Monday, June 6, 2016

DID YOU KNOW?

In 2014, average practice overhead excluding owners’ salaries was:  
  • $385,000 for general practice
  • $463,050 for specialty practices
  • $400,010 average for both groups combined

At the beginning of World War II in 1941, the minimal requirement for being declared dentally fit for military service was 12 functional teeth.  By late 1943, this requirement was dropped because too few prospective military members met it.  Dentistry has served our population well during the interim so that a majority of the U.S. population now keeps functioning teeth for a lifetime.

The average age of retirement for dentists has risen from 64.8 years in 2001 to 68.7 years in 2013.  The number of practicing dentists in the U.S. is projected to reach 201,834 by 2018, up from 195,202 in 2013.

Average staff salary percentages compared to practice collections in 2015:            
  • General Dentistry – 25%
  • Pediatric Dentistry – 25% - 28%
  • Periodontics – 22%       
  • Orthodontics – 20 –22%  
  • Oral Surgery – 18%                                                                                                                         
  • Endodontics – 16%

Most incorporated private practices have converted from “C” corporations to “S” corporations due to tax advantages.  The less than 10% of remaining C corps are group practices.  The C corps status may mean double taxation on annual profits distributed to owners as income while being taxed to the corporation as profit.  Taxes on the sale of C corps are more complex, and C corps cannot distribute practice profits as dividend distributions, free of payroll taxes, like an S corps can do.  Further, recent tax law changes have reduced the waiting period for selling a recently-converted corporation (from C corp to S corp) from 10 years to 5 years.  If yours is still a “C” corporation, talk to your accountant and attorney about the wisdom of converting to a Subchapter S corporation.

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