If you are a dentist who has longed to own his or her own practice and are about to make the leap to ownership, be sure that you and your dental CPA have discussed the optimal tax structuring of the purchase. Any dental practice, big or small, will benefit from the efficiency that is a product of a well-conceived, well-designed organizational structure. This is defined as the way jobs are arranged and responsibility is formally delegated. This includes delineating departments or divisions, setting up a management hierarchy, and establishing rules, procedures, and goals. Along with an effective organizational structure, the tax structure you choose will have a significant impact on the way taxes are prepared and paid. More importantly, the tax treatment at the IRS level will determine the amount of financial flexibility you will have with your current or future partners.
If you are about to purchase a dental practice, a dental CPA from Reliance Consulting, LLC, can provide an in-depth organizational analysis and suggest a formal tax structure based on your needs. Your options typically include sole proprietorship, limited liability corporation, S corporation, C corporation, and partnership. A hybrid structure that combines LLC with S-Corporation has worked very well with many dental practices across the nation. There is no “one-size fits all” structure that is the magic bullet for every dental practice. A dental CPA from Reliance provides answers regarding every aspect of the ideal organizational and tax structure, including:
- Tax ramifications for the business and for you, the owner
- Purchase price allocations for asset acquisitions
- Legal and financial advantages and disadvantages of different organizational structures
- Practical considerations when bringing in new partners
- Partner/Associate Compensation Strategies
- How projected growth patterns of the company are a factor
- The best manager-to-subordinate ratio
- Levels of autonomy and responsibility to be granted to workers
- Channels of communication between departments
Once your optimal tax structure has been determined, your dental CPA can help make sure things continue to run smoothly by handling all of your practice’s accounting needs. While you take care of your patients, Reliance handles the financial end – tax planning, bookkeeping, payroll services, balance sheets, cash flow analysis, and more. Our goal is to help your practice thrive and sustain that level of success over the long term. Contact Reliance today to get started working with the premier dental practice management consultant in the Tampa Bay area.