Expiring Tax Cuts in 2011
The Bush tax cuts are expected to expire next year causing tax rates to increase in 2011 and impacting capital gains taxes. The tax on capital gains will increase from the current 15% to at least 20% by next year. Additionally, the new 3.8% surtax on investment income of upper income filers may apply to you, raising the tax on capital gains to 23.8% as opposed to the 15% in 2010. And on top of that, the top tax braket for ordinary income (including short term capital gains) increases from 35% to 36.6% in 2011. For the upper incomers, it would actually increase to 39.6% + the 3.8% surtax totaling 43.4% in 2011. That’s just a synopsis of what is to come with the changing tax laws and it’s right around the corner.
Curve Carries Cloud to Dentistry
Cloud computing- simple idea, huge impact on your business. For those of you who are not familiar with this terminology, cloud or “internet” computing is Web-based software services via the Internet where the data and software are encrypted and then stored on centralized servers managed by the service provider. Think of online banking sites, email accounts such as Gmail or Yahoo! and the social networking site Facebook. These are examples of more trusted and familiar cloud computing services which millions of people already use. Cloud computing users are cost savers because they don’t need to spend loads of money on hardware, new software upgrades or support services; they only pay for as much capacity as needed! And best yet, these services are all accessible from ANY PLACE rather than just your onsite servers, by using only a browser and Internet connection!!
So what does cloud computing mean to you and your dental practice? Maybe you can answer that question after this brief introduction of Curve Dental. Curve Dental is a dental software company that delivers cloud computing, dental office management solutions via the Internet. Does accessing patient data more efficiently from anywhere at any time sound interesting? Read further about this leading dental office technology! With Curve, you can schedule, invoice, manage recall, manage insurance, chart, and more without confusing toolbars, but simple to use menus! Remember, it’s all accessed via the Web from any browser! To make things even more cookie cutter, all applications and updates for Curve are online so no need to dish out more cash in order to keep up with the regular improvements! You can also count on off-site back up and high security with Curve Dental Software which is hassle-free on your end! Want more reasons why switching to web-based software is the better deal? Click here http://www.curvedental.com/why_the_web.php
Price is typically a chief component asked about when a dentist is considering a new or replacement software system to manage their practice, so it’s important to know the WHOLE cost when investing in technical purchases like dental software rather than just the surface price tag. With typical dental software systems, there are numerous undocumented fees that are required to run the software properly and are ignored in the sale price. Be aware of these fees because they can increase the total cost of the software by double or more! You will find that some of these additional costs consist of data conversions, implementation fees, initial training and upgrade fees, new hardware, installation fees from IT staff, data backup fees, IT service costs for system maintenance, lost production associated with on-site training and computer software installation and the list can keep going! Unfortunately, the published price of the typical dental software systems includes only a fraction of the total cost. On the contrary, web-based solutions such as Curve Dental Software (“Curve Hero”) essentially include more costs in the price tag. An example would be, nothing being installed in the dental office and only through a web-hosted central server located in a Hardened Network Operating Center so again, nothing to install and only a web browser needed. This eliminates hidden costs for installation, configuration, etc. Remember, everything is done online!! Click here and find a summary of traditional dental software costs http://www.curvedental.com/dental-software/dental-practice-roi-calculator.php
If this summary attracts your interest in learning more about web-based dental software and how it can have a positive affect on your dental practice, you may find the following white pages enriching!
Disaster Planning for the Dental Office: http://www.curvedental.com/white-papers/Disaster-Planning-for-the-Dental-Office.pdf
Security of Web-based Systems: http://www.curvedental.com/white-papers/Security-of-Web-based-Systems.pdf
Uptime Comparison of Web-based vs Client/Server Systems: http://www.curvedental.com/white-papers/Uptime-Comparison-Web-based-vs-Client-Server.pdf
Five Risks with Traditional Backup for Dental Software: http://www.curvedental.com/white-papers/Five-Risks-with-Traditional-Backup-for-Dental-Software.pdf
Is Your Practice a Professional Association? Don’t Forget to File the Annual Statement
A Friendly Reminder: If your practice is incorporated as a Professional Association (PA), please remember to file your Annual Statement with the state of Texas. It’s very simple to do and once completed, you won’t have to file it again until next year! The due date to complete this is June 30, 2010. You should have received a form from the state, in the mail at the beginning of the year, but if you need another copy, you can locate it here: http://www.sos.state.tx.us/corp/forms/803_boc.pdf
Please fill out the form and send a copy to:
Secretary of State
P.O. Box 12028
Austin, TX 78711-2028
I hope you can find this reminder useful!! You know where to reach us if you have further questions! We are more than willing to help you!! ~Crystal
ADCPA Semi-Annual Meeting
Hi Everyone!
