Tuesday, March 29, 2016

Should You Employ Your Children? What are the Tax Benefits?

Did you know? If you hire your children as employees to do legitimate work in your business, you may deduct their salaries from your business income as a business expense. This can be a substantial benefit for some as it allows you to shift part of your business income from your tax bracket to your child’s bracket. This can be a win-win situation for both you and your child. Not only does it allow your child to learn the value of work but it also provides them with insight on the family business. And, it’s a great tax deduction for you! You can pay your child under the age of 18 up to $6300 tax-free by taking the standard deduction. That’s money your child will have to spend on a car, college, clothes, gas, etc.
Here are some things you need to know
  1. Your child must be a qualified dependent.
  2. Pay real wages for real work, paying in pizza and still taking the deduction won’t fly with the IRS.
  3. The job must be age appropriate and salary should reasonable match job responsibility.
    Contact us for a list of jobs kids can do in a dental office.
  4. Document the job description and employee agreement. To avoid unnecessary scrutiny, maintain proper payroll documentations.
  5. Keep a timesheet of hours and day worked. This will help substantiate the amount of money received for work. It is good practice if the child deposits the paycheck in a bank account rather than cashing them as it shows the IRS the child took possession of the funds.
  6. Be aware of the tax requirements, payments for the services of a child under age 18 who works for his or her parent in a trade or business are not subject to social security and Medicare taxes if the business is a sole proprietorship or a partnership in which each partner is a parent of the child. However, children who employed by S Corporations or partnerships that include nonparent partners or corporations are not exempt. Also, payments are not subject to federal unemployment tax if the child is under 21.
If your child qualifies, you can avoid paying approximately 22 percent of their wages in tax. Before making the final decision of adding your child to payroll, consult with your CPA as the actual tax savings depends on your tax rate, your child’s rate, and the entity under which the business operates. For more questions on the benefits of employing your child contact us at 844-Dent CPA or visit our main blog page at  www.dentalcpas.com/news-events/.

Tuesday, March 22, 2016

How to Conquer Leadership Challenges

It’s always great to hear about young dentists starting their practice, establishing a new partnership, or purchasing an existing practice.  While some dentists are more comfortable with embracing the change and smoothly transition into their new roles, others have difficulties. Sometimes it’s hard being the new kid in town or one of the youngest members of your staff. Let’s face it; some people make the assumption that with youth comes lack of experience and regretfully, that can translate into a lack of respect. If you are a young dentist or new partner, it can take some time to establish your role of authority with another staff member who may have been around for 15+ years. Here are a few tips to consider for taking the lead:

  • Promote A Respectful Work Environment

    1. Always handle yourself in a positive manner; set the standard and hold all members of staff to it.
    2. Ensure that you and your partner(s) are on the same page before taking action on employee relation issues. All partners need to be willing and committed to making changes if the current staff cannot handle their positions. Without a mutual understanding, your attempts at change will be tested.
    3. When dealing with contentious issues, prepare yourself before approaching, it will allow you to have a clear mind and better handle any backlash.
  • Establish Yourself in a Position of Authority

    1. People will only treat you how you allow them to, so grab the bull by the horn and take ownership of your role. If you plan to grow with the practice and eventually become the owner, it’s never too early to start acting in the best interest of YOUR practice.
    2. Managing a staff of people who are older than you can be challenging, however, stand your ground is a respectful manner.
  • Be specific when addressing employees
    1. Broad or general statements give the employee room to come up with an excuse.
    2. Ensure manuals are updated and all staff members are aware of their role and responsibilities in the practice.
  • Hold Employees Accountable
    1. Review the portions of his or her job duties that are crucial steps in office operations.
    2. For example, if an employee is consistently failing to update health charts, have a direct conversation with that individual. Address that you have observed the job was not being done, stress the importance of the task to the patient’s safety and express that the problem will not be tolerated is no corrected. After all, patient’s safety is a top priority.
These tips are to get you started. We also recommend you doing some research on management styles and tackling leadership roles. For more information and articles on practice management, visit our blog page at /http://www.dentalcpas.com/news-events/