Thursday, March 16, 2017

At a Glance: Important Tax Deadlines for March and April

According to a recent study on dental practice seasonality trends, March and April are among the busiest months of the year. Does this sound like your dental practice?
If so, you’ve no doubt also noticed this coincides with tax season. To help make your busiest months a little easier, here are the tax deadlines for March and April.
March 15
Dental Partnerships should File a 2016 tax return (Form 1065). Provide each partner in your dental practice with a copy of Schedule K-1 of Form 1065, or a substitute Schedule K-1. To request an automatic 6-month extension to file the return and provide Schedules K-1, use Form 7004 to extend your filing deadline to September 15.
Large Dental Partnerships (100+ partners) should file a 2016 tax return (Form 1065-B). Provide each partner in your dental practice with a copy of Schedule K-1 of Form 1065-B, or a substitute of Schedule K-1. This due date applies even if you request an extension of time to file Form 1065-B by filing Form 7004. To request an automatic 6-month extension and move your filing deadline to September 15, use Form 7004.
If your dental practice is structured as an S-Corporation, file a 2016 income tax return (Form 1120S) and pay any tax due. Provide each shareholder with a copy of Schedule K-1  of Form 1120S, or a substitute of Schedule K-1. To get an automatic 6-month extension of time to file, use Form 7004 and pay what you estimate you owe on your return.
If your dental practice is electing S corporation treatment beginning with calendar year 2017, you should file Form 2553 (Election by a Small Business Corporation). If you file Form 2553 late, S corporation treatment of your dental practice will begin with calendar year 2018.
March 31
File the following forms with the IRS if they apply to your dental practice. Note that a deadline of March 31 for these forms only applies if you’re filing online.
  • Form 1098 (Mortgage Interest Statement)
  • Form 1099 (Self-Employment Income)
  • Form 3921 (Exercise of an Incentive Stock Option), and
  • Form 3922 (Transfer of Stock Acquired Through an Employee Stock Purchase Plan)
April 18
Dental Corporations should file a 2016 income tax return (Form 1120) and pay any tax due. To request an automatic 6-month extension of time to file, use Form 7004 and pay what you estimate you owe on your return.
You should also deposit the first installment payment for your 2017 estimated income tax.
If you’re not already working with Dental CPAs for your practice’s tax planning, contact us today. We can help manage your tax liability and reduce your stress during your busiest months.
For more information, contact out DentalCPA team at 844-DENT CPA (336-8272) or email 

Wednesday, March 15, 2017

Are You Ready For Tax Season?

If you haven’t already, it’s time to skim through your tax documents to ensure you are well prepared for filing. Here are some important items to remember:
  1. Check your records for invoices of single item purchases of more than $2500. These fixed assets need to be capitalized. Review your invoices to make sure nothing is coded as an asset that should be an expense or the other way around.
  2. Gather all your year-end loan, bank, and credit card statements so you can tie down balances as of 12/31.
  3. Review receipts of meals and entertainment to see if anything should be coded to employee expenses. Often, there’s a good number of items that are really lunch for the employees which have a great tax benefit.
  4. Review your records of gifts distributed in 2016. Gifts that were either for marketing or employee purposes should be correctly coded for them to potentially be considered a deductible expense.
  5. If you participate in an employer match program, ensure that all payments are made before you file your return.
For more information or answers to questions specific to your practice's situation, call our office at 844-DENT CPA(336-8272).

Tips for Entering Your First Practice

You are out of school, and it’s time to begin your dental career. Where will you start? Have you found a place to work? As multiple questions run through your head, let’s discuss some tips that will help you navigate through the “what’s next” phase so you can start in the right direction.
Gain Experience
Working for an existing practice will help you gain the experience you need to develop your skill sets as well as well help to build relationships with patients without the concerns or challenges of a business owner.
Do Your Research
When researching the best place to practice your associateship, it’s important that you take your time so you can find a practice that is a good fit.  Don’t rush into an agreement if there are any uncertainties. Here are a few examples (not comprehensive) of what you should be discussing during the interview process:
  • Clearly communicate your income goals
  • If you’re interested in purchasing the practice down the line, share your intentions
  • Be honest about your skill sets and comfort level
  • Inquire about the mentoring dentist’s clinical philosophy. Will you be expected to follow his or her guidelines fully?
In order to find a good fit, open communication is essential. After covering your key areas, the mentoring dentist should also clearly communicate his or her expectations. Such as production goals, required schedule, transition plans, compensation, as well as the role you are expected to play in relation to the staff. Again, these are only a few examples; you should seek as much clarification as you need to confidently make a decision.
Begin Your Journey with an End Goal in Mind
Do you plan to own your own practice someday? Speak with your potential employer about the possibility of buying into or purchasing the practice in the future. Negotiate a guaranteed salary when you begin work at the practice.  After nine months discuss basing your salary on the amount of business you bring to the practice.
Take Time to Consider Location
Pay attention to the location of the practice in which you are considering for your associateship. Ultimately, of you plan on owning the practice, its location will determine your future patient base, and how your revenue stream will look.
Develop Your Team
Begin relationships with bankers, CPAS, investment broker, attorney, and insurance agent as well as dental brokers. It’s never too early to establish a strategy with a team of advisors that can help you elevate to the next stage of your career. Also, building relationships with other employed team members can be beneficial later on in your career.
Have a Plan
The key to successfully transitioning out of dental school is to have clear vision of the direction in which you want your career to go. With any professional journey, obstacles are inevitable. By having clear goals and a long term plan in place, you will remain on track for a successful future.
For more information, contact our office at 844-DENT CPA (336-8272) or 
Note: The content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.

