CPA Services for Dental & Medical Practices

The split between salary and distribution is the single most examined number in an owner-provider's return. Too low invites the adjustment; too high pays payroll tax that did not have to be paid. It also sets the ceiling on what can go into a retirement plan, which is why it is a planning decision rather than a payroll setting.

Who sets the schedule, who supplies the operatory and the equipment, and who owns the patient relationship are the facts that decide classification — not what the agreement calls the arrangement. Getting it wrong is back payroll tax with penalties. The employment and licensing side of the same question belongs with your attorney, and we will point you there rather than opine on it.

For a profitable practice, a 401(k) with profit sharing — and for an older owner, a defined benefit or cash balance plan alongside it — moves more tax than most other planning combined. The constraint is that the plan has to cover staff on the terms the rules require, so the design question is what the practice can sustain, not simply what the owner would like to contribute.

Equipment placed in service can generally be written off far faster than it is paid for — the deduction follows the year the asset is put into use, not the term of the loan behind it. Section 179 and bonus depreciation are the two routes, they interact differently depending on the year, and taking the largest write-off available is not automatically the best answer when next year's income will be higher.

A buildout capitalized as one number depreciates over decades. Interior improvements to non-residential space can qualify for a considerably shorter life than the building, and a cost segregation study can separate what genuinely belongs in shorter-lived categories. There is a project size below which the study costs more than it returns — the useful advice is which side of that line you are on, which we would rather work out before you commission one.

Whether a transaction is structured as assets or as equity decides what the buyer can depreciate and amortize and what the seller pays tax on — and the two sides have to report a consistent allocation between them. Goodwill amortizes over fifteen years; equipment does not. The allocation is negotiated once and lived with for a long time, so it is worth involving us while it is still open.

Production, adjustments, write-offs under insurance contracts and collections are four different numbers, and only the last one pays anybody. A practice management report that shows a strong month is not evidence of a strong month until it is reconciled against what the bank actually received.

Insurance and merchant deposits land after fees are taken out. Booked as they arrive, revenue is understated and the fees are never deducted at all. Recording the gross and the fee separately is a small bookkeeping habit that changes what the profit and loss is worth.

We do not give legal advice, we do not process payroll and we do not handle HIPAA or clinical compliance. We work alongside the people who do. Saying that plainly is more useful than a longer list of services we would be learning at your expense.