by The MDTAXES Network | Sep 1, 2018 | September 2018 Newsletter
ANNUAL DENTAL PRACTICE MANAGEMENT SUMMIT OFFERED BY MDTAXES AND SCHWARTZ & SCHWARTZ PC TO BE HELD NOVEMBER 2ND
Join us for lively?topics that?focus on helping you improve?your financial well-being.?
Sessions include:
- The Ins & Outs of Basic Financial Planning
- What You Need to Know About the Recent Tax Law Changes
- How to Increase Your Practice’s Top Line
- Retirement Planning for Dentists and Practice Owners
Included in our day will be a delicious lunch and networking opportunity with fellow dentists and practice owners.
Friday, November 2nd, 2018
at Cafe Escadrille,?26 Cambridge Street, Burlington, MA
Register today for our?FREE?dental client event
~ CE available ~ Lunch included
by The MDTAXES Network | Sep 1, 2018 | September 2018 Newsletter
From IRS News: IR-2018-66, March 21, 2018
WASHINGTON – The Internal Revenue Service today concluded its annual “Dirty Dozen” list of tax scams with a warning to taxpayers to remain vigilant about these aggressive and evolving schemes throughout the year.
This year’s “Dirty Dozen” list highlights a wide variety of schemes that taxpayers may encounter throughout the year, many of which peak during tax-filing season. The schemes can run the gamut from simple refund inflation scams to technical tax shelter deals. A common theme throughout these: Scams put taxpayers at risk.
Taxpayers need to guard against ploys to steal their personal information. And they should be wary of shady promoters trying to scam them out of money or talk them into engaging in questionable tax schemes.
Here is a recap of this year’s “Dirty Dozen” scams:
Phishing:?Taxpayers should be alert to potential fake emails or websites looking to steal personal information. The IRS will never initiate contact with taxpayers via email about a bill or tax refund. Don’t click on one claiming to be from the IRS. Be wary of emails and websites that may be nothing more than scams to steal personal information. (IR-2018-39)
Phone Scams:?Phone calls from criminals impersonating IRS agents remain an ongoing threat to taxpayers. The IRS has seen a surge of these phone scams in recent years as con artists threaten taxpayers with police arrest, deportation and license revocation, among other things. (IR-2018-40)
Identity Theft:?Taxpayers should be alert to tactics aimed at stealing their identities, not just during the tax filing season, but all year long. The IRS, working in the Security Summit partnership with the states and the tax industry, has made major improvements in detecting tax return related identity theft during the last two years. But the agency reminds taxpayers that they can help in preventing this crime. The IRS continues to aggressively pursue criminals that file fraudulent tax returns using someone else’s Social Security number. (IR-2018-42)
Return Preparer Fraud:?Be on the lookout for unscrupulous return preparers. The vast majority of tax professionals provide honest, high-quality service. There are some dishonest preparers who operate each filing season to scam clients, perpetuating refund fraud, identity theft and other scams that hurt taxpayers. (IR-2018-45)
Fake Charities:?Groups masquerading as charitable organizations solicit donations from unsuspecting contributors. Be wary of charities with names similar to familiar or nationally-known organizations. Contributors should take a few extra minutes to ensure their hard-earned money goes to legitimate charities. IRS.gov has the tools taxpayers need to check out the status of charitable organizations. (IR-2018-47)
Inflated Refund Claims:?Taxpayers should take note of anyone promising inflated tax refunds. Those preparers who ask clients to sign a blank return, promise a big refund before looking at taxpayer records or charge fees based on a percentage of the refund are probably up to no good. To find victims, fraudsters may use flyers, phony storefronts or word of mouth via community groups where trust is high. (IR-2018-48)
Excessive Claims for Business Credits:?Avoid improperly claiming the fuel tax credit, a tax benefit generally not available to most taxpayers. The credit is usually limited to off-highway business use, including use in farming. Taxpayers should also avoid misuse of the research credit. Improper claims often involve failures to participate in or substantiate qualified research activities or satisfy the requirements related to qualified research expenses. (IR-2018-49)
Falsely Padding Deductions on Returns:?Taxpayers should avoid the temptation to falsely inflate deductions or expenses on their tax returns to pay less than what they owe or potentially receive larger refunds. Think twice before overstating deductions, such as charitable contributions and business expenses, or improperly claiming credits, such as the Earned Income Tax Credit or Child Tax Credit. (IR-2018-54)
