Ten Common Mistakes Young Dentists Make and
What They Can Do to Avoid Them
10. Trying to pay off student loans or other debt too fast.
Goal should be creating savings, not “getting out of debt.”
Taxes higher if no debt.
Principal reduction of debt is not deductible.
9. Doing their own accounting.
Spend your “free” time doing things you enjoy, not learning accounting.
Makes income tax preparation easier and less expensive because records are more reliable.
Cost is less than half the fee for a crown.
8. Not keeping business and personal financial transactions separate.
Makes income tax preparation more difficult.
Exposure to potential IRS adjustments in the event of an audit.
7. Doing their own payroll, including making payroll tax deposits.
Mistakes are costly.
Penalties can run 15% of taxes deposited late.
Outside services specialize in payroll and are not expensive.
6. Hiring friends or family or other inexperienced people to work in the dental practice.
Hurts practice to have inexperienced staff dealing with patients, especially front desk.
Hurts practice to have inexperienced staff dealing with filing insurance claims for patients.
5. Putting off setting up a retirement plan until out of debt.
Review different types of plans and establish one as soon as you start working.
Can retire in 20 years if save consistently.
4. Focusing too much on interest rates and not monthly payment when borrowing money.
Focus should be on cash flow, monthly payment.
Longer term loans are better for creating savings and lowering taxes
3. Not setting up the proper type of business entity. Partially depends on ownership of real estate.
2. Not setting up their business entity early enough.
Why incorporate? And when?
Current school of thought is to set up a business entity as soon as you start working.
Can begin funding a retirement plan.
Can deduct certain costs against the income generated from dentistry services.
1. Not setting up your “team” soon enough.
Attorney to review office lease, contracts, employment agreements, entity formation, etc.
CPA financial advisor to advise on setting up business entities, retirement plans, arrange financing and to review contracts from a tax perspective.
The deadline is Tuesday, October 15th. Please be aware: Monday, October 14th, is a USPS holiday in observance of Columbus Day!
For those of you who have already filed your 2012 tax returns, CONGRATULATIONS!
For those of you who still need to get that handled, the deadline is Tuesday, October 15th. Please be aware, however, that, Monday, October 14th, is a USPS holiday in observance of Columbus Day which means there are only 4 mailing days remaining. FedEx and UPS are qualified alternative shipping methods for any returns not being mailed to a PO Box. Returns sent by FedEx and UPS must be sent using overnight or 2 day service.
RT Edwards & Associates PC
In an effort to better service our clients’ needs, we have recently partnered with Eric Corcoran with ABG Services.
He will serve as our in-house source “FOR ALL THINGS” Insurance related. As an extension of our firm, Eric will be able to answer any questions you may have, and assist you in handling your insurance needs and requirements.
As you know, Eric is also our partner for credit card processing (MeritCard), so you may have seen his name in previous communication.
Since he has done a great job of serving our clients for merchant services, and since he can expand our firm’s knowledge and expertise in all areas of insurance, we have decided that the best choice to serve you as our insurance partner.
Please feel free to contact Eric with any questions on insurance and/or for a review of your current policies. In addition, he is always available to review your merchant services to see if he can reduce your rates or improve the level of service.
ABG Business Services
PLEASE LET HIM KNOW THAT YOU HEARD ABOUT HIM VIA THIS POST!
Please be aware that if you have issues that need to be resolved with the IRS, there are significant limitations currently to receiving a prompt resolution. The IRS was already greatly delayed in processing returns and refunds due to budget cuts and layoffs and now is almost completely on furlough. Your obligations as to tax laws and filing and paying deadlines remain unchanged and in place, but services from the IRS are severely limited.
“The government shutdown, which began Tuesday morning, has kept home an estimated 800,000 federal employees, including more than 85,000 who work for the IRS, according to the agency’s contingency plan. That leaves slightly more than 9 percent of the IRS staff on the job.” Read more: http://www.washingtontimes.com/news/2013/oct/2/irs-collecting-money-not-sending-refunds-during-sh/#.Uk2P1RgR_NE.email#ixzz2gfsvx8Mo
IRS Operations During The Lapse In Appropriations
No live telephone customer service assistance will be available and IRS walk-in taxpayer assistance centers will be closed. Automated IRS notices will continue to be mailed. The IRS will not be working any paper correspondence during this period.
How does this affect you?
• You should continue to file and pay taxes as normal. Individuals who requested an extension of time to file should file their returns by Oct. 15, 2013.
• All other tax deadlines remain in effect, including those covering individuals, corporations, partnerships and employers. The regular payroll tax deadlines remain in effect as well.
• The processing of paper returns will be delayed until full government operations resume. Payments accompanying paper tax returns will still be accepted as the IRS receives them.
• Tax refunds will not be issued until normal government operations resume.
What IRS services will be available?
For taxpayers seeking assistance, only the automated applications on the regular 800-829-1040 telephone line will remain open.
Health Care Exchange Notification Due to Employees October 1, 2013*
*New update: the Department of Labor decided, on Sept. 17th, that it will no longer impose the $100 penalty if you fail to notify your employees; however, we still recommend you share this information with your employees so that they are well informed. The October 1st deadline is no longer critical but is recommended or as soon as possible thereafter.*
The Affordable Care Act requires employers subject to the Fair Labor Standards Act (FLSA) to notify employees and new-hires of their coverage options under the new Health Insurance Marketplaces (“Marketplace”) (aka Health Care Exchanges) opening January 1, 2014.
If you have revenue greater than $500,000 and have one or more employees, you must comply with a new Department of Labor requirement. You must send a Notice to Employees of Health Insurance Marketplace Coverage Options. The effective date of this notice is October 1, 2013*.
The Exchange Notice must inform employees of coverage options and must include information regarding the existence of the new Marketplace (Health Care Exchanges) as well as contact information and description of the services provided by the new Marketplace. The notice must also inform the employee that the employee may be eligible for a premium tax credit if the employee purchases through the Marketplace and that the employee may lose the employer contribution (if any) to any health benefits plan offered by the employer if the employee purchases a qualified plan through the Marketplace.
This required notice must be provided NO LATER THAN OCTOBER 1, 2013*. The notice must be distributed in writing and may be provided electronically.
The Department of Labor (DOL) has given two options for the required notice:
1. The first model notice is to be used when the employer currently DOES provide a group health insurance plan. This notice can be found at: http://www.dol.gov/ebsa/pdf/FLSAwithplans.pdf. Note: IF YOU PROVIDE A GROUP HEALTH INSURANCE PLAN, CONTACT YOUR INSURANCE PROVIDER, THEY MAY PREPARE THIS NOTICE FOR YOU.
2. The second model notice is to be used when the employer currently DOES NOT provide a group health insurance plan. This notice can be found at: http://www.dol.gov/ebsa/pdf/FLSAwithoutplans.pdf.
Part A is general information, Part B you will need to fill in your Employer information. After adding all the employer information please save parts A & B to your computer. You can then distribute the notice to your employees by printing paper copies or providing email notification.
If you have any questions please contact your accountant. We will be happy to answer your questions if possible, or find out more information if needed.
Edwards & Associates