Tax-Deductible Expenses for Dental Practices... Are You Recording All of Them?

Conroe, United States - September 4, 2023 / STAC Bizness Solutions /

Tax-Deductible Expenses for Dental Practices Are You Recording All of Them?

Tips from Shawna Aho, CEO of STAC Bizness Solutions

Ive heard I should track every single expense. Is that true does it matter?

YES, its true and YES it does matter (if you want to maximize the profitability of your dental practice!) Recording all deductible expenses is crucial for dental practices for several reasons.

• First, diligent expense documentation ensures accurate financial records, aiding in transparent accounting and budgeting. Comprehensive record-keeping helps track the practices financial health, enabling informed decision-making and strategic planning.

• Secondly, accurate deduction reporting maximizes tax benefits. Deductible expenses reduce taxable income, potentially leading to lower tax liabilities and freeing up resources for practice growth and investment. Properly documented expenses provide the necessary evidence during tax audits, ensuring compliance with tax regulations and minimizing the risk of penalties.

• Lastly, maintaining thorough records establishes credibility with financial institutions and potential business partners. A well-documented history of your practices deductible expenses showcases fiscal responsibility, fostering trust and enhancing the practices financial reputation.

Tax planning should be a year-round process. Its so true. Your life will be a lot easier early next year when all your tax forms start rolling in. Forms like 1099s and W-2s do a lot of the tracking for you. You only need to transfer data over to your IRS tax forms and schedules. But what about the daily stuff, the expenses you incur as a part of your workday that no one else is documenting? There area lot of tax-deductible coststhat can add up when its time to file.

Generally, what are (and arent) considered deductible business expenses?

The IRS has two criteria for evaluating the validity of business expenses. First, is itordinary? Is it something that other companies in your trade or profession would commonly buy? Second, is itnecessary? Is it helpful and appropriate?

Warning: Some expenses that you think might be deductible are not. You cant claim the costs of personal items, but the IRS specifies two other types of expenses that cant be deducted: Capital Expenses and those used to calculate the Cost of Goods Sold. Questions? Ask us.

Here are some examples of expenses that you might not consider, but whichshouldbe recorded as they are incurred so you dont forget about them come tax time.

Advertising and promotion

Some of these expenses are obvious. For example, you might report printing costs for brochures, ad space bought, and postage for mailers and other business correspondence. But theres much more that fits into this category. Think about everything you do that helps promote your business, like expenses related to:

• Business cards
• Team sponsorships
• Your website (including start-up and maintenance fees)
• Search Engine Optimization
• Graphic design
• Workshops/Webinars

Insurance

Business insurance premiums, like liability or malpractice premiums, are deductible.

Postage and office supplies

Yes, theyre deductible if you need them for your practice.

Meals and travel

Youll want to familiarize yourself with the rules for this one. Theyre complicated, and the IRS looks closely at such deductions.

Business use of your home

If you have a home office, you may be able to take a tax deduction. As long as you completely separate your clinical duties from your managerial and administrative duties, dental practice owners are eligible to take the home office deduction. Just be careful. There are all kinds of regulations, restrictions, and exceptions here. Further, the home office deduction canbe an audit red flag.

Professional and legal fees

If your practice pays an individual or firm for services provided to help you operate your business, those fees are often deductible. This includes lawyers, accountants, and tax preparers, of course, but as always, there are exceptions.

As you can see, many allowable business expenses require detailed record-keeping. While you can do this on paper or in a spreadsheet, wed advise streamlining the process by using a cloud-based application specifically designed for this purpose. If youre interested in checking these out, let us know. As a Greater Houston-based team focused exclusively on the needs of dental practices, were uniquely positioned to help your practice grow revenue and profitability!

Wed love to have an initial conversion to see how we may be able to support your practice. To learn more, visit us atwww.stacbiz.comor call us at844-424-9637.

Contact Information:

STAC Bizness Solutions

809 W Dallas St. #1846
Conroe, TX 77305
United States

Shawna Aho
(844) 424-9637
https://stacbiz.com/