A LITTLE KNOWN MANDATE IN THE NEW HEALTH CARE LAW

 As the new health care act now stands, beginning in 2013 a dentist/owner with fewer than 50 employees does not have to provide staff health insurance.  Any employer with over 50 employees must provide health insurance for employees or face fines from the federal government.  This has been clearly understood by most people.  However, many are  unaware that the dentist will no longer get an income tax deduction for his/her own individual or family health care premiums unless health coverage is provided for staff also.  The average savings in income taxes for an individual dentist has been $7000/year.  One can see that many practitioners will experience a change, either pay more in income tax (no deduction for family health care premiums) or provide comparable health insurance for staff .  Check with your CPA to understand details of this little-known mandate.

EMPLOY YOUR CHILD

Many experts recommend employing your child as young as age 6 in your practice.  Even at 6 years old, a child can pull weeds, sweep entryways and hallways, separate small clinical supplies, etc.  In 2012 a child can earn up to $5,950, and this amount is due to increase to $6,100 in 2013.  The child will pay no federal income tax on earnings.   Talk with your practice management consultant or CPA about the ramifications and benefits of putting your child(ren) on the payroll.

ASK YOUR CPA ABOUT…..

           -claiming a tax credit for up to 35% of premiums paid for staff health insurance.  Also make certain that tax credit was claimed for 2010 and 2011 or that amended returns are filed if those credits were missed.

            -turning your practice into a Subchapter S corporation in order to reduce payroll taxes by having part of the dentist’s compensation taken as dividends rather than salary.

            -writing off up to $139,000 spent to purchase new or used equipment in 2012, provided Congress does not change this expensing amount before the end of 2012.  If current regulations remain, the expensing amount will decrease to $25,000 in 2013.