It’s tax season again.
To assist dentists with filing their taxes, ADA News has compiled a list of tips, with the help of the Academy of Dental CPAs, on what dentists need to know.
GATHER ALL DOCUMENTS. This includes W-2’s, IRS Form #1099, IRS Form #1099 Interest and IRS Form #1099 Dividends. It could also include itemizations such as stockbroker annual statements, crypto currency transactions, IRS Form #1098 mortgage statement, etc.
CHECK YOUR RECEIPTS. In addition to gathering their tax documents, dental owners should also make sure all financial transactions within the practice have been accounted for prior to filing, including making sure all receipts are accounted for and disbursements to include payroll, any depreciation of any equipment, and amortization of goodwill.
BE AWARE OF DEDUCTIONS. Besides the typical tax deductions like dental supplies, lab fees, and employee payroll, there may be other deductions that apply to specific circumstances. Examples: equipment purchases, continuing education and new owner startup costs could be deductions. How your business is set up as a taxing entity (employee, sole proprietor, corporation, LLC) can determine if the above expenses are deductible.
FACTOR IN ALL HEALTH SAVINGS ACCOUNTS. Health Savings Accounts — or HSAs — are tax-exempt accounts used to pay or reimburse certain medical expenses. If you have one, you may qualify for a deduction.
DON’T FORGET ABOUT IRA CONTRIBUTIONS. The total contributions you make in 2022 to all traditional IRAs and Roth IRAs can't be more than $6,000 in you are under 50, and $7,000 if age 50 or older.
LAST CALL FOR THE EMPLOYEE RETENTION TAX CREDIT. The statute of limitations is fast approaching as to when you can file your amended payroll tax form using IRS Form #941X for the ERTC. Also, be aware of “pop up” tax credit firms that claim to specialize in such credits.
CONSIDER USING A DENTAL ACCOUNTANT. Everyone can benefit from talking to an accountant about their options for filing. This can be especially helpful for dentists who are filing as owners for the first time. The Academy of Dental CPAs recommends taking the time to interview candidates and ask about their expertise and experience working with dentists.
To learn more about managing debt and creating a financial plan for the future, visit ADA.org/money.
Note: The information in this piece is not intended to be, nor should it be construed as, tax, accounting or legal advice. Readers are urged to consult a qualified professional when seeking such advice. The ADA makes no endorsement of the above advice, nor of any website or organization mentioned in the above piece.