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Tax Credits For Your Dental Practice

Do You Want Tax Credits For Your Dental Practice?

Did you know? – Dentists who pay more than 30% in federal, state, and self-employment taxes combined may be overpaying their fair share. A dental tax consultant can help you save your tax. Wondering how? Here are our best tax saving tips for dentists compiled for you. So, read on to learn how you can save tax as a dentist.

There have been significant changes to both high-income individuals and small businesses with the new tax law. Since you are a dentist who probably falls into both of these categories, be sure to familiarize yourself with the major changes as soon as possible.

Over the years, helping dentists save tax, we at Sigma have realized that about 95% of all our clients were paying way more in taxes than what they owed. The reason? Poor tax planning for dentists by CPAs who don’t specialize in dental practice accounting. Many CPAs fail to take advantage of all of the opportunities offered by the U.S. tax code because they simply aren’t aware of them. Here’s how you can get the benefits for your business.

1. Expense Your Equipment

Deductions under section 179 help you reduce your taxable income by accelerating how you expense new equipment. Buying new or used equipment can immediately be expensed up to $1,000,000. Having said that, if you purchased equipment worth more than $3.5 million, there are limitations. Call one of our expert dental accountants at Sigma to understand how you can use these expenses to save taxes.

Bonus depreciation can accelerate the expense process for new or used equipment. As an alternative to writing off 100% of the equipment’s value, you can depreciate the balance over the Modified Accelerated Cost Recovery System (MACRS) life.

2. Perform A Cost Segregation Study

Did you build, buy, or renovate your office building in the last 6 to 12 months? If yes, consider performing a cost segregation study.

How do cost segregation studies work? It allows you to use bonus depreciation to reclassify and expense some construction and renovation costs immediately using shorter depreciation classes.

A CSS can be complicated to undertake if you aren’t an expert at accounting. Fortunately, we have a qualified and certified team of Dental CPAs at Sigma who can help you perform the study.

3. Are You Appropriately Preparing For Your Retirement?

Are you deferring your wages into a 401(k) to prepare for your retirement? If yes, you can contribute and defer about $19000 if you are under the age of 50 and about $25000 if you are over the age of 50.

If you don’t have a plan for your retirement yet, you’re making a grave mistake! Talk to an expert today and get a customized program that may include contributions to an Individual Retirement Account (IRA). You can contribute about $6000 annually towards an IRA to save up on the 3.8% investment tax.

Additional Things To Consider –

  • Consider Roth deferrals or pre-tax deferrals.
  • Utilize the SIMPLE IRA plan for employees
  • Check out a 401(k) with safe harbor
  • Establish a defined benefit plan that is cash balance based

Jigna, our principal, is a retirement planning expert who has helped multiple dentists plan for a stable future. Join them on their quest for growth and stability by booking a call with us.

4. Use Your Family To Your Businesses’ Advantage

If you have children, you probably give them pocket money for expenses. Use this to your advantage by employing your children and participating in the IRS-approved strategy to reduce your payroll taxes.  This is a Win-Win as you get the tax saving while your children get money for their expenses or even college.

Unemployment taxes are not due until children turn 21. Additionally, they are not liable for payroll taxes, Social Security, Medicare, or unemployment taxes until they turn 18. They also will not be subject to the FICA and Medicare taxes on their wages. LLC owners can benefit from family tax breaks, just like sole proprietors.

Bonus Tip – Your Child’s College Education In The Future Can Save You Money In The Present.

If you plan on sending your child to college (Which you most likely will and should), you can set up a 529 Plan.

What’s a 529 plan? A 529 plan is a tax saving instrument where the contributions are tax-free, as long as the distributions are used for qualified educational expenses like college. Some states also offer additional tax benefits for a 529 plan.

You’re probably still fairly confused with all of this. Do you want help? Allow us to unburden you from taking care of your financial health. We at Sigma always strive to ensure that businesses that work with us are healthy and growing by providing the best dental accounting and dental bookkeeping services for them. Feel free to book a meeting with us, no obligations and no strings attached. The coffee’s on us.

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tax planning for dentists

Tax Reduction Tips For Dentists

We’re moving closer and closer to the holidays (Woo Hoo!), and this is perhaps the best time to look at your books and ensure your financial health, just like your patient’s oral health, is in good shape. Tax planning is your biggest asset when it comes to tax reduction and tax minimization. A certified professional tax planner in Maryland can help you reduce your tax burden and ensure that you take home what you rightfully earned.

In today’s blog, we’ll take a look at some tips we have for dentists who wish to save taxes with the help of professional tax preparation. If you have questions about your taxes or don’t know what deductions you should claim, then speak to a Certified Public Accountant (CPA) from our qualified team. At Sigma, we are dental accounting specialists.

Best Tax Reduction Tips For Dentists

Tip 1 – Ensure Your Business Entity Structure Is Set Up Appropriately

If you’re a new dentist, you might have started as a sole proprietor to save tax until you gain revenue. Many dentists are still filing their taxes as C-corps, which might not be as advantageous as you may think. Consider filing your taxes as an S-corp, which will ensure your business entity structure is appropriately set up to ensure growth. Talk to a dental CPA in Maryland today to understand how you can switch from filing taxes as a C-corp to an S-corp. A professional dental accountants can help you make this change retroactively as well. A member of our certified dental accounting firm can help you understand the benefits of filing your taxes in the correct category.

If you’ve set up a DPC or a dentistry professional corporation when setting up your business, then you made the right decision. You can “share income” with your family members as dividends, provided they work with your practice at least 20 hours a week throughout the year. You can share up to $30,000 without significant tax implications per member of your family.

Unsure if you’ve set up the business entity structure currently? Contact Sigma today to get a free consultation and to learn why dentists need a specialized dental accountant.

