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Dental Accounting Association

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CPA Accountant - Dental Practices

Dental Annual Summit in Chicago – AAPD Annual Session

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Chicago - Boat TripIn late May 2019, the Dental Accounting Association headed to Chicago for our annual meeting.  This years meeting preceded the 72nd Annual Session for Pediatric Dentistry from May 24th to May 26th.

The AAPD Annual attracted over 6,000 pediatric dentists and the weather could not have been better.  To meet existing pediatric dentists and attract new prospects, the Dental Accounting Association had a booth in the Chicago Hilton.

For 2019, the Dental Accounting Association is attracting three new member firms, thus bringing our membership total to fourteen CPA Firms dedicated to better service dentists throughout north america.  Our association would like to attract another six (6) CPA Firms into the association and will then slow down growth.

The core initiatives that the group focused on were:

  • Tax Coaching – providing advanced training in tax reduction (well beyond CPA licensing requirements)
  • Leveraging artificial intelligence to operate more efficiently
  • Profit Coaching integrating benchmark standards

Chicago Boat2After the long hours of discussion, several firms got to experience Wrigley Field and take in a Cubs game.  Another night featured a boat ride to take in Chicago’s beautiful architecture.

 

Prescription for Big Tax Savings

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The oral health industry is a broad field encompassing many different types of practices. The term oral health means maxillofacial surgery, endodontics, periodontics, prosthodontics, and other types of dental practices.  While the clientele may differ in each setting, the goal is always the same; to help the patient heal and feel better regardless of how many teeth they have left!  Another commonality of all oral health professionals is the desire to pay less in taxes legally.

If you’d like to pay less in taxes, then read on…

 

What is cost segregation and what does it have to do with me?
Cost Segregation is the reclassification of assets in order to accelerate depreciation. This method can be used on buildings that are acquired, newly constructed, and even (on a look back basis) for buildings that have been owned and operated for many years!

Z - Dental OfficeWhat if you don’t own your building? No problem, Cost Segregation can be performed on the interior improvements that you have undertaken as a tenant as part a buildout.  This strategy allows you to “front load” your depreciation at tax time, freeing up significant cash flow which can be reinvested into your building or practice. You will not get more money back, you will simply expedite the time frame of your depreciation allowing your money to work for YOU rather than pay our government! This is a particularly good time to consider a Cost Segregation Study with the newly implemented 100% bonus depreciation regulation as part of the Tax Cuts and Jobs Act of 2017. This legislation is different from the past version because it now includes acquisition where previously bonus only applied to newly constructed buildings.

In addition, the bonus rate (as mentioned earlier) is now 100% for certain assets!

 

What is my tax benefit?
The benefits of a Cost Segregation Study vary depending on the details of your property.

Z - Cost Seg2For example, a newly constructed dental office with a cost basis of $1,540,000 can expect to see around 30% accelerated, and with the new bonus depreciation, the first-year tax savings could be in excess of $180,000!  A rented two story medical office with recent tenant improvements totaling over $290,000 was able to accelerate over 91,000 or roughly 60%!

Again, the results are heavily based on the facts and circumstances surrounding your property, but on average dental facilities can expect to see between 20-50% accelerated depreciation! If you have bought, built or renovated your office (even if you rent) please let us determine your estimated return!

 

If you’d like to pay less in taxes legally and think cost segregation might fit your situation, then complete this form and we will have a Dental CPA contact you immediately.

 

 

Dental Accounting Association

DAA-logoAll members of the Dental Accounting Association are licensed CPA’s and have been vetted.  Each firm attends at least one national dental show (e.g., ADA, AAO, AAPD, AAOMS, etc.) along with some regional dental shows.  In addition, each firm is provided with advanced training in proactive tax planning which is well beyond the state requirements for being a licensed CPA.  This advanced training is designed to find loopholes, credits, deductions and strategies to lower your effective tax rate.  While these methods are perfectly legal, they often require extra work that a local generalist would never consider to offset the incremental time demands.  Cost segregation is one example of proactive tax planning designed to maximize tax credits and loopholes.  The Dental Accounting Association works with a leader within the cost segregation industry to provide ethical ways to lower your taxes.

Ten States with Worst Dental Health

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Here are the 10 states with the worst dental health and their scores.

1. Arkansas — 31.25
2. Mississippi — 32.97
3. West Virginia — 36.63
4. Alabama — 38.48
5. Louisiana — 38.53
6. Alaska — 41.56
7. Texas — 41.56
8. Florida — 42.34
9. Montana — 42.68
10. California — 43.01

The results were released by Wallethub on February 1, 2019.  Each state was measured for 26 key indicators of dental health.

The top ten states for best dental health were also released.

 

Why Savvy Dentists Hire Specialists

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Z - SpecialistIn today’s world of specialization, more and more dentists are hiring specialists to help them with legal matters, financial matters, insurance, practice brokerage and even real estate.

Dental Law Firms

Dental CPA Firms

Dental Practice Insurance

Dental Practice Brokerage

Dental Practice Real Estate

Dental Practice Valuations

In each of these cases, there are local generalists to provide these services and are located close to your place of business.  Typically, a local generalist handles everyone from retail businesses to construction to whatever walks in the door.  However, most savvy dentists will trade off location in return for a higher level of dental industry knowledge and expertise so they make the best decision relative to their competitors and minimize risk.

