Larry the Accountodontist
May 8, 2012 | 
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Larry Goldberg
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Homestead Property Tax Credit
May 8, 2012 | Subscribe to our RSS Feed
This week’s blog has nothing to do with your dental practice. And if you don’t live in Maryland stop reading right now and go do a crown prep or something else fun to do.
For all you Maryland residents who also happen to own your home you should check to make sure you applied for the Homestead Property Tax Credit. You have until the end of 2012 to apply or you will lose this valuable property tax break.
The deadline was set back in 2007 so you might not remember if you applied. According to the State Department of Assessments and Taxation (SDAT) about 150,000 homeowners have not sent in their applications. The homestead program only applies to your primary residence.
The Homestead Credit is a credit calculated on any assessment increase exceeding 10% (or the lower cap enacted by the county where the principal residence is located) in one year. So, homeowners pay property tax on the value of their property as declared in their previous tax assessment plus any increase up to 10% but nothing more.
You can check the status of an application by visiting the SDAT website, and type in your address on the Real Property Data Search page. If the state received and processed a homestead application, that will be noted at the bottom of the property’s page.
Check out the website it will only take a few minutes to make sure you are not missing out on this valuable tax break.
2012 Reports Show Dental Spending Increase
April 25, 2012 | Subscribe to our RSS Feed
Are Happy Days Here Again?
It has been on the front page of the ADA News of January 16, 2012 and reported on MSNBC: Dental spending is on the upswing. Reporting on data from 2010 showed that dental spending increased by 2.3%. Now that is not a huge increase by any definition, but following the dismal 2008 and 2009 years when most dental practices saw a significant drop in their collections, any increase in dental spending is to be taken as a positive.
In 2011 I noticed an uptick in collections in the majority of my dental practice clients and wrote about it in a 2011 blog post. As I mentioned not every dental practice saw positive growth due to economic circumstances not being as favorable in their geographic region.
It seems like patients may be getting more comfortable paying for dental treatment at the present time. It is too early to see how dental spending did across the country in 2011 compared to 2010. One can only hope that the increase in spending continues to increase now and in the future.
Tell us what your experience has been. Has your dental practice seen an increase in collections relative to the past two or three years? What changes, if any, have you made in your dental practice to weather the stormy weather of the past few years?
Hiring Your Child to Work in Your Practice
March 27, 2012 | Subscribe to our RSS Feed
A Wise Investment…
It is the day after Johnny or Sally’s sixth birthday and they are bored and moping around the house saying there is nothing to do. Sit them down, look them in the eye and tell them, “My child it is time to go to work in my dental office.” If they don’t look right back at you and say, “Mom (or Dad) you are crazy”, then something is wrong. But let’s look at why it is not a crazy idea at all and can benefit both parent and child.
You can have your child do some menial tasks around the office for a couple of hours a week. Maybe they can straighten the waiting area or help with filing. Pay them a salary just below the wage level that requires them to file a tax return and look what happens: You have gotten a tax deduction at your tax bracket and your child has gotten income that is taxed at 0%.
Better yet take their earnings and invest it in a Roth IRA. Five thousand dollars invested for ten consecutive years, from six years old to 15 years old with no additional investments made, with an 8% annual return would yield a whopping, drum roll please, $2,500,000 when your child turned 60 years old. You read that right, that $50,000 investment turned into, two million five hundred thousand dollars. That is quite a tidy sum. Ah, the power of compounding.
This is truly a win-win situation for everyone involved. What are you waiting for? The time has come to put your children to work in your dental office. As always, discuss this with your accountant to see if this is the right strategy for you.
Questions for Larry the Accountodontist?
larry.goldberg@glassjacobson.com
Penalties for 1099 Non-Compliance
March 13, 2012 | Subscribe to our RSS Feed
- Did the corporation make any payment in 2011 that would require it to file Form(s) 1099?
- If “yes”, did the corporation file or will it file all required Forms 1099?
On the surface these are two pretty innocuous questions. For the first time they are appearing on Form 1120, Form 1120S, Form 1065 and Schedule C.
I know I have been beating this 1099 issue to death recently, but now you are going to sign your tax return and state that the answer to the above questions is either Yes or No. As I mentioned in a previous blog there can be a $30 penalty per 1099 filed late.
However, Sam Cohen of the Glass Jacobson tax department pointed out that the penalties can be even more onerous. This paragraph is lifted right from the IRS’s instructions on preparing 1099’s:
Intentional disregard of filing requirements. If any failure to file a correct information return is due to intentional disregard of the filing or correct information requirements, the penalty is at least $250 per information return with no maximum penalty.(Italics added by me)
Now that $250 penalty to who knows what per return is pretty steep and there are exceptions to having to pay the penalty, but an error or omission of a taxpayer identification number or name is not one of them.
These payments do not just include temporary dental help, they can include the guy who mows the lawn at the office, the cleaning person, or dental consultant.
What can you do?
- Have a pre-printed form that contract labor/ temporary help can fill out.
- Even if you don’t think you will be paying that person $600 or more have them fill out the form the first day they work in the office before they begin working.
- Don’t agree to not prepare a 1099 for someone so that they will work for you. You bear all the risk for not filing that 1099. Find someone else to do the work.
The IRS is getting serious about having people report all their income and it is up to your dental practice to comply with the reporting rules or face the possible penalties.
Questions for Larry?
larry.goldberg@glassjacobson.com