Wednesday, December 7, 2016

End of the Year Tips to Minimize Your 2016 Taxes

As many dentists know, the upcoming year end is always the time to consider minimizing your taxes. Here are a few tips from the CPAs at the Dental CPAs.

  1. Maximize your contributions to retirement plans. Contribute more to your 401k by the end of the year to reduce your taxable income and your tax bills.

  1. Consider using a credit card to prepay expenses that can generate deductions for this year such as supplies. 

  2. If possible, defer your income. Take capital gains in 2017 instead of 2016.  This move only will be beneficial if you think you will be in the same or a lower tax bracket next year.

  1. Consider bonus depreciation, it’s a way to write off the cost of an asset purchased for business use. The Section 179 2016 deduction limit is $500,000, which can be used on new and used equipment and off-the-shelf software. To qualify for the deduction, the equipment must be financed or purchased and put into service by the end of the day on December 31, 2016.
Remember to keep records of the equipment or software purchases that you plan to claim for the Section 179 deduction, including where it was purchased, the date it was acquired, and the date it was placed into service.

  1. Give away your money. If you were planning to give a lot of money to someone, utilize your annual gift exclusion of $14,000. This is not an income tax savings strategy but rather is an estate reduction strategy.  If you are concerned about having a large taxable estate, don’t miss the opportunity to utilize your annual gift exclusion each year.

  2. Finalize your records. If you plan to deduct mileage on your personal car, make sure your mileage logs are complete.  Review how long you need to keep your paperwork before throwing out any records.
  3. Sell investments such as stocks and mutual funds to realize losses. Then use those losses to offset any taxable gains you have realized during the year. Losses offset gains dollar for dollar.

  1. If possible, contribute the maximum to your retirement account ($18,000 for 2016, $24,000 if you are age 50 or over). These accounts can grow to a substantial sum because they compound over time free of taxes.

  1. Fund your IRA.  If you cannot make a deductible IRA contribution, consider whether you should make a non-deductible IRA contribution as it could become a possible future Roth IRA conversion for retirement or estate planning purposes.  You have until APRIL 15, 2017 to make IRA contributions for 2016 but the sooner you get the money into the account, the sooner it has the potential to start to grow tax-deferred.

  1. Do an alternative minimum tax (AMT) analysis. If there’s a chance that you will be subject to AMT, analyze your deductions to see if you are better off waiting to make some of the above moves. Once AMT comes into play, some of the end of the year tax moves will have no tax benefit.  Deductions such as state income taxes and real estate taxes are always an AMT deductibility issue.

Monday, November 14, 2016

Get Your Education On!

Get Your Education On!

Have you ever wondered what you need to know about the financial operations of your practice? Have you ever wondered what you should be looking at and monitoring when it comes to your practice numbers?  Well, you can stop wondering! Next month, our very own Lance Jacob will be teaching dentists on Dentaltown about these very issues, and you can learn as well.

Lance prepared a video course for Dentaltown that qualifies for CE, and the topic is “Improving Patient Care by Improving Practice Performance”. Let me tell you a little about it and some of the things you’ll learn.

Viewers of the course will gain some insight on what they need to be looking at when it comes to the operational performance of their practice and how their practice financials can aid in that insight. You’ll learn some of the key performance indicators you should be calculating and how to interpret the results. You’ll learn about what our latest performance statistics showed so you can compare your practice with those results.

Lance will discuss production, production adjustments, collections, production by provider, etc. This will include various revenue ratios you should be looking at and what the typical GP practice looks like as it relates to these ratios.

Lance will also talk about practice overhead for a GP practice and things you need to know about overhead specifics and what our survey results showed about the average overhead statistics for a GP practice.

If you’d like to get your education on, schedule an hour to view the course then login to Dentaltown today and begin learning. Lance's CE course will be available the first week of December. 

If you’re not a member of Dentaltown you should be, their motto is “You’ll never have to practice alone again!” Sign up and become a member so you can view this course and many other’s a one-stop shop for much of your CE needs. The forums board is incredible with forums on just about every practice topic you can think of so you can get feedback from dentists just like you as well as other dental related consultants and experts.
For more information on accessing this CE course or to set up an appointment for a consultation on improving your practice's performance, please give us a call at 844-DENT-CPA, or visit 

About Lance Jacob
Lance Jacob is a Principal with Naden/Lean, LLC. He provides accounting, tax, and consulting services for individuals and businesses which include dentists, other healthcare providers, retail, and equine. With his equine clients, Lance works to ensure they are in compliance with the federal, state, and local taxing authorities with respect to employment, business tax and reporting issues.