tax audit

Tax Audit Representation for Dentists

What is a Tax IRS Audit?

An IRS tax audit is a formal review of your business’s financial record by the IRS. It can be conducted through mail or an in-person interview by one of the IRS auditors.

Some businesses are picked randomly by the IRS as their sampling process. While others may trigger a tax audit if there are errors and loopholes in the filed returns.

Either way, your dental practice should be ready for a tax audit at any time. Also, it’s important to remember that the IRS may find any loopholes in your back taxes. So, you should keep your bookkeeping records intact for at least six years as guided by the IRS.

How Does a Tax Audit Work?

An IRS audit is initiated through an official mail. You’ll never get a telephone call as an initial process.

Then, the IRS will share its findings regarding your tax returns. It may require more information, documents, proof of expenses/income, and other records to satisfy your returned taxes.

Once the IRS receives additional information, it will announce its verdict. If it is satisfied with your provided information, there is no more work.

In other cases, you may disagree with the IRS announcement as it may ask for more tax payments including interest, penalties, and back taxes to be paid.

This is where you can use your right to appeal an IRS audit result for your dental practice.

Who Can Represent you in a Tax IRS Audit?

By law, anyone can represent you in a tax audit against the IRS. You can do it yourself or through your tax preparer. However, you’ll need a professional who can handle the matter in front of the IRS committee.

Enrolled Agents (EAs)

EAs come with unlimited audit representation rights. They are skilled and qualified professionals who can represent your case against the IRS audit results.

Tax Attorneys

Tax attorneys are well-versed in court matters. They are a good choice if you feel your case would require significant backing from an experienced law professional.

Dental CPAs

Dental CPAs come with professional qualifications and experience in working with dental practices. They can prepare your taxes, file them, and represent you in a tax audit with unlimited representation rights.

Why Use a Dental CPA for the Tax Audit Representation?

A dental CPA has the professional qualification to be your tax preparer, practice management consultant, and financial advisor.

Moreover, a dental CPA has expertise and experience in working with dental businesses. It means a dental CPA comes with the added advantages of understanding your industry.

Therefore, a dental CPA is an ideal choice for you if you need a representation in an IRS audit. As both parties would have collaborated on tax matters already, explaining and offering proof to the IRS would be easier.

Dental CPAs also have unlimited audit representation rights. Therefore, you can feel comfortable when working with a dental CPA for a tax audit representation.

How to Prepare for a Tax Audit?

Although IRS tax audits are rare, you may find yourself in that position occasionally.

Here are a few steps you should consider if your dental practice receives an IRS tax audit mail.

  • Understand the scope of the IRS audit. It can be a limited mail audit that may require additional information only. A field audit may require additional information as well as documents.
  • Prepare your audit response by consulting a professional like a dental CPA. You should gather any missing documents and transaction proofs that IRS requests.
  • You may need to gather additional documents from other firms like banks, suppliers, and vendors.
  • Submit your audit response within the allotted timeframe.
  • If the IRS does not find it satisfactory, you may consider appealing the IRS verdict.

Appealing the Audit Decision

There are a few responses that you can choose depending on the type of audit verdict. In simple words, each type of appeal depends on the severity of your tax audit results.

Formal Appeal

A formal protest or appeal lets you represent your case in front of the IRS review committee. Your audit representative can your case here.

Mediation

If there are a few disputes, you can choose the mediation process. It lets you settle the audit objections quickly without escalations.

Small Case

If the IRS imposed additional taxes and penalties of less than $25,000, you can use this type of appeal. However, the IRS must accept your application to follow this route.

Offer in Compromise

You can negotiate your tax penalty and due taxes with the IRS. It is an agreement between your dental practice and the IRS where both parties would agree on a settlement that is less than the original due amount.

Learn more with a consultation today. New clients are welcome.

dental practice consulting services

Dental Practice Consulting Services

Dental Practice Consulting Services

Dental practice consulting services can help you grow, achieve profitability, and reduce your workload.

The prime task of a dental practice consultant is to create a winning plan for you by understanding your needs.

Let us discuss what are important dental practice consulting services and their benefits.

What are Dental Practice Consulting Services?

A dental practice consultant offers a wide range of services. You can expect to receive advice on management, accounting, financial, and leadership skills to name a few.

The prime job of a dental practice consultant is to offer business management and leadership advice to you. The services offered by a dental practice consultant should focus on achieving these objectives.

Evaluating Your Practice Management

You may already have a practice manager but still left with some questions unanswered. For example:

  • Do you need to spend more time on the business side of your practice than required?
  • Have you set clear objectives in terms of profitability, efficiency, and growth?
  • How do you plan to transition your practice in the long term?

