Dental practice tax planning is important in keeping your dental practice profitable and successful. Dental practice owners may not realize how much money they can save by being proactive about tax planning. Tax laws change yearly, so it’s important to work with financial and legal professionals who can help you minimize, defer, or eliminate the taxes your dental practice owes.
As the owner of a dental practice, you are busy managing your staff, ensuring your patients receive high-quality care, and running the day-to-day practice. The attorneys at Mahan Dental Law will save you money and reduce your tax liability. You will receive skilled legal guidance and advice to reduce your tax liability. Contact Mahan Dental Law today to schedule your free initial consultation.
The Benefits of Dental Practice Tax Planning
Most dental businesses operate as sole proprietors, LLCs, or partnerships. As a result, prudent tax planning for your business and your personal income taxes is essential. Saving for retirement is a significant concern for many dental practice owners. Tax planning allows you to save strategically for retirement and keep as much of your hard-earned income as possible.
Tax planning can save your dental practice significant money, and the money you save in taxes can be earmarked for long-term investments and gains. You can choose whether to dedicate tax savings to retirement plans, fixed-income instruments, or real estate Investments.
When you work with Mahan Dental Law, we will carefully review your tax returns and business goals. We can assist you in addressing any discrepancies that have already occurred and take action to plan more effectively for the next year. Some of the facets of your dental practice in which we can assist you in optimizing your tax saving include the following:
- Maximizing medical benefits
- Retirement plan selection
- Business structure selection and optimization
- Asset depreciation and leasehold improvement expensing
- Saving money on taxes by hiring family members
- Internal employee opportunities
Realize Tax Savings Through Dental Practice Tax Planning
The primary goal of tax planning for dental practices is to save dental practice money. When done effectively, tax planning can yield long-term savings for your dental practice. There may be many tax benefits your dental practice could be obtaining with enough tax planning. The more money you’re able to save from tax planning, the more you can dedicate those assets to investments that can yield multiple returns in the long term. If your dental practice is paying over 30% of your earnings in federal, state, and self-employment taxes, there’s a likelihood that you are overpaying. Tax overpayment can be corrected in many cases.
Maximize Retirement Planning Benefits
As a small business owner, saving for retirement is an important priority among dental practice owners. By engaging in careful tax planning, dental practice owners can optimize their retirement planning benefits. Choosing an appropriate and effective retirement plan helps owners of dental practices make the most of their savings. Avoiding paying taxes on retirement plan contributions is impossible, but your tax liability could be deferred and reduced by making contributions to a retirement plan.
Compliance with Tax Laws
State and federal tax laws are complex and difficult to understand. Owners of busy dental practices don’t have time to read through all the changes in tax laws. As a result, it’s difficult for dental practices to comply with regulatory laws on their own. Nearly every year, tax laws are amended or eliminated, or new tax laws are added.
When you work with Mahan Dental Law, you can rest assured that we will help your dental practice comply with the current tax laws. When you work with our attorneys, you will have peace of mind that your dental practice will continue to comply with federal, state, and local tax laws.
Dentists May Have an Increased IRS or State Audit Risk
Certain dental practices may have a substantially increased risk of getting audited by the IRS. When a dentist owns the building where his or her practice is located and leases the building back to the practice, the risk of an audit may be increased. Failure to consider a tax law that requires income to be characterized as nonpassive under certain circumstances can lead to red flags resulting in potential penalties and fines.
This isn’t the only risk dental practice owners face. Other risks include dentists earning more income than the national average. Dentists who earn over $200,000 in annual income face an increased likelihood of being audited. Dental practice owners with a business income of over $1 million face the greatest risk of an IRS audit.
Minimizing the Risk of a Dental Practice Audit
An essential part of tax planning is avoiding and preparing for a potential IRS or state tax agency audit. Limiting the risk of paying penalties associated with artists requires sound record-keeping practices and documentation of all relevant tax considerations. The attorneys at Mahan Dental Practice can review your record-keeping practices and help you develop better strategies to avoid dangerous record-keeping. We regularly work with financial experts, including CPAs, to minimize the risk of an audit. Even with the best practices, avoiding an audit isn’t always possible.
Some characteristics of your dental practice or income level can trigger an audit. Preparing for a potential audit can help you defend your dental practice and avoid expensive tax penalties. Creating an effective tax strategy can help you avoid raising additional red flags and make the audit process go more smoothly.
Reach Out to a Dental Practice Tax Planning Attorney Today
Mahan Dental Law offers clients seamless tax planning and compliance services. We will work with you to answer your questions and develop custom-made tax planning solutions based on your unique needs and goals. Taking the time to engage in efficient tax planning can benefit you significantly in the future. Our attorneys work with tax experts and financial planners to provide comprehensive tax planning services. Contact Mahan Dental Law Practice today to schedule your free case evaluation and learn more about how we can help you.