Tip 2 – Share The Tax Burden By Employing Your Kids

Children age six and above can legally be employed by a business in the United States. You must consult a professional Dental CPA like Sigma to learn how you can use the annual tax-free limit to share your tax liability with your kids. These limits are updated regularly, making them difficult to track but easy to implement if done by a professional.

You’ll be able to pay your kids by showing how you use them as models in your marketing and advertising or how they contribute to the upkeep of your space. This tax-free money that you can give to them every year can be used to fund their college education, pay for private school tuition, or be invested into a ROTH IRA.

Talk to a professional dental bookkeeper and accountant today to ensure you set your children up for success in the future.

Tip 3 – Add An Accessible Website To Your Businesses’ Marketing Arsenal

If you don’t have an accessible website to help you market your business, you’re missing out! The world is digital, and if you don’t have a digital presence in today’s day and age, you practically don’t exist.

The IRS has allowed dentists to write off up to 50% if you upgrade to an accessible dental website. This move aims to ensure adherence to the ADA – Americans With Disabilities Act. Most dentists think that the ADA only applies to physical offline locations, but as things quickly move online, various online assets like an accessible website become a necessity for any dentist.

If you’ve recently upgraded to an accessible website or plan on moving to a new website, then talk to a professional CPA for Dentists in Maryland and understand how you can use that to your advantage

Tip 4 – Prepare For Retirement

You may have just entered the industry and may not plan to retire anytime soon, but it never hurts to prepare for the future. Generation wealth for dentists can be built by accurate planning and timely execution.

There are many options available to help you plan for a stable retirement, right from a simple 401(K) to different kinds of IRA and everything in between. These options might confuse you, a dentist, but a specialized dental accountant like Sigma knows which plans are suitable for the type of investor you may be.

The plans you choose will be dependent on the size of your practice, your age, number of employees, so on and so forth. Talk to a dental accounting specialist who can help you plan for your retirement and ensure the wellbeing of your employees when the time comes to move on.

Tip 5 – Ensure You Claim All The Necessary Deductions

Did you know you can claim tax deductions on the annual holiday party you organize during the festive season? You can claim up to 100% deductions on six meals and entertainment if you invite all of your staff to the function. The deductions you lose by failing to reclassify these expenses into a separate category amount to 50%.

A professional tax consultant for dentists can help you classify your claims and ensure you utilize tax deduction to the maximum extent possible. That’s why it’s crucial to hire the right dental bookkeeper and dental tax consultant.

These five tips will help you save up on your tax liability and ensure that you prepare your taxes while providing maximum benefit to your dental practice. Talk to one of our experienced dental accounting team members to learn how we help dentists prepare taxes and ensure compliance while saving you money.

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Specialised Dental Accountant

Does A Dentist Need A Specialised Dental Accountant?

Several years ago, a friend of mine told me this story. There was a small but thriving dental practice owner in the tri-state area who lost $350,000 over the course of 24 months. Surely you wonder why he lost the money? The simple answer – Employee theft. Their trusted administrative assistant was quietly embezzling money out of business and into their own pockets.

So, how did you come to know about this? By meeting a professional dental accountant. The local CPA they had hired was unable to spot this nefarious activity because they didn’t specialize in dental accounting and didn’t consider the possibility that the funds were being misappropriated.

What can we learn from this story? The need for specialized dental practice accounting. That’s correct. So to answer your question, Yes, a dentist does indeed need a specialized dental accountant.

The Need For A Dedicated CPA For Dentists

There are a fair number of reasons why a dentist needs a professional dental CPA. They can help you cut costs and grow your revenue with the help of financial housekeeping.

The job of a dental account is not just keeping track of your books or maintaining your accounts but also ensuring that you avail of all the schemes and programs run by the government to help small businesses. They also monitor that you’re always compliant with the policies. Tax preparation and optimization is another vital task of any professional dental CPA.

Several experienced CPAs in Columbia, Maryland, provide virtual CFO services aimed at helping dentists scale their practice with the help of budgeting, forecasting, planning, and strategic implementation of financial decisions. For ambitious dentists looking to expand and scale their dental practices, the guidance and mentorship of a virtual CFO are invaluable.

What Should You Consider When Choosing A Dental Accountant

Many small business owners and dentists tend to overlook some crucial elements when selecting a professional dental accountant for their business which can end up costing them a lot in the long run. Here are some factors you should consider when hiring an experienced dental CPA for your dentistry practice.

1. Range Of Services

There are CPAs who are generalists, and then there are CPAs who specialize in serving a particular segment of the industry. During your next meeting with your CPA, ask them about their range of services and how any additional services that they recommend may have an impact on your revenue. If your CPA offers only a few services, then it may be time to switch. Call our expert dental accountants today to schedule a free consultation.

Common Dental CPA Services Include –

  • Payroll Services
  • Compliance Assistance
  • Corporate And Personal Tax Management
  • Helping With Fundraising
  • Financial Advice And Planning
  • Strategic Mentorship And Guidance

2. Level Of Experience And Expertise In The Dental Accounting Field

CPAs serve a vast array of customers and clients across industries which is why you must look at the level of experience and expertise they bring to the table when looking for your next dental CPA.

An experienced dental accountant will help you optimize your tax position, claim necessary deductions, avail specific governmental programs, and save money. Dental accountants can often act as the jack of all trades and help you achieve your business goals quickly while ensuring accounting compliance.

3. Communication And Transparency

Accounting is a complex field, and many dental accountants don’t transparently disclose their activities and strategies. An accountant who isn’t openly communicating, guiding, and mentoring you may not be a good fit for your business. Therefore, it’s vital to look at the level of transparency and the quality of communication they offer.

