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Dental Tax Preparation To Do’s

As we approach the deadline to file corporate tax returns, you’re probably gathering information to give to your dental CPA. Do you have a list that you always use to help remember what to send? Or do you submit a QuickBooks file and let your CPA deal with everything? Whatever the case may be, here are some tax preparation steps you should take before meeting with your dental CPA.

1) Value your investment. Before you send your documents to your tax preparer, consider the value you get from him or her. Are they asking questions? Are they engaged year-round? Are they responsive? Do they know the dental industry? If you answered “no” to any of those questions, you might want to consider looking elsewhere instead of getting stuck in the “same as last year” routine.

2) Fast in … fast out. The sooner you get the information to your dental CPA, the sooner you will get your return completed. This oftentimes means a tax refund could be in your pocket a lot sooner. Don’t let the IRS hold your money when you could be earning interest on it. Why wait? Get your information in now!   

3) Categorize expenses properly in QuickBooks. Rather than just submitting a QuickBooks file and taking a back seat to everything, be sure you’re categorizing expenses properly, so your CPA can take full advantage of all available tax deductions. Did you know you can fully deduct meals and entertainment expenses that are used for the office? So the next time you have a staff meeting with lunch, be sure not to code this to the traditional meals and entertainment line item. By creating a new category in QuickBooks, your CPA will take the full deduction for the expense, which ultimately puts more money in your pocket. 

4) The forgotten deductions can add up. 

  • Are you paying city taxes on corporate profit?
  • Are you taking mileage or actual auto expense deductions?
  • Do you manufacture your own crowns?
  • Do you entertain referral sources or other business connections on the golf course or at a restaurant?
  • Do you pay for any business expenses personally instead of through the corporate bank account?

If the answer was “yes” to any of those questions, consult with your tax advisor to make sure you are taking full advantage of the tax deductions available for these expenses.

5) Schedule a meeting with your dental CPA.  Instead of getting your completed tax return in the mail and filing it away, try something different this year. Have your accountant walk you through the tax return and also discuss other business issues or concerns you may have.  After all, your accountant should be one of your most trusted business advisors.

Contact Our Dental Practice Professionals

Tax season is upon us. Don’t wait until the last moment to file your corporate tax return. Contact Rea & Associates. Our team of bright dental CPAs can help you get your taxes filed smoothly and ensure you are not missing any deductions for your dental practice.

Why Do You Need A Dental CPA When Buying a Dental Practice?

Are you looking to purchase a dental practice? Have you talked with your Dental CPA about it yet? Many times when a dentist’s decides to buy a dental practice, the Dental CPA is not brought in early enough to help with the process and ensure everything goes smoothly. There are many considerations that need to be made before purchasing a practice.

Things to Consider When Purchasing a Dental Practice

  • Understand the dental practice’s compensation structure. You want to make sure you understand and are aware of the dentists’ salaries, as well as the dental assistants’ and also the salaries of the office staff. You also need to find out what family members are on the payroll. Your Dental CPA will be able to review these numbers with you to make sure there is nothing missing or anything you should be aware of.
  • Review of retirement plans. Retirement plans come in a variety of shapes and sizes. What works best for a dentist that is retiring soon may not be best for a younger dentist. These are things to consider to make sure the proper plans are in place or if you will need to make adjustments. You will want to be prepared for any changes that will need made.
  • Understand the fringe benefits. What benefits are offered to the practice’s employees beyond medical insurance? Meals, entertainment, automobile expenses, etc.? These are all items that need to be discussed before the practice is purchase. You will want to know the additional costs for running the dental practice and review them to see if you need to make any changes.
  • Understand the value of the dental practice. Your dental CPA can review this with you and determine what the true price is for the dental practice to make sure you’re not over paying.
  • Interview the seller and the dental practice staff. As a buyer, it is a good idea to meet with the staff of the dental practice you are looking to purchase and also the seller. You want to make sure they are able to answer questions you may have. Also, make sure the seller is willing to be available after the purchase to help you settle in and make introductions to contacts, clients and referrals.
  • Be prepared to hire new staff. Before making the purchase, review the staff and see who may need to be replaced. Some staff members may have been family. This is seen a lot of times with bookkeepers as they may have been a family member or the owner themselves.