Falsifying Income to Claim Credits:?Con artists may convince unsuspecting taxpayers to invent income to erroneously qualify for tax credits, such as the Earned Income Tax Credit. Taxpayers should file the most accurate tax return possible because they are legally responsible for what is on their return. This scam can lead to taxpayers facing large bills to pay back taxes, interest and penalties. (IR-2018-55)
Frivolous Tax Arguments:?Frivolous tax arguments may be used to avoid paying tax. Promoters of frivolous schemes encourage taxpayers to make unreasonable and outlandish claims about the legality of paying taxes despite being repeatedly thrown out in court. The penalty for filing a frivolous tax return is $5,000. (IR-2018-58)
Abusive Tax Shelters:?Abusive tax structures are sometimes used to avoid paying taxes. The IRS is committed to stopping complex tax avoidance schemes and the people who create and sell them. The vast majority of taxpayers pay their fair share, and everyone should be on the lookout for people peddling tax shelters that sound too good to be true. When in doubt, taxpayers should seek an independent opinion regarding complex products they are offered. (IR-2018-62)
Offshore Tax Avoidance:?Successful enforcement actions against offshore cheating show it’s a bad bet to hide money and income offshore. People involved in offshore tax avoidance are best served by coming in voluntarily and getting caught up on their tax-filing responsibilities. (IR-2018-64)
by The MDTAXES Network | Sep 1, 2018 | September 2018 Newsletter
- For 2017, the standard deduction for a single individual is $6,350 and for a married couple is $12,700. A person will benefit by itemizing once allowable deductions exceed the applicable standard deduction. Itemized deductions include state and local income taxes (or sales taxes), real estate taxes, mortgage interest, charitable contributions, and unreimbursed employee business expenses. The Standard Deduction jumps to $12k for single individuals and $24k for married couples in 2018.
- For 2017, the personal exemption is $4,050. Individuals will claim a personal deduction for themselves, their spouse, and their dependents. Personal Exemptions are eliminated starting in 2018.
- The?maximum earnings subject to?social security taxes is $128,700 for 2018,?up from $127,200 in 2017.
- The?standard mileage rate?is $.545 per business mile?as of January 1, 2018, up from $.535 for 2017.
- The?maximum annual salary deferral?into a?401(k) plan?or a?403(b) plan?is $18,500 in 2018, up from $18,000 in 2015, 2016 and 2017.? And if you’ll be 50 or older by December 31st, you can contribute an extra $6,000 into your 401(k) or 403(b) account this year.
- The?maximum annual contribution?to your?IRA?is?$5,500 for 2015 through 2018.? And if you turn 50 by December 31st, you can contribute an extra $1,000 that year.? You have until April 15, 2019 to make your 2018 IRA contributions.
by The MDTAXES Network | Sep 1, 2018 | September 2018 Newsletter
Looking to purchase new equipment for your practice but not sure it makes financial sense to do so? Let’s review how to calculate “Breakeven”? for? equipment you purchase by working through an example with these assumptions:
Revenue:
- Each exam with this new equipment is reimbursed at $40 each
- Attainable capacity is 4 exams per hour
- Demand is 20 exams per week, or 1,000 exams per year
Fixed Costs:
- The equipment costs $55k
- Its useful life is 10 years
- A loan for $55k, at 5% interest and a 10-year term, is $7k per year
- Maintenance and other costs run at $3k per year
Variable Costs:
- The cost of a MA, RN or Tech to operate the equipment is $60 per hour
Breakeven
Assuming your practice can schedule patients to treat 4 patients per hour, then the revenue from exams using this equipment will be $160 per hour.? The only variable cost is labor of $60 per hour, so that leaves profit of $100 per hour, or $25 per exam.? With fixed costs running at $10k per year ($7k for the loan payments and $3k for maintenance and other costs), your practice will breakeven after the 400th exam of the year.? The remaining 600 exams all represent profit.
What happens if your practice only ends up treating 2 patients per hour?? Revenue dips to just $80 per hour while the variable cost for labor remains steady at $60 per hour.? That leaves a profit of just $20 per hour, or $10 per exam.? Breakeven jumps to 1,000 exams, which means there would be no profit from adding this equipment to your practice and treating just 2 patients per hour.