4. Value For Money

Businesses function on two essential components, revenues, and costs. The value you derive from incurring the cost of hiring a professional dental CPA should be more than the cost itself for it to be a valuable investment.

Choosing the best option doesn’t mean choosing the cheapest one. It would help if you weighed the benefits of your investment with the costs. We at Sigma offer packages built for small dental practices to help them grow with ease. Contact us today to learn more about our offerings.

5. Clarity And Transparency Of Fee

For you to plan your dental expenses effectively, dental bookkeeping and accounting costs must be transparent and clear. You don’t want any unpleasant surprises down the line, do you? Ensure that the dental accountant you hire offers transparent pricing and is open to discussing all the costs involved in hiring them upfront before signing you on as a client.

6. Ability to Answer Complex Questions

You depend on your dental account for all kinds of things that have to do with your money and finances. Would you want to work with someone who isn’t able to answer complex questions you may have from time to time? No, you wouldn’t. As someone who has a background in accounting, you’d expect your dental CPA to answer any type of money-related question you may have openly and transparently.

The best people to work with are those who can always provide you with the correct answers whenever you have a question. They can only do that if they have a firm grasp of what they must do and what dental practices need from their accountants.

So, there we have it! We hope you understand why we believe that dentists need specialized dental accountants. Do you need help finding a good dental CPA? Not anymore! Get in touch with the best dental accountant in Maryland today and schedule a consultation.

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dental bookkeeping

7 Reasons A Dentist Should Hire A Professional Bookkeeper

Dental practices require extensive accounting and bookkeeping to keep the practice running smoothly. Many dentists ignore accounting, auditing, and bookkeeping for their dental practice until the end moment, which often results in chaos during the filing season. You may think, why do I need a professional bookkeeper when I can have my spouse, assistant, or a friend do it? Well, this blog will answer your question and many others. So let’s begin

What Do Dental Accountants And Bookkeepers Do?

The job of a professional bookkeeper may look simple, but it is often a lot more complex than it seems. A dental bookkeeper requires proper knowledge and understanding of the law, the tax code, and various accounting standards. A bookkeeper usually handles all the financial transitions for any dentists or medical practitioners, records your purchases, sales and expenses, develops systems, and much more.

Experienced bookkeepers like the team at Sigma also helps dental practices get a holistic snapshot and overview of their businesses’ finances, projected growth forecasts, and more. The value of data and information that you get access to by working with a professional dental bookkeeper is immeasurable, which is why we always recommend small businesses hire an experienced dental bookkeeper.

Top Reasons Why You Need A Professional Accountant For Dental Office Bookkeeping?

A novice may get the job done, but would they do it well? The answer to that can only be found when you hire a professional dental CPA for your dental practice.

Reason 1 – You Can Focus On Your Core Competency

You chose the noble profession of helping your patients get better. Why not focus on doing that while allowing professionals to help you manage your businesses’ finances? A professional dental bookkeeper will enable you to focus on your core competency by taking over all the hassles of dental taxation, bookkeeping, accounting, auditing, and more.

Reason 2 – You Are Always Aware Of Any Potential Cash Flow Issues

Running a small dental business or a medical practice is hectic. Some invoices or dues may slip your mind, which can end up putting you in a sticky situation. A professional dental bookkeeper is tasked with keeping track of all your income and expenses and can inform you of any potential cash flow problems they may predict coming and even make necessary provisions for it.

Reason 3 – The Tax Season Isn’t Chaotic Anymore For You

A professional virtual bookkeeper for dentists works with your accountant and tax consultant to ensure that all your tax liabilities are cared for while ensuring that you don’t pay a dime more than you owe. The taxes saved will far outweigh the costs of hiring a professional bookkeeper for your dental practice.

A bookkeeper will also provide you with a year-end financial statement which will help you plan the following year for your small business and prepare for any expansions based on your growth and forecasts.

Would you like to hire an experienced team for dental bookkeeping service at an affordable price? Look no further! Sigma is here to help you. Get in touch with one of our expert medical and dental CPAs today.

Reason 4 – You’re Always Prepared For An Audit

It is natural to apply for grants, loans, and programs offered by the government in the current environment. In the unfortunate scenario that your small business or dental practice is audited by the IRS or state, having up-to-date records of transitions will help you navigate the complex maze of compliances.

We at Sigma expect to see an uptick in the number of audits conducted by the government agencies for small businesses that have availed Covid-19 schemes and benefits. Is your dental practice prepared for an audit? Contact our CPA for dentists in Maryland to ensure your books are maintained to the tee, so you’re always prepared for an audit.

Reason 5 – You Can Secure Additional Funding And Finances Through Loans With Ease

If you’re ambitious and looking to expand your dental practice, having your books in place is vital. Investors and creditors such as banks often require detailed financial records, forecasts, analysis reports, and more which can be a chore. A professional dental bookkeeper ensures all your documents are updated at all times, which makes it extremely easy for you to secure funding.

If you’re a veteran and plan on retiring anytime soon, accurate financial records make it easy for you to sell your business when the time comes. Is it time to start planning your retirement? Get in touch with one of our expert dental CPAs from Maryland today!

Reason 6 – Improved Work-life Balance

Spending all your time working on your business means missing out on the finer things in life. Hiring a professional dental bookkeeper helps you free up your time to spend time with your family and friends while your business works for you and not the other way around.

Reason 7 – You Ensure Everything Is Paid On Time

Dentists always pay their debts! And paying them on time ensures that you don’t end up paying hefty fines or interests. A bookkeeper ensures bills are always paid on time to keep you debt-free.

