Acquisition
When acquiring a dental practice, key financial management and accounting considerations must be understood. Breaking out structural versus variable expenses for the practice will allow us to pinpoint key areas to improve financial performance of the practice post acquisition, and determine if production growth, expense reduction, or keeping the status-quo will help you achieve your practice goals.
At TaxFD, we specialize in helping dentists acquiring a practice understand all of the financial metrics of the practice, tax reporting and filing considerations, entity formation decisions, and tax savings opportunities.
Acquisition Services
Tax Planning & Preparation.
Accounting.
Payroll.
Entity Formation.
Tax Planning & Preparation.
As you are acquiring a practice, you have significant opportunity to maximize your tax effectiveness in your first year of operation. This year will be a huge change in income and, while you are buying an established income stream, your income will likely be less than in future years. We need to consider Roth Conversions, timing of depreciation recognition, capital gain harvesting, business loss carryforwards, and student loan optimization. This planning needs to begin well before the actual acquisition date to maximize first year tax benefits.
Accounting.
Even as a start-up you still have significant business compliance requirements – in fact, it is the same (if not greater) than in established practices. You need to create accurate financial records through ongoing bookkeeping and generate dental-specific financial statements. Many times, this is a requirement from your lender.
Payroll.
Payroll is one of the most important functions when acquiring a practice. Nothing kills employee morale like missing the first payday! You will need to process payroll for your employees and account for all required tax withholdings. As you are establishing payroll procedures, it is important to have professional oversight over all of the payroll functions to ensure proper setup and compliance, continuation of any benefit programs, and accurate payroll tax filings.
Entity Formation.
As you are acquiring a dental practice, you have key considerations behind entity formation decisions. In many states, dentists are required to work as professional corporations or professional LLCs, which strip away many liability protections for clinical negligence or malpractice. The decision to incorporate will impact your accessibility for many tax planning strategies such as family member staffing, student loan optimization, and deduction qualification for owners.