Whether you are a new dental practitioner or a seasoned practitioner, there are law firms who are dedicated to the dental industry who can save you tons of time and money by focusing on the dental industry.  The same is true for dental practice real estate, insurance and accounting/tax.  There are huge advantages to be gained by hiring a specialist who understands the nuances of the dental industry.

For example, if you own a dental practice and suspect an employee is stealing cash, a generalist accountant would probably miss this and would not have a clue who to recommend as a  forensic specialist.  However, a CPA dedicated to the dental industry knows a couple experts to recommend.  This kind of advice is priceless rather than letting the crime continue.

Here are several other ways a dental industry CPA can provide a higher level of service to you:

  • Specialized tax planning techniques – The United States tax code is 67,204 pages long and there are 1,638 different forms. And as you make more money with your practice, the complexity increases dramatically which is why the US GAO says that taxpayers overpay $1 billion per year in taxes.  To simplify this, dental CPA’s focus on aspects of the US tax code that are most advantageous to dental practices and share techniques that can be harnessed to lower your effective tax rate.  There are huge tax savings to be gained by specializing on dental practice taxes.
  • Purchase new equipment cost effectively – Dental CPA’s understand how to finance equipment and expense it better.  And they know which dental lenders are in the best position to complete the loan.
  • Cost comparisons – Dental CPA’s have the ability to compare your costs versus similar practices your size so you can understand areas to save money. This covers labor, overhead, fees for services, production, accounts receivable, and more.
  • Due diligence on buying a practice – Most dental CPAs can help you avoid buying an overpriced or problematic dental practice.

 

If you are looking to make the best business decisions for your dental practice, hire a specialist that understands the dental industry and has a network of experts to recommend as well.  Hiring a specialist saves tons of time and money in the long run.

 

Dental Accounting Association

All members of the Dental Accounting Association are licensed CPA’s and have been vetted.  Each firm attends at least one national dental show (e.g., ADA, AAO, AAPD, AAOMS, etc.) along with some regional dental shows.  In addition, each firm is provided with advanced training in proactive tax planning which is well beyond the state requirements for being a licensed CPA.  This advanced training is designed to find loopholes, credits, deductions and strategies to lower your effective tax rate.  While these methods are perfectly legal, they often require extra work that a local generalist would never consider to offset the incremental time demands.

If you’d like to hear from a Dental CPA who is best suited for your practice, complete this form today.

Top 7 Questions to Ask When Choosing an Accountant?

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The tax changes under President Trump have been major.  In fact, the tax law changes are the most significant tax changes in more than 30 years.  And given those major changes, many dentists are stepping back and re-evaluating what is best for their current needs.

Here are a series of questions that you should be asking to make sure you are in the best possible tax position.

  1. When is the last time you attended a conference for the dental industry?
  2. What is the best corporate entity structure for my practice?
  3. Would I benefit from cost segregation study to lower my taxes?
  4. Should I establish a pension program for my practice and would it be cost effective?
  5. Should I consider captive insurance to lower my effective tax rate?
  6. Should I have more family members on the payroll?
  7. How does my practice compare to my peers?

If you are serious about your financial future, then you should be working with a Dental CPA that not only focuses on the dental industry but knows the best ways to lower your effective tax rate with proactive planning and strategies.

All members within the Dental Accounting Association attend at least one major dental conference a year, plus large regional dental shows, along with several tax planning conferences.  Over the years, the Dental Accounting Association is the only Dental Accounting Association that attends the major dental shows like the American Dental Association (ADA) Annual, American Association of Orthodontists (AAO) Annual and Amercian Academy of Pediatric Dentistry (AAPD) Annual.  And yes, we attend more than our share of regional and state dental shows as well.

If you are tired of working with a local generalist accountant and would like to upgrade to a Dental CPA, contact us today and we’ll make the introduction.

Also recognize that we will have a few more new members joining us later this year so our coverage will be getting closer to you soon if there is not a local member already.

Differentiate To Become The Best At Something

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Are you tired of haggling over the price of your service? Have you found it difficult to charge the prices that your services deserve?

Without a differentiated service, your service becomes a commodity because you become subject to the market and vulnerable to someone else with a lower price. To command a higher price for your service and maintain superior profit margins, you must differentiate your service and provide more “perceived” value. When done properly, your value proposition becomes well known, the sale becomes easy, and your retention rates will increase.

Z - Blue Ocean imageTo learn more, here are two suggestions that go into more depth on how differentiation can change your world.

Blue Ocean Strategy by W Chan Kim – This international best selling book is an interesting read on how brands and companies have effectively differentiated their offering to make their competition less relevant. In crowded categories like wine, air travel, entertainment, fitness, and music, learn how differentiation can create a huge difference.

By all means, the concept of differentiation or die is not new.  In fact, Jack Trout wrote a book called “Differentiate or Die” back in 2000 and it became a #1 Best Seller.

Another example on how differentiation is impacting dental practices can be found in this article by Forbes magazine.  Essentially, the article explains how becoming the “best” at one particular service enables you to increase price and attract new patients from a broader geographic area, not just five miles.

Learn how to become the best can set your practice on fire.