We hope by now you understand the importance of hiring a dental bookkeeper for your dental business. These reasons make the benefits of hiring a professional CPA for dentist and dental accountant for your small business or dental practice abundantly clear. If you’re looking for the best dental accountants and dental CPA in the United States, then you can pause your search. You’ve found them! Contact our team of professionals at Sigma today to schedule a meeting with one of our expert dental CPA to learn how we can help you get top-notch accounting and bookkeeping services while keeping your costs on the down-low

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Three Things Dentalpreneurs Need To Create Generational Wealth

Three Things Dentalpreneurs Need To Create Generational Wealth

Building a great company comes down to three things: planning, execution, and accountability.

1 -Build a Solid Foundation to keep as much income as possible by getting the proper corporate and income structure, tax planning, accounting, payroll, and financial platform. Forward-thinking small business owners understand the importance of reliable reporting based on accurate data. Are you leveraging data to make sound business decisions?

2 – Grow Income & Wealth by cash flow management, following up on the “big picture” and “long-term vision of the practice, tapping on the growth opportunities in new markets, products, and new service lines. What are your cash leaks? Are you creating maximum cash or losing it down the drain? Do you understand the difference between profits and cash? For example, you could make $250K profit a year but when you look at the bank account and it shows only $10K. Where did the rest go?

3 – Create Wealth by ensuring that the risks are spread out through passive income investing, taking advantage of maxing out tax-advantaged retirement saving accounts, and funding 529s. Saving income into a qualified retirement plan starting at the youngest age possible can reward Dentalpreneur with the power of compounding growth over a lifetime. The longer recurring deposits can be invested in a diversified portfolio, particularly when savings are pretax and grow tax-deferred over decades, the greater the likelihood that this will be the most beneficial financial opportunity available. Do you have assets that produce alternative income so that if you stop working the income still comes in? Have you re-evaluated and devised a retirement plan to save by adding a generous match and allowing a profit share component to shelter money from Uncle Sam via tax savings?

Two major hurdles to building wealth are starting late and high debt!

There are THREE types of dental practice owners when it comes to creating wealth. Type 1 are those that are carefree -they sleep and don’t think about creating wealth and financial freedom until it is too late. Type 2 are those that are too busy working to work ON their business… This is where most dentists are. They work long hours generating income but are unable to use that income to grow and create wealth. Type 3 is where we all want to be. We want to go to sleep and when we wake up, we are richer than when we fell asleep the day before!

Jump on complimentary 30 minute consultation. Book your call today, click here

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dental practice accounting

Not Every Dental Firm Hires The Right Dental Accountant

Not every dental firm hires the right dental accountant. And if you hire the wrong accountant, not only will they make a mess of your finances -­ they’ll cause your business to literally bleed cash!

But how do you know when you have the wrong Dental CPA on your team? What red flags do you look for in an accountant that should make you run in the opposite direction?

 

What do you look for in the RIGHT Dental accountant?

1 -They Don’t Understand Your Business

Not all businesses are created equal, and the accounting methods and practices that work for one company will fall flat with another.
A skilled Dental CPA will design specialized reports that they can use just as you use a patient’s radiographs for evaluation, diagnosis, and treatment planning.

The Dental CPA analyzes such questions as:

  • How is the financial health of your practice?
  • What can you do now to minimize taxes next April?
  • Is the office using “best practices” based on the CPA’s knowledge of other successful offices?
  • Is the dentist working smart or just working hard to generate revenue?
  • Is the production appropriate for the number of personnel?
  • Is it time to add another dentist?

2 – They Do The Bare Minimum… And That’s About It

Some dental accountants want to get the job done with quickly and will cut corners, others just want to do the bare minimum.

When you hire a dental accountant that only does the bare minimum, you’re losing out on an opportunity to both save and make money -­ which will hurt your company’s profitability in the long run.

Part of the value of hiring a dental CPA is the expertise they bring to the table in finding innovative ways to save your business money. The right dental accounting firm can help you find grants and government funding that can decrease the amount of money you need to spend in order to conduct your business activities. They should also be able to find creative dental tax relief options that put more money back into your pocket come tax season.

3 – They Can’t Explain Your Financials In A Way That Makes Sense To You

As a dentalpreneur, you need to keep your finger on the pulse of what’s going on in your practice -­ including your financials. And it’s your accountant’s job to explain your financials and break them down in a way that makes sense to you -­ free of confusing statistics or impossible-­to-­understand financial jargon.

If your accountant gives you the run around whenever you ask about your finances and can’t explain the state of your financial affairs in a way that makes sense, chances are they’re draining your money.

If your dental accounting firm talks circles around financial issues and can’t explain the current financial state of your business, it’s time to find a new accountant.

4 – They Don’t Know The Meaning Of The Word “Organized”

With so many things to manage -­ like managing the books, filing your dental taxes, generating financial reports, and looking for money-­saving opportunities for your business -­ you need to work with a professional dental CPA who’s on point, organized, and doesn’t allow anything to go unnoticed. Because if your dental accountant is disorganized, you WILL lose money. When you work with a disorganized accountant, things can and do fall through the cracks. Important tax documents will be filed late (or not at all). Reports will be inaccurate. Your books will be balanced incorrectly.

All of which costs you money. If you want to protect your money -­ and your dental business -­ you need to work with a specialist dental accountants at the top of their game. The kind of accountant so organized, the thought of a single number out of place keeps them up at night!

Ask your accountant the systems they use to stay on top of their clients’ finances. An organized accountant will have highly structured systems for ensuring their client work is managed properly.

Is Your Current Accountant Bleeding Your Money? Don’t Worry Sigma Accountants Is Here To Help

Sigma Accountants is a full-­service Dental CPA firm that specializes in dental accounting, taxation, and financial services for dental practices. We offer the highest level of dental CPA services to our clients to take the stress out of financial management with dental accounting services tailored to your specific needs.

