deductible to the extent that the total exceeds 2% of AGI.
If you anticipate a 2005 AGI of $70,000.00 you must exclude the first $5,250.00 of medical expenses - the first $5,250.00 is not deductible. If your medical expenses to date are close to or more than %5,250.00, and you
If you anticipate a 2005 AGI of $70,000.00 you must exclude the first $5,250.00 of medical expenses - the first $5,250.00 is not deductible. If your medical expenses to date are close to or more than %5,250.00, and you
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
will be able to itemize, pay any outstanding medical bills and schedule, and pay for, check-ups, doctor visits and needed dental work in November and December. If medical payments to date are substantially less than $5,250.00, put off paying any more medical bills until 2006. The same concept applies for miscellaneous deductions.
If you expect to
If you expect to
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
be able to itemize, and you are making quarterly state estimated tax payments, make the 4th quarter payment in December, instead of waiting until the January 16, 2006 due date, so you will be able to deduct the payment on your 2005 Schedule A.
4) If you do not have the cash available to pay for the deductible items you have scheduled as part of yo
4) If you do not have the cash available to pay for the deductible items you have scheduled as part of yo
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
ur year-end plan, you can use a credit card to pay for the item and still get a 2005 deduction. Allowable expenses charged to a credit card (VISA, Master Card, American Express, Discover) are deductible in the year charged, and not in the year that you actually pay for the charge.
5) The option to deduct state and local sales tax paid instead of s
5) The option to deduct state and local sales tax paid instead of s
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
tate and local income tax paid will expire on December 31, 2005. This option will not be available for 2006. If you are planning to buy a new car (other than a qualifying energy-saving hybrid - see tip #6), SUV, motorcycle, or other "big ticket" item in the near future you may want to do so before the end of the year to be able to deduct the sales
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
tax.
6) The Energy Tax Incentives Act of 2005 creates new tax credits for certain energy-saving autos, consumer products and home improvements beginning in 2006. You may want to postpone any purchase of qualifying energy-saving items until next year to be able to claim the credit.
7) While postponing income and accelerating deductions may reduce
6) The Energy Tax Incentives Act of 2005 creates new tax credits for certain energy-saving autos, consumer products and home improvements beginning in 2006. You may want to postpone any purchase of qualifying energy-saving items until next year to be able to claim the credit.
7) While postponing income and accelerating deductions may reduce
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
your "regular" income tax for 2005, these actions may backfire and end up costing you if you fall victim to the dreaded Alternative Minimum Tax (AMT). Why? Because taxes and miscellaneous expenses are not deductible in calculating AMT, and medical expenses are only deductible to the extent they exceed 10% of AGI. When preparing your projected 200
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
5 return be sure to determine if you will be subject to AMT and plan your strategies accordingly.
8) When preparing your projected return you should review the performance of your investment portfolio for the year. Add up all your realized gains and losses from actual sales of stock, bonds and mutual fund shares for the first 10 months of the year
8) When preparing your projected return you should review the performance of your investment portfolio for the year. Add up all your realized gains and losses from actual sales of stock, bonds and mutual fund shares for the first 10 months of the year
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
with separate net totals for short-term (held one year of less) and long-term (held more than one year) activity. Gains and losses from inherited property are always considered long-term. Include in the long-term calculation any "capital gain distributions" from mutual funds.
Now do a similar calculation for unrealized "paper" gains and losses o
Now do a similar calculation for unrealized "paper" gains and losses o
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
n the investments you still hold. You may want to sell some of your investments before the end of the year at a loss to wipe out year-to-date gains, or at a profit to take advantage of year-to-date losses in excess of $3,000.00.
There are no written in stone year-end tax planning rules that apply to all taxpayers in all cases. As with any other t
There are no written in stone year-end tax planning rules that apply to all taxpayers in all cases. As with any other t
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
ransaction, year-end strategies must be evaluated in the context of the special facts and circumstances of your individual situation. You may want to review your year-end situation with your tax professional.
And remember - your first criteria for evaluating any financial transaction you are considering should always be economic. Taxes are second
And remember - your first criteria for evaluating any financial transaction you are considering should always be economic. Taxes are second
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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