Purchasing a dental practice is a big decision that takes a lot of research. Don’t bring in your dental CPA too late. They can help you do the necessary research and be able to provide you with a clearer picture of what to expect when purchasing a dental practice.

Contact Our Dental Practice Professionals

Are you looking to purchase a dental practice? If so, contact Rea & Associates. Our team of bright dental CPAs can help you make the most informed decision when deciding what practice to purchase.

Do You Need an Insurance Review?

When you purchased your dental practice, you probably met with your insurance agent to discuss your basic insurance needs. You may have purchased your malpractice and overhead insurance at that time as well. That was probably 10, 15, or maybe even 20 years ago. Have you reviewed it since then?

Or are you a part shareholder in a multi-dentist office?  Your original buy/sell agreement included insurance policies to protect the shareholders and families, but could there have been changes in those policies that you are not aware of?

Is Your Insurance Policy What You Need?

You may think that you have the protection you need to protect your family, business and associates.

But do you?  The only way to be sure is to have your policies reviewed.  There have been so many changes in the insurance designs and structures that you may be wasting money on policies that you don’t need or you may be risking liability by not having enough coverage.

Time for an Insurance Review

We recommend you have an insurance review to ensure that you’re covered efficiently and you’re not throwing your money away.  Plus, there are new policies that may cover more or there may be a better structure to cover your basic needs. Insurance is an expense no one likes spending money on, but is glad to have it when the need arises. Reviewing your insurance policies for yourself and your dental practice gives you peace of mind that you have what you need at the right price.

Contact Our Dental Practice Professionals 

Contact Rea & Associates for a free insurance review to ensure you have the coverage you need for your dental practice at a fair price. Our team of bright dental CPAs will make sure you are not missing coverage you need and verify you area not paying too much.

Ohio Sales and Use Tax Impact on Dentists

Should you be charging your dental patients a sales tax for your services or products? This may be a question you have asked yourself since opening your dental practice. The answer is: it depends.

Charging Sales Tax on Products Sold

Depends on what? When talking about charging sales tax on a product, we generally think about a retail business.  But dentists need to think about this too.  If you’re  selling a toothbrush, floss or other over-the-counter tangible products, sales tax should be charged to your patients and then remitted to the state of Ohio.  Conversely, if the product is being sold with a prescription and is not available over-the-counter, there is a special exemption that allows you to sell the product without charging sales tax.  An example of this would be prescription mouthwash that’s not available over-the-counter and is being prescribed to a patient.

Paying Sales Tax on Products Purchased

Likewise, you also need to remember to pay sales tax on items you purchase for your dental practice that are subject to sales tax.  Some of these items may include:

  • Office supplies
  • Dental supplies
  • Lab supplies
  • Invisalign
  • Computers
  • Equipment

If these purchases are made online or from out of state vendors who don’t charge sales tax, use tax should be paid.  Also, if you’re not paying sales tax on one of the previously mentioned taxable services, use tax should be paid.

Paying Sales Tax on Services

As for general dentistry, those services are not taxable for sales tax purposes.  However, that doesn’t mean all services are tax exempt in Ohio.  You should still make sure you’re paying sales tax on the following services for your dental practice:

  • Lawn care or landscaping
  • Building maintenance and janitorial services
  • Repair of tangible property
  • Laundry and dry cleaning services
  • Snow removal services
  • Storage of tangible personal property

Contact Our Dental Practice Professionals

So, what should you do if you are not paying sales tax or use tax when you should be?

The state of Ohio currently offers a voluntary disclosure agreement program that could substantially reduce the amount of exposure and penalties that you may owe.  Contact Rea & Associates; our team of bright dental CPAs can provide more information about the voluntary disclosure program and other ways to ensure you are complaint with the ever changing sales and use tax laws.

Related Topics:

Understanding Ohio Local Tax Obligations

How Sales & Use Taxes Apply to Ohio Dental Practices

How To Get a Tax Credit for Health Insurance Costs

Rea & Associates, Inc. | Bright Dental CPAs | 7201 Center St, Mentor, Ohio 44060-4858
phone + 440-266-0077