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Dental Consultant | Now is the Time for Tax Planning for Your Practice

By: admin

March 15, 2018

By Doug Fettig, CPA, MBA

In case you hadn’t noticed, the annual “tax season” is upon us, with everyone working towards the tax deadline of April 15th!  However, you may not fully appreciate how engaging in tax planning with your CPA or financial advisor throughout the course of the year can pay huge dividends, both in stress and in your final tax bill.  So, when the dust settles from this year’s tax season, resist the temptation to go back to “business as usual.”

The earlier in the year you begin your tax planning process, the more your CPA can leverage the change in tax laws to ensure that your dental practice is maximizing the tax benefits and minimizing the tax impacts.  A forward-thinking CPA will engage in tax planning with their clients several times during the year, creating the best possible tax situation and also ensuring that you are not hit with a “tax surprise” after year-end.  After all, nobody likes to get a call from their CPA informing them that their tax bill will be bigger than was originally estimated!

Here are three really good reasons to make time for your tax professional now and to get your dental practice and your personal financials in the best shape possible.

One: It’s Time to Get Your Financial House in Order

Before your tax professionals can prepare your annual tax filings, your books will be evaluated to ensure that all transactions have been posted correctly. By starting the process during the year, your tax professionals can help you tidy up your records for the majority of the year and institute process changes to address any systematic errors.

This quick turnaround provides multiple benefits including:

  • You’re in a position to satisfy bank covenants by supplying accurate financial statements during the first month of the New Year.
  • You’ll have a clear sense of where you stand financially when making important decisions during the year regarding investments in your dental practice, employee compensation, wealth management, and tax planning.
  • You’ll get ahead of the curve when you aren’t bumping up against a filing deadline.

In other words:  Since you’ll need to do it anyway, why not get a head start?

Two: It’s Time to Leverage Your Financial Data for Business Planning

During the year, not at year-end, is the appropriate time for a real-time look at your finances. A clean, up-to-date set of financial statements and the associated management reports transforms your “gut feel” for the health of the dental practice into concrete metrics to evaluate revenue streams, operational efficiency, and financial controls.

These reports generated from your dental practice can help you answer key questions about the business, such as:

  • Is your dental practice attracting the right clientele to reach the target reimbursement rates for services rendered?
  • Is the mix of services at your dental practice attaining target profitability?
  • Is the dental practice managing receivables to minimize late payments and delinquencies?

A dental practice with soft performance can leverage this data and associated expert advice to institute strategies, process changes, scripting changes, and/or employee development initiatives to render improvements during the year. Even the strongest dental practice can find room for improvement.

A mid-review by your tax professionals can provide information to help you make investment decisions with respect to the dental practice – e.g., leasehold improvements or capital equipment procurement.  It may trigger a review and update on insurance coverage for your practice as well.

Three: Meet with Your Tax Professional to Develop Your Tax Plan

A mid-year conference with your tax professional places you in the driver’s seat for the work you’ll do together in the remainder of the year. You can take the opportunity to outline your anticipated financial reporting requirements – e.g., tax returns for bank loans, student loans. You can schedule your collective resources when it makes the most sense for your dental practice. And you can outline your mutual obligations to ensure thorough and professional accounting services and tax filings with the least amount of effort on both sides of the table. It’s good for your dental practice and good for the bottom line.


Without a doubt, the insights that you glean by engaging in tax planning during the year can inform actions that will benefit you and your dental practice in the coming year and beyond.   What better gift could you give yourself?

If you would like more information or would a free consultation regarding your tax or retirement plan status, please contact Doug Fettig at dfettig@aldrichadvisors.com or at 503-716-9316.


Doug Fettig, CPA, MBA, is a consultant and dental speaker within the Dental Services Group at Aldrich CPAs + Advisors, ranked as one of the top 100 accounting firms nationwide. With over 25 years of business and consulting experience, Doug has the unique ability to understand dentists’ needs and help them grow efficient and profitable practices. His insight allows him to effectively communicate business concepts to dental practices while strategically addressing tax, investment, and retirement planning needs.