In short, questions like these and more are linked with the strategic planning for your dental practice.

So, a prime dental practice consulting service will be to examine your existing scenario. The same evaluation criteria would apply to dental practice startups with the same perspective.

Setting Objectives and Creating Strategies

Every dental practice sets its own objectives and goals. The strategic goals of any organization are broad and complex.

The dental practice consultant would help you break these broader objectives into smaller and time-bound goals. Then, these goals will be translated into achievable targets and actionable plans.

As a result, it’s important to mention that a dental practice may set diversified and conflicting objectives at the beginning. For example, achieving size growth and profitability at the same time may not be feasible.

However, with planning and expert advice, you can achieve all of your objectives in due course of time.

Problem Solving

After the strategic planning and objective-setting phases, the action phase starts. Many dental practices face challenges in translating plans into actions.

Your dental practice may have clear objectives and a good action plan but hurdles remain. It means you need dental practice consultant for the problem-solving issues here.

  • Clinical practices
  • Defining employee roles and responsibilities
  • Communication problems – internal and external
  • Personal work-life balance issues
  • Practice financial management issues
  • Finding the right technology and system setups
  • Adherence to internal controls and regulatory compliance requirements

The list will be unique to all dental practices as each case comes with unique challenges.

Building and Managing Your Practice

All the steps mentioned above would lead to building and managing your dental practice. However, the key to success through consultation is to be ready for changes.

For example, you should be ready for a change for new staff hiring or purchase a new piece of equipment. Sometimes, you may need to make effective changes to your existing practices like communication with patients.

At this stage, you should keep an eye on the long-term objectives of your dental practice. Being receptive and flexible to change is the hardest part but it will take you to much-awaited success.

Consulting for Growth and Profitability

Every dental practice should for continuous growth. However, each practice comes with a unique growth target that requires a different strategy.

Achieving growth means accelerating existing performance indicators.

Similarly, you can work to achieve profitability indicators. The prime task for achieving profitability will be to evaluate practice efficiency.

However, achieving growth and profitability at the same time can be challenging. With the right advice, you can choose one plan at a time and achieve both effectively.

Financial Independence and Succession Planning

Moreover, continuous growth and profitability lead toward financial independence.  It means you can feel secure in terms of financial indicators in the long term. Once you are comfortable with your financial indicators and create a long-term and sustainable plan, you can go for succession planning.

Therefore, your succession and retirement planning should start as early as possible. Learn more today!

New clients are welcome.

Bookkeeping services for dentists

Bookkeeping Services for Dentists

Bookkeeping Services for Dentists

Bookkeeping services for dentists form the foundation of a solid accounting setup. When you work with a professional bookkeeper, you enjoy peace of mind.

Let us explore what are key bookkeeping services and what benefits do they offer for your dental practice.

What is a Bookkeeping Service?

Bookkeeping services prepare and maintain accounting and financial records of your business.

Bookkeeping refers to the daily financial records of a business. Thus, it forms the basis of accounting and financial reports.

Bookkeeping includes recording everyday business transactions for every expense, revenue (sales), inventory purchases, interest payment (or earned), and so on.

Generally, Bookkeeping services for dentists will include the following:

  • Recording business transactions for sales
  • Expense records
  • Maintaining accounts payable and receivable
  • Invoice recording and reconciliation
  • Offering input data for budgets, cash flow analysis, and financial statements
  • Reconciliation of accounting records
  • Preparation of tax records
  • Help in generating key financial reports and performance indicators

In a nutshell, bookkeeping is the foundation of any financial department in any business. Therefore, maintaining clean and consistent bookkeeping is essential for running a smooth financial segment of your dental practice.

Why Do You Need Bookkeeping Services for Your Dental Practice?

Bookkeeping lets you know the financial health of your dental practice. By preparing financial records, you’ll enable your business to know its financial status at any given time.

When you have access to the financial data instantly, you can extract valuable information such as key performance indicators.

Thus, you’ll know the profitability of your dental practice instantly through consistent bookkeeping records.

A major aspect of utilizing bookkeeping records is to find key areas of improvement. Identifying financial indicators would lead and connect to other aspects of your dental practice.

Most businesses need to file estimated taxes. Bookkeeping is inevitably your most valuable tool to gather important information about estimated taxes.

You’ll need consistent and accurate bookkeeping services to file taxes. Therefore, essential bookkeeping records would help you throughout the year and in the busy tax season.

Bookkeeping records provide important input data for all financial statements. In turn, these statements offer a snapshot of the financial position of your dental practice by letting you know what your business owns and what it owes.

Why You Should Hire a Dental Specialist Bookkeeper?

