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 info@dentalcpas.com 

Dental Multi Specialty Practice Set Up

Hello

Any input would be helpful on the best way to set up a multi specialty partnership.

I want to have all the funds go into one pot for Endo, Oral Surgery and Periodontics. So all the collections for each go in one pot and all overhead is paid out then what ever each collected gets paid on that percentage.

I realize they are all different overheads but if combing them all in the end to come out ahead and make more money than trying to break it all up.

Each specialist will own equal share of the partnership as well.

Any advice on what you have experienced?

Thanks for the help.

About 15 years ago I had an orthopedic group as a client, 4 doctors, one was a hand specialist, one was knee, one was hip and one was back\neck (as I recall).

Anyway, I thought the way they handled it was very easy and straight forward. Basically each had their own entity and they created a 5th entity (which each was an owner) which was simply a joint checking account (to keep it simple).

They made an initial capital contribution into the joint checking account to fund the opening of their office and they prepared an operating budget based upon the common or shared expenses, like rent, front desk labor, x-ray tech, shared nurses, common supplies (casting material, bandages, ace wraps, etc.). Each month they funded their equal share into that joint checking account (the 5th entity) to fund those expenses.

Each did their own billing, paid for their own specialty material (knee implants, hip implants, crutches, slings, finger splints, neck braces, etc.) and paid for their own labor in addition to the shared nurses (personal secretary, etc.)

The system worked very well for them, they kept it simple and clean.

This first appeared on Dentaltown.

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

For more information or to sign up for our newsletter, please contact arose@dentalcpas.com

Follow us on Twitter, Facebook and Pinterest

Dental Partnership Questions

We are in partnership for 8 years now and no major disagreements yet! However, there have been changes since the partnership began and the issue of the share of rent has only arisen since the joint ownership of the building and the decrease in working of hours my partner. At what level do you generally suggest an option out if he continued to significantly decreases his hours in the years ahead?

Thanks and great question.

I’ve generally used days or hours worked, NOT a production based threshold. For example, if both partners are working 36 hours per week on average, the threshold might be 18 hours (50% of the other partner). Meaning, once one partner is working less than 18 hours per week on average, they should NOT be an owner. Could be 24 hours (or 3 days) if you wanted to make it more stringent. There could be other financial disincentives to decreasing hours as well, a lower percentage of the hygiene profits (less then 50%), if an association is brought in, a lower percentage of their profit.

Maybe below 24 hours they simply get percentage of their collections, say 45%, below 18 hours they must sell.

Again, I like to keep it simple, however, I realize that sometimes there may be a need for multiple thresholds.

If you have an associate do you split their income 60/40 (for example)?

Again, try to keep it simple. One way to look at the associate, specialist, etc. is that any NET profit they generate is simply THEIR contribution to the OH. Therefore, the total OH that is being split, shared, allocated is less for the owners. How ever you've decided to split OH or profits will automatically include the NET profit of those profit centers.

If you sublet that would simply reduce your rent expense if you share that 50/50.

This post originally appeared on Dentaltown.

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

For more information or to sign up for our newsletter, please contact arose@dentalcpas.com

Follow us on Twitter, Facebook and Pinterest