Smile … New Tax Form Due Dates Are Coming

Changes, like teeth cleanings and taxes, are just a part of life, which is why you really shouldn’t be surprised to learn that many of the tax form due dates you have grown accustomed to are changing. And, if you want to avoid penalties, you will need to be ready to file your personal and practice’s tax forms on time beginning with the tax forms you file with the IRS next year (2017).

Visit Dear Drebit to learn more about the changes.

Have questions about how these due date changes impact your dental practice? Email the Bright Dental CPAs at Rea & Associates to learn more.

Even Superheroes Have Sidekicks – But Are They Taxable?

Does Your Dental Practice Need An Employee Or An Independent Contractor?

Employee Independent Contractor - Dental CPA

When you hire another dentist to assist your growing practice as a full-time employee you have more control over that individual’s profession. From establishing how many hours they will work to what responsibilities they will take on in their new role, in many ways it makes sense to bring on somebody who will help share the workload on a regular basis. But expanding your full-time work force comes with a variety of considerations on your end. Health insurance, space and equipment and insurance costs are all responsibilities that will fall on you as the owner and manager of your facility. Independent contractors, on the other hand, carry the responsibilities of managing these costs themselves.

The days are getting longer and warmer, and you are probably thinking about how nice it would be if you could pack up your bags and take off on a much-needed vacation. But alas, skipping town for a week or two means that you would have to close the practice for the duration of your holiday, which is simply not an option. Unless you have already figured out a way to clone yourself, the best solution may be to hire an associate dentist or an independent contractor who can help by taking on a portion of the work and can help cover for you when you are out of the office.

Read: Differences Between Employees and Independent Contractors

Whether or not you have plans to take a vacation this year, the simple fact is that there will be times where you simply won’t be able to make it into the office. Life happens. Business opportunities happen. And sooner or later something will happen outside of work that will require your attention. How will you handle that situation? You could hire another dental professional to join your team to help during those planned (or unplanned) absences. However, before you start accepting applications, make sure you have a clear vision of what you need from this person and whether it’s in your best interest to hire an independent contractor or an employee.

Define What Kind Of Help You Need

When you hire another dentist to assist your growing practice as a full-time employee you have more control over that individual’s profession. From establishing how many hours they will work to what responsibilities they will take on in their new role, in many ways it makes sense to bring on somebody who will help share the workload on a regular basis. But expanding your full-time work force comes with a variety of considerations on your end. Health insurance, space and equipment and insurance costs are all responsibilities that will fall on you as the owner and manager of your facility. Independent contractors, on the other hand, carry the responsibilities of managing these costs themselves.

That said, it may be easy to make the decision to hire an independent contractor only to fill in for you one or two days a week, but if you aren’t fully aware of how the Department of Labor (DOL) and Internal Revenue Service (IRS) classifies the two, you could be opening yourself up to a litigation.

Make sure you are clear on the characteristics between employees and independent contractors. If you continue to be unsure, reach out to financial professional for assistance.

Top 10 Questions To Consider Before Hiring

When determining whether that extra help should be classified as a regular employee or an independent contractor, ask questions that will identify who has control over this individual’s work-related behavior, finances and relationships.

  1. Will I have control over when, where and how this individual works or do they retain the majority of the control?
  2. Will I set the compensation rate of the individual?
  3. Will I need this person to fill in for a long period of time?
  4. Will I invest significant resources into the training and compensation of this individual?
  5. Will this individual be expected to exclusively work for my practice?
  6. Will I be responsible for paying employment taxes on this individual?
  7. Will I provide this person with any benefits such as insurance, retirement, vacation, and/or disability insurance?
  8. Will I retain this professional relationship for a long period of time?
  9. Will I require this person to be responsible for with key business activities?
  10. Will I have to provide guidelines to help govern how this individual will conduct themselves while working within my practice?

Did you answer “yes” to any of these questions? If so, there’s a pretty good chance that the person you are considering hiring will be an employee. But if you continue to have questions about their classification and your responsibilities as an employer, contact the Bright Dental CPAs at Rea & Associates to learn more.

By Dan Bialek, CPA (Mentor office)

 

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How To Get a Tax Credit for Health Insurance Costs

Tax Credit Health InsuranceYou may find it’s easy for you to focus on the effects of health insurance on your patients. But have you considered how the costs affect your own employees?  There are two certainties in life: We all know that can count on death and taxes. But rising health care costs are probably a close third on that list. A great way to offset that cost is to take advantage of the health care tax credit.

Who’s eligible for the health care tax credit?

According to the Government Accountability Office, in 2010 nearly 4 million small businesses were eligible for the credit, yet only 171,000 claimed it. If you’re concerned about missing out on this tax credit from prior years, you may be eligible to amend your tax return and still take advantage of the credit.

Is your dental practice eligible? 

If you employ fewer than 25 full-time equivalent employees, have an average annual compensation of less than $50,000, and pay at least 50 percent of your employees’ health care costs, then you are eligible for the tax credit. Don’t be scared off by the $50,000 limit on wages, as the calculation allows you to exclude owners, owners’ family members and seasonal employees. 

How much is the credit?

In 2012 it is up to 35 percent of the premiums paid, and in 2013, the credit increases to a maximum of 50 percent of premiums paid. Even better is that this is a tax credit, not just a tax deduction. That means every dollar saved by the credit goes directly into your pocket.

Concerned about your type of entity?

Don’t be. S-corporations, C-corporations, partnerships, sole proprietorships, and even tax-exempt organizations are eligible for the credit. So why miss out on this great opportunity to cut expenses and implement an effective dental practice management strategy.

Dental Practice Tax Help 

By now you may be asking yourself why you haven’t taken advantage of this tax credit. Don’t worry it’s not too late. Contact Rea & Associates. Our team of Dental CPAs can help you figure out what you might be eligible for, and how you can get some money back into your pocket, and ultimately improve your practice’s cash flow.

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