Hiring a bookkeeper is important for any business. However, hiring a bookkeeper that specializes in your industry offers added benefits.

The foremost benefit is to save time and effort for you and your dental bookkeeper. An experienced dental bookkeeper would be aware of the best business practices in your industry.

Therefore, working with a specialist would save time for both parties. Your specialist bookkeeper will ask fewer questions than a generalist.

Also, a dental industry-specialized bookkeeper will offer a readily available bookkeeping template. Your bookkeeping chart of accounts and standard practice procedures will be available for you in no time.

A specialist’s understanding comes from the familiarity of key terms in the industry. An industry specialist bookkeeper also offers the same benefit by understanding key terms and benchmarks of the dental industry.

In the long run, a specialist bookkeeper will prove cost-effective for your dental practice as well. By saving your time, effort, and offering the best services, you’ll save more than spending on clumsy services.

Advantages of Bookkeeping for Your Dental Practice

Bookkeeping services for dentists offers several advantages to your dental practice.

Focus on Business

Hiring a bookkeeper that offers professional services will free up time for you. It means you’ll be able to concentrate on the core activities of your business.

Even small business owners need focus and energy to create a winning business strategy. Therefore, hiring a specialist dental bookkeeper will help you keep up with the competition.

Regulatory Compliance

When your account books are in order, you are following statutory and internal compliance requirements.

Also, any changes like temporary tax relief packages require careful analysis that a professional bookkeeper can do for you in no time.

Help in Managing Cashflow

Cash flow is pivotal for the success of any business. Managing accounts receivables and payables is essential for a dental practice as well.

Accurate bookkeeping records will enable your dental practice to manage cash flow smoothly by analyzing key cash movements.

Help in Busy Tax Season

When you keep consistent bookkeeping records throughout the year, it helps you save time during the busy tax season.

Instead of working through a hectic schedule at the last moment, you can prepare tax records properly throughout the year.

Key Financial Metrics at Your Fingertips

Finally, you can have all the key financial performance indicators at your fingertips by having valuable information through bookkeeping records.

Key financial performance indicators for a dental practice can range from patient turnover, retained customers, profit per patient, gross/net profit ratios, liquidity ratios, and so on.

Learn more about Bookkeeping services for dentists with a consultation today. New clients are welcome.

tax filing for dentists

Tax Filing for Dentists

Tax Filing for Dentists

Tax Filing for Dentists | Filing for taxes is a delicate task for dentists. The process of filing taxes begins with proper tax planning and preparation.

Let us guide you through the process and see what are the benefits of working with a dental CPA.

Tax Planning for Dentists

A dental CPA is your best option for tax planning. Understanding your industry benchmarks and business needs is critical before tax planning begins.

A dental CPA can help you in deciding key factors that can affect your tax planning for the long term.

Here are a few major tax planning decisions.

Entity Structure

An entity structure has a direct and long-lasting impact on your taxes. A dental CPA can help you understand the pros and cons of different entity types.

For example, whether you should choose an LLC or a C corporation, or an S Corporation as all of these types would offer discrete benefits and risks.

Practice and Profit Planning

A major advantage of working with a dental CPA is to plan for the best practice management policies. In turn, these procedures can work well to ensure better profit planning for your dental practice.

Tax Deductions and Credits

Finding the right tax credits and all available tax deductions is another important aspect of tax planning.

An experienced dental CPA can offer dedicated support when choosing the right tax deductions without risking an IRS penalty for your dental practice.

Retirement Planning

Unlike the common notion, retirement planning must begin as early as possible. All dentists must plan their retirement contribution plans after discussing with an experienced advisor.

Retirement planning would also impact your tax savings in the long run.

Employee Benefits Planning

Employee retirement contributions and other benefits have a major effect on your tax filing as well. The right advice from a dental CPA would help you choose the right type of employee retirement and benefit plans.

Tax Preparation for Dentists

Once you go through the planning process, your dental CPA would work for the tax preparations.

Here is a brief checklist for your tax preparations while working with your dental CPA.

Identify Relevant Business Taxes

You should know and plan for applicable business taxes in time. It will help you save money for all taxes in time without risking late fees and IRS penalties.

Common business taxes include:

  • Income tax
  • Estimated taxes
  • Self-Employment taxes (for self-employed)
  • Employment taxes including social security and Medicare
  • Excise tax and state taxes wherever applicable

Gather All Tax Forms

You may need several types of tax forms during the year and at the time of filing taxes. It can be a hectic task for a dentist with a busy work schedule anyway.

A dental CPA would help you find and gather all tax forms at the right time.

Set Schedules for Estimated Taxes

Most small businesses need to file estimated taxes. If your dental practice exceeds the threshold of estimated taxes, you’ll need to prepare for them accordingly.

