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.