Roseville and Sacramento Accountant for Dental Practices
Cook CPA Group
Dental practices often help people fix various dental problems and provide others with the ability to achieve the perfect smile. However, there are several other aspects of operating a successful dental practice besides keeping your patients happy. For example, you will have to ensure that your dental practice maintains a good relationship with California’s Board of Equalization and the Internal Revenue Service. If your dental practice requires assistance dealing with complicated tax regulations, you should consult with an experienced Roseville accountant for dental practices.
Cook CPA Group acknowledges the endless work that goes into operating a prosperous dental practice, and we are here to help your business continue to thrive. Our team of skilled accountants possesses decades of combined accounting experience, and we are prepared to use that experience to represent you. To schedule a free consultation to discuss your tax situation, contact Cook CPA Group at (916) 269-9281, or contact us online.
Tax Tips for Dental Practices
Managing your tax liability is an important part of running a successful dental practice. Cook CPA Group has years of experience working with businesses in our community to develop tax planning strategies that are tailored towards their business. The following is a list of tax tips that may apply to your dental practice.
Meals and Entertainment Deductions
Generally, money used for meals and entertainment would qualify as ordinary and necessary business expenses. This means these expenses would only be deductible up to 50% when filing your income tax returns. However, the following circumstances would allow a dental practice to claim a 100% deduction for meals and entertainment:
- Meals offered as a de minimis fringe benefit, meaning they are offered at the dental office for more than over 50% of the office’s employees
- Goods that are offered to the general public
- Meals and entertainment produced for company picnics and holiday parties
- Offering meals or entertainment for career development programs
- Organizing an employee appreciation event that needs meals or entertainment
- Expenses for meals and entertainment that an employee can claim as taxable income
This is not an exhaustive list. Your practice may be eligible for other deductions related to meals and entertainment.
Hiring Family Members
Some dental practices may employ members of the owner’s family without being aware of the tax incentives that they could receive for this choice. If you operate your dental practice as a sole proprietorship or partnership and you hire your child that is under the age of 18, you will not have to take Social Security or Medicare taxes out of their check. This exemption not only applies to wages earned by your child but also the portion of those wages that is owed to the business.
Additionally, if your child is over the age of 18 but still under 21, their wages are not subject to the Federal Unemployment Tax Act. It is important to note that some of the tax exemptions may not apply if you hire your spouse to work at the practice.
To ensure that your business can claim the tax benefits that accompany hiring a family member, you should not treat your family members as special. This means that you must follow the same protocols that you would with all your other employees:
- Ensuring your family members work their assigned hours and wages are paid in proportion to the number of hours worked
- Distributing compensation on the same schedule for all employees whether weekly or biweekly
- Giving your family members tasks that are not frivolous or cannot be considered as simple household chores
Paying Self-Employment Taxes
The IRS collects self-employment taxes to fund retirement programs like Medicare and other Social Security programs. While individuals that are employed by a company will have Medicare and Social Security taxes deducted from their paycheck automatically, self-employed workers must pay these taxes manually.
To ensure that you are paying the appropriate amount of self-employment taxes, you must estimate the amount of income you are expected to earn in a given quarter. It can sometimes be difficult to make this determination if your business often experiences spikes in revenue.
If self-employment taxes are not paid on a quarterly basis, there can be several tax consequences. For example, the IRS may decide to issue a large tax bill or hold back your tax refund. In extreme circumstances, the IRS could issue a tax lien on property owned by your dental practice.
There are other tax tips that our accounting firm is prepared to share with your business.
Our Sacramento Tax Preparation Accountants are Ready to Work with You
If you need accounting assistance for your dental practice, you should contact an experienced Sacramento tax preparation accountant today. Cook CPA Group is dedicated to providing your business with accounting services that are tailored to your unique tax situation. To schedule a free consultation, contact Cook CPA Group at (916) 269-9281.