After much anticipation, Congress has turned its focus to reforming our nation’s complicated tax code. It is important that the veterinary profession be considered in any changes to the tax code – and for this reason, the AVMA recently sent a letter
to the U.S. Senate Committee on Finance and the U.S. House of Representatives Committee on Ways and Means highlighting key tax provisions of importance to veterinarians.
Because many veterinarians are also small business owners, AVMA is asking Congress to maintain and implement small business-friendly tax policies, including:
- Continued use of the cash method of accounting for small businesses, which allows veterinary practices with revenue under $5 million to book revenue when they receive the money and expenses when they spend money.
- A lower tax rate for pass-through entities, such as limited-liability companies or S-corporations. Many veterinary practices fall into one of these categories.
- Expanded flexibility of health savings accounts and flexible spending accounts, coupled with preservation of the current tax exclusions for employer-provided medical and dental plans. This would provide veterinary practice owners more flexibility in offering healthcare options to employees.
AVMA also is urging Congress to address important tax provisions that would help veterinarians manage student debt. One of our key requests is that Congress exempt awards granted under the Veterinary Medicine Loan Repayment Program from withholding taxes.
Additionally, the AVMA letter asks Congress to eliminate taxes on loan forgiveness related to income-driven repayment programs. Currently, veterinarians can receive loan forgiveness on remaining debt following 20-25 years of income-driven repayments, but the remaining balance is taxed as income. We encourage Congress to make this balance tax-exempt, and also to consider other options for using tax reform to relieve student debt.
As tax reform moves forward, the AVMA will remain in frequent conversation with Congress to encourage policies that support veterinary professionals. To learn more about our ongoing work on this policy issue and others, visit our advocacy page.