Tax planning and dental practice strategies for those involved in the dental industry.

1. Tax and Practice Strategies
You Can Sink Your Teeth Into
Bassim Michael, CPA, CVA, MS Tax
Michael & Company, CPA A PC
www.onlyfordentists.com
bmichael@bmichaelcpa.com
559.436.8907 ~ Fresno
408.333.9802 ~ San Jose
1‐877‐71‐Taxes ~ Toll Free
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2. Presentation Overview
Introduction
Survey
Economic trends in dentistry
Overview of the latest tax legislation
Tax strategies to lower your taxes
Statistics and Case Studies
Q&A
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3. Survey
Own a practice vs. associate or employee
Practicing over 20 years?
Practicing under 20 years?
How many are optimistic about the future of
dentistry?
How many feel they are paying too much in taxes?
How many have an exit strategy or plan?
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4. Economic Trends in Dentistry
A tale of two cities, the best of times and the worst
of times. We’re seeing practices that are taking off
and thriving and others that are declining.
Patients are paying more out of packet.
Dentistry is becoming more consumer driven.
30% percent of the dentistry is delivered out of
10% of the locations.
Wall Street is in love with dentistry. Dentistry is
the most profitable business in America!
DSO’s are here to stay and are shedding the clinic
image.
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5. Economic Trends in Dentistry
 Practices that are thriving are doing the
following:
 Doctors are investing in their own prof. development
 Focusing on practice culture and investing in the
team’s development. “Staff is an infection, team is the
cure!” Joseph Blaes, DDS, Dental Economics
 Wow patients, don’t hurt them
 Saying YES more to patients
 Professional Management – more delegation
 Growing revenues, lowering overhead & more efficient
 Adding new patients and keeping them
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6. Overview of the Tax Increase
Prevention Act of 2014
 For couples earning $457,600; single taxpayers earning
$406,750 it raises the top rate to 39.6% and raises long
term capital gains to 20% from 15%
 Obama Care: With respect to health insurance, your
business may be eligible for a credit for contributions to
purchase health insurance for employees. The amount of
the credit increased this year to 50 percent (35 percent for
tax‐exempt organizations) of premiums paid. The tax
credit is subject to a reduction if you have more than 10
full‐time employees or if average annual full‐time
employee wages exceed $25,000.
 Extends through 2014 tax‐free distributions from IRA
accounts for charitable purposes, relief from cancellation
of debt income for principal residences.
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7. Overview of the Tax Increase
Prevention Act of 2014
Extends through 2014 business tax provisions:
Section 179 asset expensing at $500,000
50% bonus depreciation
Extends through 2014 certain energy tax
incentives that expired at the end of 2013
including: energy efficient credit for existing
homes, and energy efficient credit for new homes.
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8. Tax Strategies to Lower Your Taxes
 Good record keeping habits will help you:
 Capture all your deductions.
 Keep your deductions in case of an audit.
 Help you manage a better practice – If you can’t measure it,
you can’t manage it.
 Understand and review your numbers on a regular basis.
 Ask your CPA to look at your books quarterly to make sure
you are looking at accurate figures.
 As early as July, ask your CPA to provide you with a tax
projection and ask them for recommendations to lower
your liability.
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9. Tax Strategies to Lower Your Taxes
 Why is the mid‐year tax projection important?
 It will make you consider the following:
Do I have the right retirement plan in place?
Am I maximizing my retirement plan deduction?
Do I need to consider equipment purchases to maximize my
depreciation deduction?
Can I defer billing towards the end of the year so that
collections would come in next year?
Can I accelerate expenses before the end of the year?
 Follow up with another projection in November to make
sure you are on track. Last minute planning does not work!
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10. Tax Strategies to Lower Your Taxes
Don’t overlook the tax credits.
Federal disabled access credit ‐ $5,000 maximum
tax credit for eligible businesses that comply with
the Americans with Disabilities Act of 1990.
California New Jobs Credit ‐ $3,000 tax credit for
each net increase in qualified full time employees.
The state allocated $400 million towards that tax
credit.
Cost Segregation studies
Domestic Production Activities Deduction – Cerec
Machine
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11. Being Proactive Can Save You $$$
The data we have compiled show that dentists
who are proactive in their planning save more in
taxes than dentists who do nothing.
Average annual tax savings for dentists around $15K
Average cost segregation savings $25K‐35K
Average annual domestic production activities
deduction $1,500
New hire tax credit average tax benefit $3K
Q & A
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