5
Income Tax Planning Tips for Dentists
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Depreciation
on purchase of equipment
The most important step a Dentist can take today is to purchase
equipment. With the latest legislation coming into effect
from February 2009, depreciation may be the single largest
source of tax savings. Instead of depreciating the cost of
equipment over several years, it is now possible for Dentists
to claim depreciation in the first year. In addition to Section
179 deduction, small business owners can claim an additional
fifty percent Bonus Depreciation. When we consider that Dentists
usually fall under the maximum tax bracket, this amount could
be substantial. Purchase of furniture for office use is also
allowed for claiming depreciation benefits. |
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Employing
spouse
Employing your spouse in your Dental business and showing
their earnings as a expense is a great way to save tax. There
have been instances where IRS has disallowed such expenses
to be shown for tax purposes because many Dentists that are
business owners do not keep records of the attendance and
the actual work done by the spouse. Good record keeping is
essential for claiming tax deductions. Another factor which
must be kept in mind is that salaries should actually be paid
and shown as salary expense. One cannot claim tax deduction
by simply showing paper expenses. By keeping good records
and making actual payments as salaries, bonuses and other
expenses can lead to better tax management. |
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Vehicle
depreciation
To claim tax deduction for depreciation of a vehicle, it must
be used for business purposes. The laws regarding vehicle
depreciation have become complex and understanding them could
be difficult. A qualified CPA would be able to advice you
on this matter more effectively. |
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Green
savings
In order to promote green technology and energy savings, the
government has allowed certain tax deductions for green buildings.
In many cases this can be a huge saving. Dentists and business
owners can claim tax deductions by installing green technology. |
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Commercial
building depreciation
Since the depreciation for a commercial building is spread
over a lengthy period of time, it may seem like a small amount.
However, taken over the lifetime of the building this can
add to a sizeable amount and should not be overlooked.
The five tax saving tips for Dentists are practical and one
need not spend much effort in enjoying the benefits. Often
tax laws can be confusing to taxpayers so it is important
to seek the professional help of a CPA. The payment to a CPA
can be quickly recovered through tax savings. Another benefit
of using a CPA is obviously to counter the claims made by
the IRS, which can be quite confusing and unpleasant. |
Individual
Tax Return Service
Individual
Tax Return Service