Getting advice on estimated taxes includes financial planning aspects such as short-term budgets and cash flow management to arrange money for estimated taxes in time.

Collect All Tax Documents

Whether you file online taxes, use tax software, or seek help from a dental CPA, you’ll always need supporting documents.

As a dental practice owner, you’ll need to gather business documents, income/expense supporting documents, retirement contributions, and other comprehensive income supporting documents.

Decide For a Tax Filing Extension

If you feel short of time during the busy tax season you can apply for an extension. However, you must consult your dental CPA before deciding.

Tax Filing for Dentists

April 15 is your tax filing deadline every year. If you feel short of time, apply for an extension.

Working closely with your dental CPA can ease your tax filing burden. Even when you have time, do not leave the task till the last moment.

Here is a quick list of your tax filing process.

  • Provide last year’s tax returns to your dental CPA
  • Provide bank statements, credit card statements, business documents, and other income/expense supporting documents
  • Your dental CPA will fill in the relevant tax information on all required tax forms
  • Work closely with your dental CPA to research available tax deductions and tax credits
  • Keep in mind any regulatory changes like tax relief packages that directly affect your tax returns
  • File your tax returns through your dental CPA
  • Pay for your taxes including quarterly estimated taxes if applicable
  • Get your tax refund

You may need to recheck for a tax refund with the IRS if there are any disputes. Also, in some cases, you may need an IRS representation. This is where a dental CPA will come in handy with the right qualification and skills for your dental practice.

Contact Ash Dental CPA to learn more. New clients are welcome. 

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Hiring A Dental CPA

Hiring A Dental CPA

Hiring A Dental CPA | Dental CPAs offer a wide range of services from basic accounting and bookkeeping to dental practice consultation and tax planning.

Let us discuss what are the key benefits of hiring a dental CPA for your dental practice.

Who is a Dental CPA?

A dental certified public accountant (CPA) is a professional with a license awarded by the AICPA. They are qualified accountants that come with the highest professional qualification.

On top of their educational qualification, CPAs also need to maintain their expertise in the practical world.

Hiring A Dental CPA comes with the industry specialization of working in the dental industry. Therefore, they offer combined benefits of accounting and business consultancy at the same time to your dental practice.

Hiring A Dental CPA? What You Should Know

Small businesses can cope with the accounting and taxation requirements themselves. Most small business owners can do the job through an ordinary tax preparer as well.

However, the dental industry requires in-depth knowledge of the industry as well as the tax regulatory environment to maximize tax benefits for your dental practice.

A dental CPA is the one that goes beyond the conventional role of accounting, bookkeeping, and payroll tasks. You can expect a wider role from a dental CPA for your dental practice.

Put simply, where an accountant can produce accounting reports a dental CPA would turn these reports into useful insights and help you make informed decisions.

Benefits of Hiring a Dental CPA

Now that you have understood the role of a dental CPA, let us elaborate a bit on the benefits of hiring a dental CPA for you.

Tax Planning

Tax planning requires careful evaluation of your income, expenses, and assets. It is not a one-time task that you can perform once a year.

Therefore, the foremost benefit of working with a professional dental CPA is to bring tax planning to your dental practice.

Effective tax planning involves minimizing the tax burden for your dental practice. At the same time, it means ensuring compliance with the tax regulators.

In short, a professional dental CPA will help you find the best tax savings without getting an IRS audit and penalties.

Accounting and Financial Planning

A key role that dental CPAs can play is to help you set up strong accounting and financial records. The process can begin with the setup of a complete bookkeeping and accounting system planning.

Accounting records form the basis of the financial statements of any business. These statements then provide the basis for key business decisions and planning.

For example, a professional dental CPA can help you keep accurate records of employee travels, transportation, and insurance costs that are often overlooked and missed by ordinary tax preparers.

Business Consultation and Decision-Making

Running a dental practice is a challenging task anyway. On top of that, if you have to manage the taxes and financials of your practice, you wouldn’t be able to concentrate much.

Hiring A Dental CPA would help you free up time and energy to focus on the core of your business. You’ll be able to make informed decisions and focus on the growth of your dental practice rather than number-crunching all the time.

With the experience and qualification of a dental CPA, you’ll always find a business consultation at your disposal at any time.

Audit and Assurance Help

Running and managing a dental practice may require special assistance sometimes. For instance, you may need help in audit and assurance tasks from a professional dental CPA.

Although audits are not mandatory for private firms, you may need one for internal control purposes. Also, you may require forensic audits and assurance activities to ensure the implementation of internal controls.

A dental CPA can make sure your internal controls are in place and working the right way as you intended.

