Misinformation is rife in the dental industry, and not just among patients who have read something they believe to be true online (but usually isn’t!), but with taxes too. However, while patient misinformation may be easy for dentists to deal with, tax misinformation can have far costlier consequences.
In recent months, the IRS have been warning industry professionals about the perils of misleading tax strategies and tips; which are often more than mere misunderstandings, and can lead to claims being rejected, audits and even financial penalties.
Specialist tax planning for oral surgeons can of course help dentists avoid dodgy tax shortcuts, but it’s always a good idea to make yourself aware of dental hacks that seem too good to be true.
Here are some recent tax scams impacting the dental industry:
- Fuel tax credit
Although this credit is real, the majority of dentists simply don’t qualify for it.
- Leave credits (pandemic-era)
Any leave credits associated with the pandemic, are no longer valid or available to taxpayers.
- Employee Retention Credit (ERC)
Now expired, this credit was designed for those businesses affected by disruptions related to the pandemic.
- R & D Credits (Research & Development)
Most dentists and their practices simply don’t qualify for this credit.
- Charitable deductions
To be able to claim this deduction, dentists must make donations to organizations that are IRS-qualified. If you’re not sure whether an NGO you would like to support, qualifies, you can ask a specialist dental tax advisor.
Tax scam consequences for dentists
From being convinced by online tax scams that sound wholly believable, to listening to poor advice from colleagues or an unscrupulous tax advisor, falling for a tax scam as a dentist could significantly delay your refund, and may even cost you dearly in stiff penalties.
Why all dentists should seek professional tax help
Tax laws are complicated whatever profession you’re in, but for dentists, there are a number of unique challenges to face when balancing their practice finances, with those of their personal life. The average taxpayer never has to deal with managing associate pay, or equipment depreciation, intensifying the need for professional guidance. Specialist advice such as what tax reduction for dentists you might be able to claim, is also offered by a dental accountant, along with the following:
- Tailored advice – this tax guidance takes the structure of your practice into account, your goals for the future, and the financial picture of your family
- Penalty protection – the cost of these can easily outweigh anything you might gain in the short-term from a dodgy deduction
- Peace of mind and accountability – with a return that is accurate and signed off by a tax specialist, you can enjoy the peace of mind that only a sound return can bring.
There is no quick fix for your finances as a dentist, only hard work and guidance from a qualified and experienced dental tax specialist. With tax scams continuing to be a problem, if you’re unsure about something you’ve read online or have a doubt about a tax strategy that worked for your friend (but may well not work for you), always seek a professional opinion. Anything else, simply isn’t worth the risk.