Our job is to make managing your dental finances as easy and simple as possible while offering creative solutions to put money in your pocket -­ not drain it.

When you work with us, you don’t have to worry about all those money-­murdering mistakes that bleed money from your business.

Our dental accounting firm offer:

• Financial reports that are easy to understand -­ even if finances aren’t your strong point (and if you don’t understand them, we’ll work with you until you do)
• A firm that’s dedicated to understanding your business -­ and overcoming the unique financial challenges your business faces in today’s market

We will work tirelessly to offer you the financial solutions you need to elevate your dental business and sleep easy at night, knowing the financials of your business are in the best possible hands.

Ready to stop working with dental CPA Firm that bleed your money and partner with the best team in the business? Get in touch with Sigma Accountants today for a no-­obligation consultation and learn more about how we can help take your dental business to the next level.

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dental accountants

Why A Real Dental CPA Is Better Than Any Software

As technology moves forward, the number of accounting softwares that claims to do it all keeps growing by the hour. You may think that software can replace a human dental CPA, but your assumption is unfortunately not valid. An experienced and reliable dental CPA in Maryland can never be replaced by algorithmically driven accounting softwares.

In today’s blog, we’re going to take a look at some of the fundamental reasons why any software can never beat a human CPA in Maryland. So, let’s take a look at some of the reasons that make a dental CPA invaluable to dentists.

 

Why Does Your Dental Practice Need A Specialized Dental CPA?

Before being a dentist, you’re a business owner who’s successfully running their business. A business owner has a whole host of duties and obligations, and as a dentist, you have even more responsibilities. Therefore, you need a dependable accounting firm in Maryland Columbia to help you organize your books and keep your business running smoothly.

An experienced dental CPA firm brings specialized expertise in helping dentists grow their practice, often exponentially. A dental CPA knows all the industry-specific deductions and subsidies you can claim to reduce your tax liability and increase the amount of money you take home.

A real dental CPA is also well aware of all the strategies you can use to plan your taxes effectively while you clear off any debt you or your business may owe. You’d be surprised to know that debt can be good under certain conditions.

 

How Can A Real Human Dental CPA Help Your Business?

A dental CPA firm understands your finances and uses them to illustrate opportunities and risks involved in your business. A Small Business Accountant from Columbia MD acts as an advisor and helps you grow your business. At the same time, you focus on providing the best healthcare services to your customers.

Are you looking to expand your business and improve the financial health of your business? Contact Sigma, the best accounting firm in Columbia, MD, specialists in dental practice accounting today.

 

Why Is A Real Dental CPA Better Than Any Software?

 

A Human Has Real-World Experience

We’ve developed excellent softwares like QuickBooks that can ease our lives. However, humans hold a significant edge over the softwares they have developed as any software lacks real-world experiences.

Experience helps a real dental CPA beat any robotic or computerized accountant with ease. These online bot softwares are meant to aid a real dental CPA, not replace them.

At Sigma, we use various softwares like LivePlan, Xero, and QuickBooks to aid our accounting and bookkeeping process. You can know more about us here.

QuickBooks is the leading cloud accounting software used across the country to enable collaborative accounting between dental practices and CPAs based in Maryland or across the country. This business management software allows CPAs to help businesses across the globe by providing growth-inducing insights.

We also help businesses that use Xero as their platform of choice. Xero allows businesses to take impactful actions that have a measurable impact on business performance.

 

A Human Understand Business

Businesses fundamentally function on two things, revenues and costs. Softwares can’t ascertain what type of expenditure is a long-term revenue-making expenditure and what’s an actual cost to your business.

The lack of human understanding is the biggest downfall of any accounting software, which is again why a real dental CPA firm is better than any software you can ever use for accounting and bookkeeping.

 

A Human CPA Brings Specialized Awareness And Insights To The Table

An experienced dental CPA accounting and tax services provider are well aware of the expenses that come along with running a dental practice. They bring specialized knowledge to the table and help you decide the most optimum equipment that your practice needs. They are well aware of the rapidly changing industry.

They are also cognizant of the common problems dentists and doctors may face in running their day-to-day practice. A dental accountant will stick by your side and help you navigate any complications that may come along the way.

 

A Human CPA Will Design Your Business According To Your Specific Requirements

A real CPA understands that not every business can be structured the same, and that’s why a reliable CPA in Maryland will design your business practice according to your individual needs and requirements.

If or when a partner has to join your practice, a CPA in Maryland will help you safeguard the interest of both parties.

 

A Human CPA Will Help You Plan For Your Retirement

In the pursuit of growing their dental practice, dentists often forget to plan appropriately for their future and retirement. An excellent dental CPA will understand your goals and work with you to ensure you achieve financial freedom and plan your retirement appropriately.

 

A Human CPA Is Emphatic

A human can understand situations and empathize with clients to help alleviate any sort of troublesome situations they may be in. A robot won’t stand by your side, but a human always will. Human empathy has no bounds.

By now, we’re confident that you understand why a real Dental CPA is the best choice for your business and why no software can ever replace a human CPA services provider.

Sigma is the leading tax accountant in Maryland that helps businesses with small business accounting services in Columbia, MD. If you’re looking for help with accounting, bookkeeping, and managing your business, please contact us today and learn how we can help your business grow.

 

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Dental CPA in Maryland

How To Find A Good CPA For Your Dental Practice

A Smile Is A Curve That Sets Everything Straight. Phyllis Diller

As a dentist, you sure love improving the smiles on your customers’ faces. But, does accounting and bookkeeping make you frown? According to other successful practicing dentists, availing services of a capable and reliable Dental CPA in Maryland will be the best gift that you’ll give to yourself.

Dental practice accounting can seem easy to an outsider, but as a Dental CPA firm, we understand all the complexities that come with running a dental practice.