IRS Audit Representation

Continuing with our point above, if you have an effective governance model and internal controls in place, you are unlikely to get an IRS audit.

However, if you do get an IRS audit call, you’ll need a CPA to represent you before the IRS.

A dental CPA is qualified to represent your dental practice with unlimited rights before the IRS whenever you need.

Learn more about Hiring A Dental CPA with Ash Dental CPA. New clients are welcome.

Tax deductions in 2022

Most Common Dental CPA Tax Deductions in 2022

Tax Deductions in 2022

Tax deductions in 2022 are common business expenses for dental practices. There are the costs that dental practices incur during the year and can be deducted from the taxable income.

Let us guide you through the most commonly used dental CPA tax deductions in 2022.

What is a Tax Deduction for a Dental Business?

A tax deduction is an expense that is deductible from your business income.

A deduction can be allowed fully, partially, or up to a certain percentage of taxable income as defined by the IRS.

Tax deductions in 2022 for dental practices can be tricky. Therefore, you should seek guidance from a dental CPA that comes with the experience and skills to manage your dental practice’s deductions.

Most Common Dental CPA Tax Deductions in 2022

Startup Costs

These are startup expenses that you incurred if you’ve set up a new business this year.

For instance, you can deduct a maximum of $10,000 of set up costs and $ 5,000 of organizational costs.

All other setup costs such as equipment, building, machinery, etc. will be deducted as depreciation costs.

Equipment Depreciation – Section 179

For startups and ongoing dental practices, depreciation expense under section 179 is an important deduction.

You can spread the costs of medical equipment, tools, and other machinery over several years. However, the IRS allows you to take the accelerated depreciation in the first year to maximize your tax deduction benefits.

Business Expenses and Supplies

These are your regular supplies of office and dental practice. Likewise, recurring business expenses include office printing supplies, ink cartridges, janitorial supplies, cleaning items, and so on.

Overall, these expenses are 100% tax-deductible provided you’ve used them all in the current tax year.

Business Insurance

If your dental practice has a business insurance plan that fulfills the “ordinary and necessary” clause, it’s a tax-deductible expense.

Your dental practice may have business insurance for:

  • Employee benefits
  • Employee medical expenses like group health, vision, or dental insurances
  • Commercial property insurance
  • Data breach insurance
  • Professional liability insurance

Employee Salaries and Benefit Plans for Tax deductions in 2022 

Employee salaries and benefit plans would be a substantial cost of your dental practice business for any tax year.

For dental practices that operate as an LLC or sole proprietor:

  • The salaries and compensation packages must be reasonable
  • Investors must not be employees and owners at the same time
  • The employees must not be registered as sole owners, partners, or LLC members
  • Salaries and benefits must be paid within the same tax year

Retirement Contributions

In short, the retirement contributions for your employees are deductible items. If you are running a dental practice as a sole proprietorship, you are also responsible for your own retirement contributions.

Therefore, all of your retirement contributions are 100% deductible for you and your employees.

Business Meals

Business meals and refreshment expenses are overlooked. However, these are Tax deductions in 2022 .

Your business lunches for you and your employees are tax-deductible expenses provided they are reasonable and backed by records.

Rent and Utilities

Also, common tax deduction for a dental business is rent.

Similarly, your building utility expenses such as the cost of electricity, internet, and telephone are all tax-deductible expenses.

Legal Expenses

These expenses include your legal and professional fees. For instance, when you pay your dental CPA to prepare and file your taxes, it is your tax-deductible expense for the next year.

Similarly, all your fees paid in legal proceedings are eligible tax deductions.

Taxes and Interest Costs

If you have a business loan like a line of credit or mortgage, the interest paid is 100% tax-deductible.

The only caveat here is that you can only deduct a maximum of up to 30% of your business income every year only. In addition, the remaining balance can be rolled over until you deduct all the interest expenses from your taxable income in the following years.

Moreover, the list is expanded. All you have to do is to find the right deduction and back it with proper records.

Therefore, it is important to consult a professional dental CPA. This professional can lead you through the process efficiently and maximize the tax benefits for your dental practice

Learn more with Ash Dental CPA. Our team has over 20 years of experience. Find out how our team has helped many dentists succeed. New clients are welcome. Call today.

taxes for dentists professional

Taxes for Dentists: What Does a Dental Accountant Do?

Taxes for Dentists

Taxes for Dentists | The role of accountants and CPAs has evolved from managing account books to financial strategic planning. Business owners now expect more consultation from accountants than ever.

Dental practices are no exception to that rule. A dental accountant comes with qualified accounting background and specialty in the dental industry. An industry-specific accountant that offers tailor-made advice to dental practices.

