Is it a Dental Planning Retreat or a Vacation? What is the Difference?

I have another general dentist friend and we want to vacation together, but not necessarily hit a dental course together. We practice in the same space, but have separate corporations. Is there any way to take a vacation together and run it through our respective businesses?

If you're asking if a personal vacation can be deducted as a business expense...absolutely NOT!

It sounds like you're asking if a business can have a retreat away from their main location to discuss future planning strategies for growth, new equipment, new procedures, staffing, etc. If that's what you're asking...absolutely.

Big businesses send their top executives away all the time for those business-type retreats. They sometimes even include team building activities like golfing, etc.

Thanks for the great reply. Is there a minimum number for a retreat? I assume it is 2 or maybe 3 dentists or staff.

Thanks!

Nothing in the tax code I've ever read about minimums...it has to be "ordinary & necessary" and of course "reasonable" (that's my term, not the codes)....

Documentation is the key: who, why, purpose, agenda, goals, notes or minutes of meeting, etc...

This first appeared on Dentaltown.

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How to Make General Dentistry and Periodonist Combination Work in Dental Practice

Hi.

I need your help and guidance.

How can a GP and a periodontist enter into a fair agreement? I have been practicing for 21 years in a small FFS office. Current lease is up and moving into a new 6 OP office. He is a young up and coming periodontist. We both have similar goals and standards and believe that we can build and expand together.

Your input and advice is greatly appreciated....

Thank you

I think the periodontist will have a problem. Where do periodontists get their referrals from? Generally from GP's I imagine.

You're a GP. If you want to refer to a perio would you refer to one who shares an office with another GP or would you refer to one with their own office or sharing with other specialists that don't compete with you?

I think this "up and coming" perio will find it difficult getting referrals from other GP's. Then again, maybe you can keep them busy 3-4 days per week with your perio referrals. If that's the case then you can chat with someone who has done partnerships with other doctors and especially between GP's and specialists as they are a different breed of partnerships for sure.

I have a client owned by 4 docs, one pedo and 3 GP's. One of the GP's also does pedo and ortho. They have an ortho, OS, endo, perio, etc. They are open 7 days a week and service the complete family from A to Z.

All the doctors (owners & non-owners) are employees of the practice and get paid accordingly, no stark issues.

Unless the perio has interests in other locations (as the majority of the non-owner docs do in the example above) then it could work for him; however, I suspect ONLY with the patients the GP refers.

I can assure you that the GP's around the client I mention above do NOT refer to this group of multi-specialty doctors for their specialty referrals. They are referring to those specialists that have their OWN office so that the patients come back to them...hopefully.

So my point is that this GP/perio "venture" could work; however, I think the perio will need to have other work in other locations to feed their family.

He will be running the Hygiene and Perio in my office. We are trying to figure out what is a fair percentage on his perio production?

Generally 35-45% for perio. It’s usually closer to 40-45%.

As for what percentage on Hygiene? 10% - NOT more than 15%. Even that might be a stretch on their hygiene production. Remember, you have hygiene compensation, hygiene supplies and of course OH.

Thank you

This first appeared on Dentaltown.

Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com

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How Should a Dentist Account for a Third Party Finance Fee?

If a patient's treatment plan is $1000 and they use a 3rd party finance company like Care Credit, the total amount I receive is something like $900 (for example). How do you account for the "finance fee" difference?

Currently I enter $900 as payment received and enter $100 as a write off. Is there an advantage to doing it another way?

In QuickBooks you enter the deposit as a split transaction:

$1,000 to fee income, revenue, whatever you call it, and

$100 (or -$100) as collection expense

$900 is your net deposit.

It's that simple.

If that was your ONLY transaction for the day and you ran a P&L statement it would look like this:

Income 1,000

Expense 100

Net income 900

Make sense?

PMS should show $1,000 payment.

So, if I have only accounted for the NET credit card or Care Credit payment on my QB (which for me is all that counts from an accounting perspective)--then I have essentially done the accounting, right? In other words, I cannot go back and claim an expense for the processing/finance fee?

Correct, no double dipping allowed…

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Thoughts on Dental Start Up Consultants

I am wondering if you have had experience with startup practice consultants and if they are worth it.

Thanks a bunch!!

I can't answer your question specifically; however I can tell you we picked up a client in December who started from scratch in April 2010 and used a start-up company that professed to handle everything. I can't comment on how they did on the location search, design, forecasting, etc., however, I can tell you they completely blew it on their entity selection\income tax advice.

Because of their BAD advice this poor doctor will have to come out-of-pocket $15k in taxes on April 15th of this year instead of benefiting from a tax loss that would have allowed them to NOT owe anything in April. Cash is VERY tight for them and this is going to be VERY painful them. We’re actually going to take some steps to alleviate the pain down to maybe $8k-$9k after the fact; still, it's not a pretty picture.

Make sure you consult with YOUR CPA when it comes to entity selection and income tax issues.

Tim, Thanks for your reply.

Regarding business entity -is there anything better than going forming a PLLC and doing the s-election?

It depends on the situation.

Did they make him a corporation? What went wrong?

They created the LLC then elected S-Corp status, and were suggested that the doctor take a salary too! Total loss was at least $50,000 which was created in part by the $30,000 in W-2 the doctor took. So not only could the doctor NOT use the loss to help offset the $30,000 that they took to help create the loss, they paid payroll taxes on the $30,000 as well....just plain dumb. Had the consultant suggested keeping the bank loan in the doctor’s personal name that would have been acceptable from an income tax perspective. Either way, the doctor is personally liable on the loan.

This appeared on Dentaltown.

Send your questions to Tim Lott, CPA, CVA at tlott@dentalcpas.com

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