If you’re reading this post, we can safely assume that you don’t have access to a dependable dental CPA and are looking to understand how to find a reliable Small Business Accountant in Columbia, MD, who can help you by providing Dental CPA services. Read on till the end to learn the things you should keep in mind when you hire your next Dental CPA firm.

Things To Keep In Mind When Finalizing Your Dental CPA Accounting Firm In Columbia, MD

1. Establish Your Requirements

You won’t perform a dental surgery before understanding why the patient needs the surgery. Similarly, why would you start looking for a dental CPA accounting solution without understanding why you need a specialized accounting firm from Maryland to help you.

A simple question you must ask yourself – Why Do I Need A Dental CPA?

If you can’t answer it, allow us to Sigma to answer. Contact us today!

If you are an experienced business owner who understands precisely what they need help with. In that case, our suggestion is to gain clarity.

You can gain clarity by asking yourself these questions –

  • Do you need help with strategy?
  • Are you looking to save tax using the experience of a tax accountant in Maryland?
  • Are you tired of maintaining records and want to outsource your bookkeeping?
  • Is compliance a massive hassle for you?

Once you are satisfied with your answers and clearly understand your requirements, it’s time to contact a professional dental CPA Firm in your area.

Don’t have a reliable Accounting firm in mind? Talk to us!

2. Begin The Hunt

Once you understand your requirements, you should begin your search. A great place to find a good Dental CPA is through a quick google search. Beware, ratings and reviews you see online can be faked, so look for someone in your vicinity and give them a visit. You can also ask your financial consultants, friends, family, or anyone you trust for their recommendation and go from there.

Look Into The Kind Of Credentials And Experience They Bring To The Table.

Most accountants hold a single degree, unlike Jigna M. Patel, the lead at Sigma, who holds a CPA, an MBA, and a CGMA. She’s also a QuickBooks® Online ProAdvisor and LivePlan Expert Advisor.

Software Matters!

There are numerous softwares used in the industry for accounting and bookkeeping. Most softwares are intercompatible. However, if you use a particular software like QuickBooks for your accounting, it’ll be highly beneficial to find an accountant who also specializes in using QuickBooks, which would make the workflow a lot smoother.

Specialization and Niche Knowledge

Many accounts are generalists and work with a variety of different clients and businesses. This makes them a good option for small business owners. However, as a dentist or a medical practitioner, your accountant needs to have domain-specific knowledge to make things easier for you.

A specialist is less likely to question you about the basic operations of your practice. A specialized dental CPA can also help you claim any deductions or tax credits that may apply to your business.

Proximity Is Essential

Thanks to the influx in technological solutions for accounting, the need for physical proximity is reduced to a fair extent. However, it is recommended that you find a dental CPA in and around the area you operate in so they are aware of the state’s laws and regulations.

If you ever need to go in for a discussion, physical proximity makes it easier to conduct strategy meetings. Sigma is an accounting firm in Maryland that helps dentists grow. Get in touch with us today.

Do Your Due Diligence

Look into their past clients or experiences. Ask around and see if anyone in the industry avails their dental CPA services and how happy they are with the results.

3. Understand The Costs

A business fundamentally runs on two things – Revenue and Costs. Once you find a reputable accounting firm specializing in dental and medical accounting, look into the costs associated with hiring them for your business.

Often, what may seem expensive initially ends up being cheaper in the long run when compared with the outcomes and results you achieve from buying the product or service.

4. Make The Switch

Change can often feel a bit terrifying. A minor hassle in the present can save you a lot of headaches in the future. Once you find a reliable dental CPA firm like Sigma, don’t be afraid to make the switch.

We hope by now you have clarity on the next steps you must take to expand your business and free up time for yourself. If you have any questions for us, please feel free to contact us. We invite you to drop by for a cup of coffee and discuss how Sigma can help you grow.

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Dental CPA in Maryland

11 $000 Mistakes You May Be Making as Dentalpreneur

You’re one of the highest-paid people in the country: dentists and specialists consistently rank among the most successful working professionals in the U.S.

Part of the American dream is to own your home and own your own business. In today’s business environment, there are many challenges facing the next generation in achieving the American dream. The repayment of student loan debt is one of those challenges. Are you looking for a Tax Accountant in Maryland to help you?

Studies show that recent dental school graduates can be overwhelmed with their student loan debt. Many are afraid of taking on more debt, such as that for starting or purchasing a practice. New and complex tax laws and burdensome government compliance can also be factors when new dentists choose not to own a practice. A CPA For dentists in Maryland can help you manage your finances and optimize your accounts to help you start, grow and expand your business. Sigma Accountants are the best Maryland based accountants for Dentalpreneurs

As a dental CPA and provider of accounting for dental practices, my role is to help dentists become entrepreneurs, and to guide them toward finding the rewards and minimizing the risks of realizing the American dream. Are you ready to realize your dreams? Contact our Accounting Firm In Maryland today!

11. Trying to pay off student loans or other debt too fast.

Dental CPA in Maryland

Every dentist coming out of medical school has a mountain of personal financial debt from student loans to credit card dues.  Besides starting a practice, paying off their student debt is the number one thing on a dentist’s mind, but one thing medical school does not teach you about dentistry is that you need to spend money to make money in a business. A reliable Dental Accountant in Maryland offering Dental CPA Accounting Services can help you plan for your future.  When first starting a practice, many dentists will shy away from taking a business loan because they associate their personal debt with their business debt.  What they don’t understand is if they take out the business loan, they will have the necessary capital to improve their business, allowing them to pay off both loans faster.  When first starting a practice, if the dentist puts the business first, the personal debt will take care of itself. Confused about your growth? allow our CPA Firm In Columbia MD to help you.