The ADCPA kicked off their 2010 semi-annual meeting in Virginia Beach, Virginia on Monday June 7! Our Firm’s partners, Robert Edwards and Lynn Ledbetter, are attending this enlightening three day conference to continue learning how to help YOU improve your practice!! They are gaining knowledge from numerous leading-edge speakers with dynamic speaking styles; and the two of them will bring home information about a wide variety of practice management topics other than accounting… profitability for establishing an efficient practice, new dental software programs, and dental economics, just to name a few! Check back for details!! ~Crystal
Introducing Crystal Trevino
Hi everyone, my name is Crystal Trevino and I am a new addition to our client relations department at R.T. Edwards and Associates, PC.
A little about myself, I grew up in the DFW Metroplex in a family of 6. In 2009 I graduated from the University of Texas at Arlington where I received my BBA in Marketing. I am also a returning 3 year veteran for the Dallas Cowboys Cheerleaders and am a huge fan of football! My family is very important to me so I love spending quality time with them every chance I get.
I am recently taking over the blogspot on our website so I can’t wait to begin sharing valuable information that you may find very informative and educational! You will come across a variety of topics on our new and upcoming blog such as investment strategies, practice sales, tax changing laws, deadline notices, financial advice, and so much more; as well as read opinions from our utmost financial planner, CPA and forward thinker, Robert Edwards himself!! You can follow me weekly and I can assure that you will want to keep reading more!! ~Crystal
Happy New Year
Hope everyone had a great Holiday Season and is now ready to make 2010 a better year. Good Riddance to 2009!
The Dallas Southwest Dental Conference is next week, starting Thursday morning at 10:00 (January 21st) and continuing through Saturday afternoon (January 23rd) at the Dallas Convetion Center. I would like to invite everyone to come by our Booth #920 (directly across from Patterson Dental) to visit with us. We take this opportunity each year, to visit with vendors and continue our search for new vendors to provide services to our clients. It is at the DSWDC that we make new contacts that will benefit our clients into the future. Please come by our booth to chat while you are in attendance. This is your opportunity to check out all the new products, build relationships and have a good time in a relaxed setting with your colleagues.
For those clients that choose to have us do your tax planning at the end of 2009, thank you. You have taken the first step toward getting control over your future. We will follow this up with several meetings over the course of 2010 to discuss practice issues and show you some ways in which you can practice more efficiently. This will translate into more dollars in your pocket and/or retirement plan.
In the meantime, let us know if we can do anything for you. We are constantly working on refinancing for our client’s loans, setting up retirement plans or just answering questions about the tax effect of buying new equipment. Keep in mind, we expect to see a lot of changes in the tax code this year. Stay tuned to this blog for further details, as they happen.
Stock Market
I am tired of all the people I hear complaining about how bad the stock market is doing. This is the best year I have seen in the market since 1999! Yes, the market was down 35% last year. Our client did a little better, about 30%. But this year, only through August 28th 7 of the 10 mutual funds into which we invest our client’s money are up almost 30%. That would be 45% on an annualized basis, which I am not saying will happen. But a 30%+ return is certainly something to sit up and take notice of. Look at it this way. If you don’t fund your retirement plan because you are afraid the market is going to go down, you are going to lose 28% to 35% on your money to taxes anyway, with no chance of a recovery. At least when you invest in the stock market, there is some chance of recovery down the road.
Tax Update
According to my most recent (August 7th) newsletter, it now looks like we won’t have a tax increase until 2011. And depending on how the health care reform shakes out, it may not be considered necessay to implement the 10% surtax on those with adjusted gross incomes in excess of $250,000. It is still not clear what Congress intends to do regarding depreciation deductions for 2010. As it stands now, the 50% bonus depreciation will expire at the end of 2009. And the deduction under IRS Code Section 179 (for new equipment purchases) will roll back to $125,000 (from the current $250,000), adjusted for inflation. This will affect those clients who are planning on starting new dental practices in 2010. As we continue to wind down the tax preparation season for the year, we are beginning to focus more on refinancing debt for many of our clients. This can often “free-up” enough dollars to completely fund a retirement plan. For those of you that want us to analyze your situation, give the office a call. We are trying to analyze all clients, but it is time consumming to get around to all approximately 300 dental clients. We will continue to do our best, but a phone call gets you to the top of the list.
