Self-Employment Taxes and Professionals

self employment taxOn January 17th, the Tax Court issued an interesting memorandum decision addressing self-employment tax liability. Hardy v. Comm’r, T.C. Memo 2017-16, 2017 Tax Ct. Memo LEXIS 17 (Jan. 17, 2016). In Hardy, a clever structure limited the self-employment tax exposure of a plastic surgeon.

Dr. Hardy operated his practice through a single-member professional limited liability company managed by his wife. Hardy, 2017 Tax Ct. Memo LEXIS 17 at **3. Some of Dr. Hardy’s surgeries were conducted at a facility known as the Missoula Bone & Joint Surgery Center (“MBJ”). Id. at **1. MBJ was a limited liability company organized by a group of physicians to own and operate a surgery center; it was treated as a partnership for federal income tax purposes.… Read More