  • Your Goal should be creating savings, not “getting out of debt.”
  • You pay higher taxes if you have no
  • Principal reduction of debt is not deductible

If you didn’t know these, you need an outstanding accounting firm based in Maryland to help you. Contact us today!

10. Doing their own accounting.

dental and medical accountant

One of the biggest mistakes a dentist can make is trying to do their own accounting.  Most dentists do not know the basics of accounting, let alone taxes and hidden fees.  The best thing a dentist can do for their company is hire a qualified dental and medical accountant to handle their finances.  As a dentist, you should be focusing on your clients, and not worrying about what goes on the books.  Hire someone who went to school for accounting to handle your books because it will keep your finances in order and make your life easier.

  • Spend your “free” time doing things you enjoy, not learning accounting.
  • Makes income tax preparation easier and less expensive because records are more reliable.
  • Average cost is less than half the fee for a crown.

Contact Sigma, the best Dental Accountants in Maryland today to schedule a meeting.

9. Not keeping business and personal financial transactions separate.

It’s imperative that business and personal expenses are recorded separately at all times, irrespective of the size of the organization. One of the first things that small business owners should do is to open a business account and keep all of their business income in it.

The next thing to do is to work with a CPA to develop an owner compensation strategy defining how cash is separated from the business to maintain personal expenses. Your owner compensation strategy will be guided by aspects such as how much of your profits need to be invested back into the business, the time of payments for big business expenditures, your seasonal cash flow requirements, and your long-term personal financial plan.

  • Makes income tax preparation more difficult.
  • Exposure to potential IRS adjustments in the event of an audit.

Allow an expert Tax Accountant from Columbia MD to help you. Book an appointment today!

8. Doing their own payroll, including making payroll tax deposits.

Handling payroll for a dental practice is often thought of as a simple task. The truth, however, is that there are many minor errors that can easily lead to major problems and penalties.

Payroll errors can be frustrating and costly to both employers and employees. For employees, a mistake in state tax deductions can require an unexpectedly sizable tax deduction from an employee’s final paycheck of the year, at a time that coincides with the holidays. Missed hours or improper pay rates can also inadvertently decrease an employee’s pay, which may cause frustration and lasting resentment. These mistakes can negatively affect your employees and ultimately result in employer/employee strain.

For the employer, payroll errors can cause fines and penalties for improperly calculated tax obligations. Generally speaking, dentists aren’t experts in the complicated world of government tax regulations. At the same time, they’re legally responsible for any cases of misrepresentation or a failure to accurately report employment taxes to federal and state government agencies.

These mistakes can lead to audits and penalties — situations no business wants or needs. According to the IRS, more than 1.8 million tax returns were audited in 2016 for businesses with income between $200,000 and $1 million, and 978,564 businesses were assessed civil penalties. Even if these errors are caught before they are submitted, they can still cause countless hours of reprocessing employee paychecks and tax returns.

Given all of these complicated tasks and the potential for mistakes, processing payroll on your own can cost you more in the long run than what you may save initially.

  • Mistakes are costly.
  • Penalties can run 15% of taxes deposited late.
  • Outside services specialize in payroll and are not expensive.

Avail our qualified and affordable Dental CPA Accounting Services to give your business the attention it deserves.

7. Not understanding the difference between cash flow and profit

Another common accounting mistake being committed is not knowing the difference between cash flow and profit. Make no mistake: the cash that flows in and out of your business is separate from your profits!

This might seem like a fairly simple concept, but it’s an important one in accounting. It’s also something some small business owners sometimes struggle to understand. Most dentists and their in-house bookkeepers do not know how to read and understand financial reports. When the dentist requests the figures for a particular period from the bookkeeper, it is a common and costly mistake for the bookkeeper to provide the dentist with the profit figures. The dentist unknowingly thinks this is the cash available. The problem with this is that the profit amount does not represent the cash available for purchases. As a result, the dentist makes purchases and incurs overdraft fees and extra charges.

Profit is the result of revenue less expenses for a certain period of time. Cash flow is the money moving in and out of the business from the beginning of the month to the end of the month. The profit is computed after completing a profit and loss statement. Cash flow is computed after completing the cash flow equation and factoring in accounts receivable, inventory, and depreciation expenses.

Talk to a CPA in Columbia MD today if these concepts are new to you or you feel out of your depth.

6. Hiring friends or family or other inexperienced people to work in the dental practice.

Owning a dental practice can be profitable and rewarding. It’s pretty amazing to achieve your goals with the people you love by your side, especially when you know they’re doing their part to help you succeed. Yes, these practices can be very successful. But if you’re not careful, they can also crash and burn.

The problem is, doing business with friends and family tends to be very complex. Emotions and family dynamics often take over, clouding judgement and keeping a practice from meeting its true potential.

When recruiting employees for your dental practice, whether friends, family or other, look for people whose skills complement your own. For example, if you love spending time with patients but hate any kind of admin work, don’t hire someone else who has the same aversion to paperwork or your practice is likely to lack organization. Instead, choose people whose strengths match your weaknesses to ensure your practice has a good balance of skills.

  • Hurts practice to have inexperienced staff dealing with patients, especially the front
  • Hurts practice to have inexperienced staff dealing with filing insurance claims for patients.

Need help? Our Dental Accounting firm in Maryland is happy to assist your growth.

5. Putting off setting up a retirement plan until out of debt.

When it comes to achieving financial goals, procrastination is the enemy of success. The average dentist will need about $2.5 million to fund their retirement. Delaying funding for just five years will cost an additional $228,000! Don’t wait any longer, talk to an Accountant In Maryland today!

  • Review different types of plans and establish one as soon as you start working.
  • You Can retire in 20 years if you save consistently.