A dental accountant can help you in various business aspects. From tax preparations to business strategies, and from retirement planning to transaction advisory, you can discuss all key business decisions with a dental accountant.

Let us discuss some major areas of service that a dental accountant offers, including Taxes for Dentists.

Tax Preparation and Planning

Tax preparation and planning, Taxes for Dentists, are two key challenges faced by many businesses. Dental practices also seek professional advice from accountants for these two issues.

A dental accountant that fully understands the dental practice’s accounting requirements can plan an effective tax strategy.

Your tax preparation may only start just before the tax season. It will include preparing supporting documents, filing tax return forms, and providing necessary information to the accountant.

However, your tax planning should start at the beginning of the year. Tax planning requires following a certain path throughout the year. As many businesses file estimated taxes and employment contribution taxes, they need to plan ahead of time to maximize tax savings.

Proactive tax planning can save you thousands in tax costs. For instance, you should discuss an entity structure that maximizes the tax benefits in the long run. Similarly, you should discuss a plan to choose the right retirement contribution plan.

Similarly, researching the right type of tax credits is important. You should plan for business expense deductions and credits as well.

Working with a dental accountant can offer an added advantage of industry experience. It can save you time and offer valuable tax advice, for Taxes for Dentists.

Business Planning

A key role that a dental accountant plays is to help you in business planning. From setting up the account books to business valuations, you can talk to a professional accountant that helps you with key business planning issues.

Business planning starts with choosing the right entity structure. The choice largely depends on your investment options and goals.

A similar business planning challenge arises if you need help in a business buy or sale transaction. The process involves several key steps. You’ll need professional advice in business valuation, business marketing, price negotiations, and closing the deal.

A dental accountant can provide guidance on every business aspect. Every business decision comes at a cost. Business decisions such as new hiring and IT infrastructure that are indirect to the finance department can have a great impact on the financials of a business. Thus, the role of an accountant converges with each aspect of the business these days.

Why Use a Dental Accountant for Taxes for Dentists

The traditional role of accountants was to do the number-crunching. It has become more challenging for accountants and more rewarding for businesses in recent years though.

Dental accountants come with expertise in the dental industry. They can offer better advice to your dental practice in several ways, including Taxes for Dentists.

A professional dental accountant will help you in business growth. They come with first-hand experience of the industry practices. It can help you in business growth by choosing the best facility management methods.

Another key role that a dental accountant can play is in business analysis and performance appraisal. It requires setting the right KPIs for your dental practice. Dental accountants are well-versed with the expectations of dental practices. Thus, they can set the right performance benchmarks for your business.

Lastly, where accounting software can detect errors, it cannot elaborate on the reason. A skilled professional can help you answer why something is wrong. The role of a dental accountant is to help you formulate an effective business plan.

Dental accountants tell you which financial strategies to adopt. They empower you to make informed business decisions.

Learn about Taxes for Dentists with Ash Dental CPA. New clients are welcome.

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Tax Advising for Dentists

Tax Advising for Dentists

Tax Advising for Dentists | Tax season offer several challenges to taxpayers. Dentists are no exception to that. However, working with a professional tax advisor can help you through the busy tax season issues.

Why you Should Consult a Dental CPA?

Dentists can hire an in-house accountant to do their tax returns. They can also use online tools to file their tax returns.

Unlike most peoples’ opinions, tax advisory is much more than accounting tasks. You’ll need expert advice at each stage of your business and tax planning.

Dental CPAs are specialists that work with dentists. They come with in-depth knowledge of taxes and business practices.

It means you can take advantage of their expertise in tax planning as well as business planning.

Let us discuss a few key points to elaborate on the importance of using a dental CPA that offers Tax Advising for Dentists.

Tax Advising for Dentists – Tax Saving Strategies

Each business comes with a unique setup. It means your tax plan could be different from others. Here are a few key areas of tax-saving strategies that can help you reduce the tax bill.

Plan Ahead

First, do not leave your tax planning to the last moment. If you couldn’t plan ahead of time, you’ll need some catching to do.

Most businesses need to pay estimated and employment taxes quarterly. It means you need to plan well to reduce your tax bill throughout the year. Hence, we can offer the best advice to you to plan before the busy tax season arrives.

Entity Structure

Each entity structure comes with its pros and cons. For example, a C Corporation offers the benefits of pass-through income with an established separate business entity. The owners pay taxes on dividends received too.

Choosing the right type of entity structure depends on your dental practice requirements. You may want to own it as a sole proprietor. Perhaps, a limited liability partnership suits your business if you have business partners. Professional Tax Advising for Dentists will help narrow your options.

