Deductions and Grants – Yours For The Taking!

You could be a manufacturer – at least in the sense of qualifying for the domestic production activities deduction (DPAD). DPAD is a deduction equal to 9% of the net income generated from eligible activities. To be eligible you have to manufacture, produce, grow, or extract property within the United States.

Activities of the dental office that could potentially qualify might include: on-site production of crowns, inlays, onlays, and other restorations using CEREC technology. Operation of in-house labs to produce retainers, study models, and appliances could also qualify.

That said you still avoid the medical device excise tax, since most domestically made dental devices avoid the tax because they are not required to be listed with the FDA. These items are not expected to be taxed: crowns, bridges, dentures, veneers, and orthodontic appliances (retainers etc). As you recall, the excise tax on medical device manufacturers is a 2.3% tax on taxable medical devices intended for humans.

On a separate note, you could also qualify for the Ohio Workers’ Compensation safety grants! The items available for the Safety Grant have changed – they now include items that would assist healthcare offices of all kinds in patient care. To be eligible, you must be current on your BWC premiums, demonstrate a need for a safety intervention, and have active BWC coverage with four past payroll reports for private employers. To get started, review the link on BWC’s website. Gather your information and schedule a visit by a BWC safety consultant before you complete the application. Refer to our blog post from March 25th.

There are significant changes coming to Ohio’s Workers’ Compensation program in 2015. William Vaughan Company will be hosting a free seminar part of our Client Knowledge Series called Modernizing the BWC to be held on September 23, 2014 at Stone Oak Country Club – sign up here!

Dental Financial Wellbeing

Are you a dentist just out of dental school with a practice to run and you’re not prepared for the business aspects? You might be making financial mistakes every day and not even know it. You could have major financial problems coming your way and won’t know it until it’s too late.

Across the country dentists are struggling. The percentage of dentists who describe themselves as “not busy enough” is increasing all because of a growing supply of working dentists and shrinking demand. If you find yourself with more time than patients, you could be in trouble. With dental care among adults decreasing and the continuing changes in dental insurance, it’s harder and more important than ever to get control of your finances.

Financial decisions – For some dentists, every financial decision causes panic, even the routine ones. If you don’t have sufficient cash flow, you won’t have the money to confidently spend on the things you need to grow your practice. Some of this can come from poor management of overhead. As a percentage of your revenue, you should be running your practice at about 55% to 60% overhead. Anything higher than 60% can mean you are heading for disaster.

Debt – If you’re afraid of debt, this can only make the problem worse. When you try to pay cash for everything, it means you don’t have cash things that come up, and this puts you in a position where your problems feed one another and send your finances into oblivion.

Retirement – Poor cash flow also leads to poor long-term savings, which can delay and dramatically reduce the quality of your retirement. If your money is sunk into overhead costs and tax bills, you won’t be able to adequately save for retirement. To maintain your current lifestyle after retirement, you need to manage your money intelligently today.

Are you spending more time managing your practice than seeing patients? If so, you need help, before it’s too late. Seek financial guidance now, and get your practice back on track.

Dental Practice Spring Checkup

In addition to providing for you and your family, your dental practice is a part of this country’s small business job creation engine. Small businesses make up 99.7% of U.S. employer firms and account for 64% of net new private sector jobs.* Conducting an annual review of your practice finances can help keep your business healthy and growing.

 

Management

No doubt you are pivotal to the success of your practice, however, at some point it’s important to focus on bringing up the next level of management, especially if you would like to sell your practice or pass it on in the future. While mentoring the key individuals who can effectively run the business, don’t forget about key person insurance for them. It’s designed to protect your business if you, a partner or another key employee were to die prematurely.

Plan ahead

What would happen to your practice if you or one of your key employees could no longer work? Unless you’ve planned ahead, the practices’s continued success, continuity of management and the future of all the families your practice supports could be jeopardized. Would the absent employee’ family — which could be yours — be fairly compensated for their interest in the practice if that interest needed to be sold?

A buy-sell agreement combined with key person insurance can help relieve concerns you may have. Work with your financial professional and attorney to make sure the agreement is drafted properly to address your and your practice needs.

Risks

Do you have appropriate processes and procedures in place to handle human resources and compliance issues, such as the new health care coverage rules under the federal health reform law? When was the last time you reviewed your practice’s insurance coverage with your financial professional? You may discover that your practice does not have all the coverage it needs in this litigious climate. Ask about umbrella and general liability insurance.

* Frequently Asked Questions about Small Businesses, SBA Office of Advocacy, September 2012