Is your dental practice an S-Corp? If so, each year you face the challenge of determining how much you should pay yourself in W2 income verses how much should flow through to your tax return as passthrough income.
Dental Practice Financial Planning
If you’re a practice owner with a 401k, Cash Value, or Profit Sharing Plan, now is the time to look at your employer contributions to the plan. Defined benefit, discretionary matches, and profit sharing contributions are based on last year’s compensation numbers.
As a Dental Practice Owner, you have a huge advantage over a typical employee in your ability to fund a retirement plan, and the tax benefits are significant. "Uncle Sam" is helping you fund your retirement in the form of tax deductions.
We love it when clients maximize investments in your tax-advantaged plans. For 2020, some maximum contribution limits changed and others did not. Here’s a quick listing of maximum contributions for various types of retirement plans:
No change for 2020:
If you have recently remodeled your dental practice, built out a leased space, or constructed a new building for your practice, you might want to consider having a Cost Segregation study done to maximize the tax benefits related to the project.
Managing cash flow is key to being a financially healthy business. Most dentists know their monthly cash flows, with a keen awareness of when payroll, credit cards, rent, labs and the other big bills are due each month. But managing cash flow is not just about increasing next month’s production or reducing expenses.
It's the time of year to be thinking about year-end deadlines. Here’s a quick checklist – not all-inclusive, but hopefully helpful:
The hurricane has me thinking about how to be prepared for emergencies. I imagine families trying to contact each other, computers and file cabinets under water, and businesses unable to function. If you are somewhere that was not impacted by the hurricane, use it as a motivator to be prepared should a disaster hit closer to home.
I received an email from David Harris at Prosperident offering free access to their Embezzlement Risk Assessment Questionnaire for free through the end of August. This is a quick (15 minutes or less) online questionnaire that allows you to analyze if a staff member's behavior is consistent with embezzlement.