Research and Development Credit

The research and development tax credit is often underused by dental practices. Depending on your dental practice’s apparatus, you may be eligible for the R&D tax credit for various activities.

Some of the available R&D credits for a dental practice may include:

  • Developing new treatment plans
  • Designing and fabrication of prosthetics
  • Dental laboratory activities
  • Oral surgery

Employee Retention Credit

The IRS allows certain businesses to take employee retention credit. If your business went through a rough patch during the pandemic, you can find this tax credit as a useful option now to minimize the tax bill.

It’s important to evaluate employee retention credit eligibility. Consult professional Tax Advising for Dentists so that you maximize the tax benefits of utilizing the employee retention credit.

Maximize Retirement Plan Benefits

You should choose a retirement plan that best suits your long-term financial goals. Many dentists choose the traditional 401(k).

You can also explore larger retirement contribution plans such as defined benefit pension plans, insurance captives, and premium financing options.

You’ll need to consider the cash position of your business before choosing the right type of retirement plan. Again, seeking professional advice can help you make the right decision here.

Pay Your Family Members

Like many other small businesses, you can use this option too. If you have a family member who can help you in your business activities, you can pay that person.

In other words, you can hire a family member as well. For instance, if a family member helps you in accounting tasks, you can pay that person to lower your tax bill.

Consider Your Depreciation and Amortization Strategies

Service businesses come with a larger proportion of intangible assets. It means you’ll need a delicate strategy to deduct amortization expenses. However, an experienced dental CPA can help you through the process.

You can also restructure the depreciation strategy for your business’s physical assets. More on this during your Tax Advising for Dentists meeting.

Adjust Your Expenses and Income

Prepaying expenses is a common practice. However, it does not work all the time. You may need to defer some income as well.

Contrarily, if you are expecting a large cash flow in the coming year, you may want to push for accounts receivable to avoid a larger tax slab next year.

Choosing the right method can affect your current and next year’s taxes. Thus, planning with the help of a professional tax advisor can reduce your tax burden and keep your business compliant with the IRS requirements at the same time.

Learn more about Tax Advising for Dentists with Ash Dental CPA. New clients are welcome.

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Accounting Near Me: Do I Really Need a Specialized Accountant?

Accounting Near Me

Accounting Near Me | Accounting can be a challenging job for certain businesses. Dental practices often face the dilemma of choosing between a specialized accountant or a generalist.

Both types of accountants offer valuable services. The decision to choose a specialized accountant largely comes down to the needs of your business.

Do I Really Need a Specialized Accountant?

You should first determine your dental practice needs. For instance, if your dental practice is in the initial stages, your decision should revolve around hiring an in-house v outsourcing accountant.

Similarly, if you are witnessing expansion and growth, you need to ponder on the industry-specific accountant question. Also, you should carefully consider your business turnover, taxation, employee benefits, and other accounting requirements before contacting an Accounting Near Me.

A specialized accountant offers several benefits that other accountants cannot. For example, a dental CPA offers valuable insights into dental practices that a generalist accountant wouldn’t be able to offer.

Let us briefly discuss some key benefits of working with a specialized accountant.

It Saves You Time and Cost

Working with a specialist accountant seems costly. If you work with someone who comes with years of experience, your costs of outsourcing will increase further.

On the flip side, the benefits you receive will outweigh the costs incurred in the long run. You’ll receive the right advice for your accounting, tax, and business consultation services to name a few.

As an example, a dental CPA (Accounting Near Me) knows the inside out of a dental practice’s accounting requirements. It means you can save through lean accounting practices and by avoiding tax penalties.

It Brings Value to Your Dental Practice

Specialized accountants such as dental CPAs offer a better value proposition. They remain ahead of others for various reasons. Their knowledge and experience of working within the industry are their prime advantages.

It brings benefits to both parties. You can easily choose a specialist that aligns with your accounting needs. Similarly, specialist accountants can beat the competition in the market.

Getting advice from an accountant that offers industry experience would become an added advantage for your practice. It means you can be at par with your peers and plan to stay ahead with the right advice.

Help in IRS Audits – Audit Triggers

Most businesses need to file for estimated taxes. They need to prepare different types of business taxes including income taxes, employment taxes, self-employment taxes, ad estimated taxes.

Taxpayers are entitled to deductions and credits. However, you need to be careful when applying for certain deductions and tax credits. Any mistakes in the tax returns can get you an IRS audit.

An accountant, or Accounting Near Me, with industry experience can help you choose qualified tax credits. It will also help you to choose the right type of business entity to reduce your tax burden by remaining fully compliant as well.

Help in Business Planning

The role of modern CPAs has evolved a lot in recent years. Businesses expect more than just tax preparation and accounting services from CPAs.

