Thursday, March 28, 2013

How Should Dentist Title Car for Business Use?

I’ve heard people buy or lease cars on their business. How?

You buy it and title under entities name, not yours. That's the simple answer.

The better question is “why?”

I was only thinking if it can be use as a deduction or write off.

If used for business it can no matter how it's titled...

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Thursday, March 21, 2013

Dental Overhead Benchmarks by Category

A dentist recently asked us what the typical overhead percentages should be for an office by categories. Here are two helpful spreadsheets we came up with: Dental Overhead Benchmarks (based on production) and a Dental Overhead Benchmarks Based on Collections.

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Thursday, March 14, 2013

Dentist Saving a Few Dollars on Payroll Processing Now Paying the Price for the Cheapest Option

I saw the following quote today and it reminded me of what a client told me last night regarding this payroll company (that they're now suing.)

"on top of that when you are buying a practice and looking at student loan payments you look at what will be the cheapest route"

My client reminded me last night that he should have went with ADP or Paychex as we suggested; however, they went with the "cheaper" payroll service to save about $30/month. 

Now they may owe the various government agencies over $100k. 

Not to mention engaging and paying an attorney now to try and get some money from the crooked owners. 

What a mess and a shame.

Look for an upcoming article on how you can see if your payroll company can pass your 'stress test'.

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Saturday, March 9, 2013

Insights from the Nation's Capital Dental Meeting

While talking to the many dentists who attended the Nation's Capital Dental Meeting, a theme is emerging. Many associates are exploring scratch start ups rather than looking to purchase an existing practice. It makes sense. Many established dentists are holding on to their practices longer (recouping some of the losses from the economic downturn), even with the density of dental offices in the area, growth in the Loudon area is astounding, and this means there is a patient base to support new offices. Here is an interesting article from our friends at ETS Dental about whether to look at purchasing a practice or doing a scratch start-up.

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Friday, March 1, 2013

Is it a Hobby or is it a Business?

Here are some recent tax court rulings:

Income Tax—Private Coaching Activity Is Not a Hobby: The taxpayer was an assistant track coach at Oregon State University, an athletic coach for Nike, and had long been involved with coaching and other activities connected to track and field. He began private coaching activities in addition to teaching and coaching high school track. Over a period of nine years, the private coaching activities generated total losses of $153,488. The Tax Court held that the losses from the private coaching activities were not limited under IRC Sec. 183. The following factors weighed in the taxpayer's favor: (1) a business-like approach where he sought ways to improve his success and abandoned other activities; (2) expertise in track and field coaching; (3) devoting a large portion of nonemployment time to the activity that negatively affected his marriage and personal life; and (4) his salary earned as an educator/coach was $55,000 to $65,000, making it more likely that his private coaching expenses were a financial hardship. John Parks III , TC Summ. Op. 2012-105 (Tax Ct.).

Income Tax—Activity Engaged in for Profit (Hobby Loss): Taxpayer was a successful salesperson and also operated a sprint car racing activity (Sernett Motorsports). He began racing sprint cars in 1975, when he was 19, and raced for various racing groups for 15 years before purchasing his own equipment in 1992. During the years at issue, taxpayer owned multiple race cars and a full-sized semitrailer, and owned or leased a shop in Lakeville, Minnesota. From 2000 to 2010, he reported losses totaling $629,470 on Schedule C. Of the nine factors listed in Reg. 1.183-2(b) for determining whether taxpayer intended to earn a profit from the activity, the Tax Court found that four favored the IRS, two favored taxpayer, and three were neutral. Because Sernett Motorsports was a mature activity, the Tax Court placed particular emphasis on its history of significant, sustained losses and taxpayer's inability to reduce expenses or increase income in finding that taxpayer did not have an actual, honest profit objective in operating Sernett Motorsports for Section 183 deduction limitation purposes. John Sernett , TC Memo 2012-334 (Tax Ct.).

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