Talk about your retirement plans with a CPA For Doctors in Maryland. Get in touch with Sigma right away!

4. Focusing too much on interest rates and not monthly payment when borrowing money.

Managing debt properly is perhaps the most important challenge in overcoming financial stress and creating wealth throughout a career in dentistry. Managing debt incurred for student loans, practice purchases, and equipment acquisitions presents a major financial management puzzle to new dentists. For most young dentists, the solution to this puzzle is merely maintaining the lowest interest rates available and paying off the debt as quickly as possible. Is there any other way to manage debt?

The bigger issue is how to eliminate the debt with the most safety, while maximizing wealth creation (i.e., the ability to comfortably retire). Eliminating debt the wrong way can sabotage wealth creation and peace of mind. While a dentist will pay the lowest amount of interest expense by paying off debt rapidly, he or she will also forfeit a very large amount of compound growth potential that could have been realized by paying debt more slowly and having a plan to save 20% of income each year.

  • Focus should be on cash flow, monthly payment.
  • Longer term loans are better for creating savings and lowering taxes

A Tax Accountant based in Maryland can help you manage your debt appropriately while helping you prepare your taxes optimally.

3. Not setting up the proper type of business entity.

Choosing the right business structure for your dental practice is a vital decision that can have significant consequences for the future of your practice. If a dentist selects the wrong structure, it can cost their business thousands of dollars down the line. Choosing the correct business structure for your dental practice is a fundamental decision that will impact your business daily and should be guided by a specialized attorney.

The main factors to consider when structuring your business are: (1) the financial and tax consequences; (2) liability protection; and (3) flexibility versus formality. Selecting a business structure is one of the most important decisions you will make for your practice. When selecting the right entity, substantial tax, legal, and accounting expertise is recommended. It is advantageous to start your business on good footing, and while it may look daunting to hire expert consultants at the beginning of your endeavor, it is a valuable investment for your future success.

The proper structure of your dental practice will allow you to reap all the possible benefits and increase your chances at a successful practice. However, it is recommended for dentists to stay active in the process in order to ensure that the expert’s proposals reflect the needs and goals of your practice.

Tax Considerations

Tax benefits are a primary driver when choosing a proper legal structure for a dental practice. Key aspects include: taxation on income/profits; taxation on the sale/transformation of a practice; and the deductibility of practice expenses and starting costs. A proper business structure agreement will maximize tax opportunities and can greatly affect the profit margin of your business.

Liability Protection

Liability protection is another significant consideration when deciding between business entities. Because it combines features of a corporation with elements of a partnership, a limited liability company (“LLC”) can be tactical from a tax standpoint. Single member LLCs are taxed as sole proprietorships. Multi-member LLCs on the other hand, can elect to be taxed either as ‘S’ Corps or partnerships.

For certain dental practices, it can be advantageous to be the only owner and in complete control of the practice; there would be no requirement for seeking approval and or consent of any partners, members, or officers. With a sole proprietorship, there are also minimal to no reporting requirements. Sole proprietorships do not need to file an annual report with the state or federal government. However, under a sole proprietorship, a dentist will be held personally liable for all general debts and liabilities of the practice. Similarly, in a partnership, each partner is jointly and severally liable for the debts and obligations of the business. In comparison to sole proprietorships and partnerships, the significant advantage of a corporation or LLC is that the owners of the business (the shareholders/and or members) enjoy the benefits of limited liability.

The real estate should be owned in an entity other than the practice entity for both taxation and timing of practice sale purposes. The practice should have a written lease with the real estate entity to which rents and occupancy costs are paid. Owning the real estate in an LLC is the preferred entity, so that “basis” includes any debt or unpaid mortgage when the real estate is sold.

Talk to a CPA For Doctors in Maryland today to know if your business is set up correctly.

2. Not setting up their business entity early enough.

They say most businesses won’t survive their first 5 years. But I once read that businesses that incorporate are 40% more likely to be in business past 5 years.

If your business is a sole proprietorship or general partnership, you and your business are one and the same. That means that your personal assets are at risk if your business is sued or can’t pay its debts.

If you form a business entity such as a corporation, LLC, or limited liability partnership (LLP), your business becomes legally separate from you. If there’s a judgment against your business, you may lose the money you have invested in it, but you won’t lose your house, car, or personal bank account. Not forming a business entity can be a big mistake if you have partners or have a solo business with significant financial obligations or legal exposure.

  • Why incorporate? And when?
  • Current school of thought is to set up a business entity as soon as you start working.
  • Can begin funding a retirement plan.
  • Can deduct certain costs against the income generated from dentistry services

Allow Sigma, Columbia Maryland CPA firm, to help your business entity be set up appropriately. We help you from setting up to running your business profitably.

1. Not setting up your “team” soon enough.

As a dental practice owner, navigating legalities, insurance plans, funding, and more are all important aspects when setting up a smooth running dental practice. It helps to have an advisor team at the ready to assist you with the headaches that come with dealing with paperwork and the behind-the-scenes details that come with owning a dental practice. Keep in mind that it is worth it up front to invest in a team with dental industry knowledge.

An experienced CPA, lawyer, banker, insurance agent, dental broker, dental tech and IT advisor, will help you navigate the complexities of practice ownership.

  • Attorney to review office lease, contracts, employment agreements, entity formation, etc.
  • CPA and financial advisor to advise on setting up business entities, retirement plans, arrange financing and to review contracts from a tax perspective.

An expert for your dental practice…

No matter how great your patients’ oral health, if your accounting practices are full of mistakes and errors, it could affect your practice’s financial health.

If you’re looking for a CPA service in Maryland that can help clean or manage your account, get in touch with us today.

Sigma Accountants is a virtual-based accounting and tax service that caters to small and medium-sized businesses just like yours

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