NO DENTAL EXEMPTION FROM MEDICAL DEVICE TAX

In December 2012 the IRS issued final regulations for the new 2.3% medical device tax instigated to help pay for Obamacare.  Prior to the final decision, the ADA and numerous other dental organizations spent much of 2012 requesting some dental exemptions to the tax so that lab items, dental supplies, and dental equipment would not be included in the medical device category.  The IRS answer to these requests was “NO”. 

All dental paraphernalia listed under FDA regulations 21 CFR Part 872 will be taxed; and that includes virtually all dental instruments, supplies, and equipment.  Only toothbrushes, floss, toothpaste and other such consumer items also for sale in retail outlets will be exempt.  Finished lab items made by domestic labs will not be taxed, per se; however, raw materials used to produce dental devices will be taxed.  Therefore, expect the cost of the tax to be passed on to your practice from your dental lab.

To calculate approximately how much this tax will increase your overhead in 2013 and henceforth, multiply total annual costs for dental supplies and lab by 2.3%.  Suggestion:  include this factor when planning your annual fee increases.

WHAT KIND OF EXAMPLE ARE YOU?

Think for a moment about how those around you hear your words.  How does your speech come across to your family?, your friends?, your dental team?, your patients?  We all know that once words are spoken, either positive or negative ones, they cannot be put back into one’s mouth, retracted and unheard.  You have the power to comfort, to uplift, to calm, and to inspire others by what you say and how you say it.  You also have the power to belittle, to disturb, to anger, or to hurt others by what you say and how you say it. 

An anonymous poet penned the thoughts:  “A careless word may kindle strife; a cruel word may wreck a life.  A gracious word may soothe the way; a joyous word may light the day.  A timely word may lessen stress; a loving word may heal and bless.”  And  Proverbs 25:11 says, “A word fitly spoken is like apples of gold in pictures of silver”.  What kind of example do you set with your spoken words?    

“TRUST FUNDTAXES”---A MUST KNOW

What in the world are TFTs?  For this discussion, “Trust Fund Taxes” are those taxes an employer withholds from an employee’s paycheck; specifically,  income tax and Social Security tax including Medicare withholding.  These withheld taxes are kept in “trust” by the employer to be remitted at a later date to the IRS and your-state Department of Revenue.

Failure to send these withheld funds to the proper government entity in a timely way can result in a “Trust Fund Recovery Penalty” (TFRP) levied against the employer and any employees responsible for remittance.  IRS guidelines state that any responsible person who “willfully fails to collect…or evade any such tax…” may be held liable for the TFRP.  “Willfully” does not mean intentionally avoiding collection from employees or payment to the government; rather it refers to a person who knew or should have known payroll taxes were not collected, or if collected, not paid.  In dental practice, this person most often is the dentist, the ultimate authority who should have known.

Suggestion:  clarify with your CPA or practice bookkeeper that these withheld taxes are properly collected and paid on time as required by the IRS and your-state Department of Revenue.

GKAS and NCDHM---KNOW THE DIFFERENCE??

Give Kids a Smile (GKAS) is celebrated the first Friday in February each year as part of National Children’s Dental Health Month (NCDHM).  NCDHM, focusing on oral health education for all children regardless of economic status, occurs during the entire month of February.  The one-day effort, GKAS, is designated to provide preventive and restorative care as well as oral health education to low-income children who do not have access to dental care.  Dentists, dental school students, and staff members across the country work in their areas to provide this care.  Consider participating in GKAS Day in your community next year.  Check the ADA website for more information.