This is where the industry specialization becomes critical. You cannot seek help in business planning from a generalist.

Specialized accountants can offer advice in choosing the right entity type, financial planning, tax preparation, business valuations, transaction advisory in buying or selling a business, and many more.

The value of strategic planning and business consultation in the long run outweighs any costs incurred in the short term.

Specialized Accountants Come with Better Networking

Often businesses require help for various business functions. For instance, a dental practice seeking help in a business sale transaction from a business broker.

A dental CPA, Accounting Near Me, with the right knowledge and expertise can offer these services. At the same time, a dental CPA can offer valuable networking services that can help you complete the transaction quickly.

It means a specialist can offer reliable services in several ways.

Specialized Accountants are Up-to-Date with Industry Standards

Another advantage of working with an industry specialist is they remain well versed with their industry standards.

For example, a dental CPA will be aware of the changing trends in dentistry. Similarly, any particular tax regulatory changes can affect certain industries that require specialized focus.

Contact your Accounting Near Me, Ash Dental CPA, today! New clients are always welcome!

tax filing for dentists

Tax Filing 2022: What You Need to Know!

Tax Filing 2022

Do not leave the tax return filing for the last moment. You’ll stress out and make errors in tax filings. It may get you an IRS audit or penalties.

If you haven’t already, it’s time to create a complete plan to file your business taxes right now.

What Do You Need to Know for Your Tax Filing 2022?

So, where do you begin and what do you need to file your business taxes for 2022. For seasoned businesses, nothing changes much except for their inflation adjustments for the tax rates and deductions.

Here are our tips on what you need to know for your tax filing 2022.

Know Your Tax Filing Deadlines

First thing first, you need to remember the tax filing deadlines. Regularly use the online tax calendar to avoid any late filing penalties.

April 15, 2022, is your tax filing deadline if your business type is a C corporation. For many small businesses, the tax filing deadline is April 15 every year unless the IRS provides an extension due to extraordinary circumstances.

Similarly, for partnerships and S corporations, the deadline is March 15. You’ll also need to remember the estimated tax filing dates.

Types of Business Taxes

All businesses do not need to pay every type of business tax. However, it is important to know the business tax types. You can plan accordingly and manage the taxes in time.

There are 5 types of business taxes that you may need to file.

  1. Income tax on your business income
  2. Estimated taxes are quarterly taxes for some businesses that have to pay more than $ 1,000 income tax annually.
  3. Self-Employment taxes for sole proprietors and freelancers.
  4. Employment taxes are for social and medical care for the employees of the company.
  5. Excise taxes that are charged on some goods or services for selected businesses.

Gather Your Tax Forms – Know Which One to Use

Knowing which tax forms you’ll need for different types of tax filings is important. You’ll need to use the right tax form for specific purposes.

Some of the commonly used tax forms are listed here.

  • Form 1120: It is used to report income for C Corporations.
  • From 1120 S for filing income tax returns for S corporation.
  • Schedule C is used to file income tax returns for sole proprietors.
  • Form 1099-MISC is used for freelancers or self-employed persons.
  • Form 1065 is used for the income tax return filing for partnerships.

Similarly, you must know the correct forms for certain tax deductions and credits.

Complete Your Accounting Records

Knowing what you can deduct as a business expense is important. It is also important to back your claims with proof. Keep and gather your expense records.

Similarly, you must collect all your income invoices. Gather payroll bills and other expenses incurred during the year. You should carefully evaluate your combined personal and business expenses as well before tax filing.

Completing your accounting records will help you file taxes correctly. It means you can avoid any tax delays, penalties, and additional tax costs.

Evaluate Your Tax Deductions and Credits

You can deduct business expenses for operating and capital categories when tax filing. All ordinary business expenses are tax-deductible for your business.

Capital expenses include startup costs, asset purchases, and other capital investments. Similarly, common business deductions include rent, salaries, utilities, mileage, insurance, and taxes.

You should also search for relevant tax credits. Certain businesses are eligible for specific tax credits.

Recheck Your Estimated Taxes

If your estimated income taxes are above $ 1,000 for the current year, you’ll need to make estimated tax payments to the IRS. You can use professional estimates and historic tax returns as guidance to evaluate whether you need to file for estimated taxes.

Most businesses need to file for estimated taxes though. At this moment, you can calculate any remaining estimated taxes for the previous three quarters.

Seek Professional Help – Extension

Consulting a professional tax preparer can help you save money and time. You can get professional advice that can lower your total tax bill. It can also save you from IRS audit and tax penalties.

For tax filing, contact Ash Dental CPA. New clients are always accepted.