Cliff's Notes

The Business of Dentistry

Please, Someone Show Me The Money?

Cliff’s Notes for September 21, 2015

Cliff Marsh, Henry Schein ……Cell: 201-321-7494……Fax: 201-262-2210

E-mail: cliff.marsh@henryschein.com

http://www.cliffsnotesblog.me

http://www.youtube.com/cliffmarsh100

“The avoidance of taxes is the only intellectual pursuit that still carries any reward”.

John Maynard Keynes

Was It a Good Year? Make it Better!

image001  The New Year is fast approaching and it’s time to get down to busi-ness. September 30th marks the end of Q3 (3rd financial quarter of 2015). Schedule your Q3 accounting review and get informed esti-mates of what your 2015 tax liabilities will be.

How much money will you make this year? How much money will you have to send the Federal and State agencies? These are the 2 basic questions you need to have answered by the end of next month. You need to decide where you will be making an investment. Maybe it’s cash into a retirement account or maybe an investment into your practice, but you will be writing a check. Who’s name is on the check is the question. What best works for your overall game plan.

Last February one of my clients was complaining about having to pay the IRS $15k. Now in a way that’s a good problem because it means you made some mon-ey, but in this case the doc was considering replacing the old cabinetry in one of the op’s. That $15k, or part of it, would have gone a long way in upgrading the prac-tice. That’s why you need to have a 3rd quarter financial review with your advisor (s) before the end of October. You need to plan your investments and decide the exact time to execute. If your plans are to upgrade hard assets such as computers or equipment do not wait until the NY Dental Meeting, delivery prior to the years end may be difficult and the deals aren’t any better. If you are investing in a retirement plan your advisor should direct you on the timing.

IRS Sec. 179 is also a major factor in your decision. At present the ceiling is $25k and it will take Congressional action to change it. Last year the limit was extended to $500k in the last few minutes of the year. As an example, if you purchased an Identify Cancer Detection System for $2699.00, the IRS Income Tax Credit is around $900.00. System net cost $1799.00. Also, the tax liability of you practice is reduced by $2700.00 and that value could be as high as $1200.00 of reduced tax payments. Looks to me like that investment has a final net cost of around $599.00. Now, what is the ROI on that $599.00? It can pay for its self in the first week.

No matter where you are in your career the reinvestment of liquid assets into your practice is necessary. If you don’t keep moving forward you will decline, nothing stays the same. For those of you thinking about slowing down a little, think about what your successor will be thinking and need. That adds great value to your exit plan and if you don’t have one of those, we need to talk.

Consult your financial advisor and make sure you fully understand what they are saying and please feel free to contact me at any time with any questions or concerns.

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September 21, 2015 - Posted by | Uncategorized

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