Regarding the economy, a new survey of small and midsized CPA firms indicates that they see signs of economic recovery coming by the end of the year. Another survey of manufacturing and wholesale distributors sees the economy rebounding from the recession in late 2009 and early 2010. Good to know, huh? Together with the recent spat of articles in the news media, maybe we really are getting close to a turnaround. Now, if we can just get everyone back to work……….
Update of Tax Changes
As of May 15th here are more changes to consider when anticipating your taxes for 2009.
Some good news, believe it or not. In the true spirit of loopholes, the Obama administration has inadvertently lowered taxes on taxpayers that fall close to the upper limit of the 28% tax bracket for 2011. The way this works is the upper limit of the 28% bracket will move from $210,000 now to about $250,000 in 2011. So, the $40,000 between those two amounts will be taxed at 28% in 2011 compared to 33% today. Quit reading here if all you want is good news. The rest isn’t going to be pretty.
The income to be taxed at the new higher rates will be that above $250,000, not some lower amount which had been discussed previously.
The tax rate on capital gains will increase from 15% now to 20% in 2011, maybe sooner.
The phaseout for itemized deductions which is set to expire after the 2009 tax year, will be reinstated for uppers income earners in 2011 and later years. Right now it looks like there will be no phaseout of itemized deductions for any taxpayers in 2010. It also looks like the itemized deductions will not be allowed to reduce taxable income below the 28% tax bracket although there is a lot of political opposition to that proposal.
From a compliance standpoint, the President is proposing the corporations be forced to issue 1099′s to everyone, not just individuals, to which they pay more than $600 a year.
Independent contractors would be subject to withholding if they don’t provide a valid tax id number to the person for which they are providing services.
Employee leasing firms would be liable for unpaid payroll taxes, removing the employer from the burden of making those payments.
Estate taxes will be kept at this year’s level of $3.5 million. But estate planning will get trickier for those of you using the family limited partnerships for that purpose. The proposed rules include restrictions on valuation discounts for family limited partnerships making them less attrative to reduce the overall value of an estate.
The social security wage base is expected to remain the same for 2010, the first time since 1971 that the base amount on which social security taxes are assessed did not increase. In addition, there has been some talk of the social security tax rates increasing. This will not happen in 2011.
There has been a lot of discussion of the new sales tax deduction for new car purchases made between Feb. 16, 2009 and Jan. 1, 2010. The issue is the cap on the value of the new car on which the sales tax can be deducted. That cap is $49,500. Now, the IRS is saying they will allow the cap to be deducted for each car. Not just a single cap per taxpayer. So, if you buy two new cars this year, you can take the deduction for the sales tax on the first $49,500 cost of each vehicle, even if you don’t itemize.
That summarizes the most recent changes to the tax laws. But I am sure there will be many more proposals and we will try to keep you updated as they happen. As we approach the last half of the year, it will become more important to consider these changes in your tax planning meetings with us.
As always, please call us with any questions.
President Obama’s plans for April 15th
President Obama spoke at a White House event on tax deadline day and had plenty to say about the future of taxes in this country. He said that his administration is working toward “a simpler tax code that rewards work and the pursuit of the American Dream”. The President also noted that he has asked his economic advisors to throughly review how to simplify the tax code and report back to him by the end of this year. He further stated, “We need to simplify a monstrous tax code that is far too complicated for most Americans to understand, but just complicated enough for the insiders who know how to game the system”. “It will take time to undo the damage of years of carve-outs and loopholes. But I want every American to know that we will rewrite the tax code so that it puts your interests over any special interest. And we will make it quicker, easier and less expensive for you to file a return, so that April 15 is not a date that is approached with dread each year”. Political rhetoric? Certainly. Have we heard it before? Yes. But I have a feeling this President will actually try to do something about the tax code. Will he succeed? In my wildest imagination, I cannot imagine a revision of the existing tax code that would accomplish what he is trying to accomplish. I think he will have to scrap the existing system and initiate something entirely different to have a working chance of “changing” the system. If he is successful, it will enable those of us who become mired in the preparation of tax return preparation each year, to spend our time being more productive on behalf of our clients. And that is as it should be. So much of our time is now taken up by compliance work that is required by the government, that any actual productive work for our clients may get pushed to the back burner. As always, stay tuned for the changes as they happen.