In this article, we’ll explain why outsourcing your accounting & bookkeeping is a smart option for many dental practices. We’ll also discuss how outsourcing can help improve efficiency and make it easier to meet deadlines when it comes time to handle taxes.

Reasons For Outsourcing Your Dentistry Accounting & Bookkeeping

You Can Focus On Your Core Business

By outsourcing your dental bookkeeping, you will be able to focus on what is essential for the success of your practice: treating patients and growing your practice. You are likely already stretched by the demands of running a dental practice, so it may be beneficial to consider having an expert handle the tasks.

As a dentist, the last thing you want is the added task of managing the books and finances of your office. Hiring an experienced third-party bookkeeper or accountant can help ensure that all financial records are kept up-to-date and accurate so that you have peace of mind when it is time for taxes or an audit by state regulators.

Outsourcing accounting services also means less stress for you as an owner because you won’t have to worry about missing deadlines or letting clients down due to a lack of attention from yourself or other employees to meet those deadlines.

You Will Save Money

Outsourcing your accounting can save you money in more ways than one. By outsourcing your bookkeeping, you’ll be able to spend that time working on what matters most: the practice itself. You’ll also have access to industry experts, giving you a higher level of expertise than you’d otherwise be able to provide.

 It keeps your finances safe from mistakes and errors. It might be simple to make mistakes while handling your finances, especially if you’ve never done it before. However, if someone else is in charge of things, they’ll notice any problems before they worsen.

You Could Benefit From A More Efficient Tax Structure.

If you’re a dentist or the owner of a dental practice, you may be busy with everything else that has to get done. You may find it challenging to keep up with accounting as it may not be on your mind. But accounting plays a crucial role in running your practice. You must keep track of income expenditure and ensure you follow the laws and regulations. Outsourcing accounting to overcome these challenges and increase your tax efficiency through responsible accounting and intelligent planning is advisable. Dental accounting needs specialized experts with experience who know daily bookkeeping tasks, insurance, etc.

Taking care of these tasks could save money in taxes and make your overall business run more smoothly.

Conclusion

Outsourcing your bookkeeping to a third party will save you time and money, allowing you to focus on growing your practice. By allowing an outside expert to handle your dental bookkeeping, you can rest assured that your data is taken care of in the most professional and compliant manner. Plus, you’ll have more time to do what you love, focusing on your patients.

The IRS expects overseas U.S. citizens to file tax returns every year, even if they don’t earn any money from the United States! That’s right, just being a citizen of the US means that you’re still subject to filing taxes on your worldwide income. Not only is it important for Americans living abroad to understand their obligations before an audit comes knocking on their door, but also because failing to file can result in harsh penalties and/or fines imposed by the IRS, and in some cases even jail time.

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1. What are the filing requirements for US Citizens living abroad

US Citizens living abroad are required to file a tax return, Report of Foreign Bank and Financial Account (FBAR), and Form 8938 if their foreign financial assets meet or exceed the filing requirement threshold. The amount varies per person depending on marital status, age, cost-of-living allowances, etc. Sometimes it’s necessary to consult with a professional when it comes to these issues, and if you live in Canada, googling “US Canadian tax accountants” will show you all available experts in the area, which might be the smartest choice if you are not familiar with tax laws. Essentially, it boils down to a filing requirement if your foreign financial assets combined with those of your spouse total a value higher than their respective reporting thresholds, which are as follows:

• Single individuals under 65 must file if their foreign financial assets are at least $200,000 USD. Married individuals do not have to file a tax return if their combined foreign financial assets are below $300,000 USD.

• Individuals over the age of 65 whose spouse is deceased or who is living apart from their spouse must file if their foreign financial assets are at least $400,000 USD. Married individuals do not have to file a tax return if their combined foreign financial assets are below $600,000 USD.

• Married couples filing together need to file only if the value of their combined foreign financial assets is at least 575,000 USD (half this amount if only one spouse is over the age of 65).

2. What are the penalties for not filing US tax returns as an American residing abroad?

The risk of being audited by the IRS is very high, especially for ex-pats who haven’t filed previous returns or didn’t meet their filing requirements. Failing to file your previous year’s returns also makes you subject to the failure-to-file penalty, which is usually 5% of your unpaid tax bill per month (max. 25%). The risk of being audited is even higher if you haven’t met your filing requirements in the past, in which case the penalty for failing to file FBAR and 8938 can be up to $10,000 USD per unreported account and year (yes, you heard that right: it’s a combined penalty!)! If the IRS decides to prosecute for tax evasion, your foreign assets could also become exposed, not just those in your name but also those of your spouse and any joint account you hold. These penalties add up very quickly and can be a serious threat to ex-pats who decide to ignore their filing requirements.

3. How do I prepare for an audit from the IRS?

Make sure you keep your records organized and accessible beforehand. This means having past returns, documentation of overseas income earned (such as pay stubs), etc., at hand in case you are asked. If you are found to be hiding foreign assets or accounts, not only will it cost you more money in penalties, but the possibility of criminal charges is also very high. It’s worth noting that any past transgressions can’t be undone by filing your returns for those years, they will still remain on your record and come back to haunt you. The safest option is to be honest and open with the IRS from the beginning.

4. Do US Citizens living abroad have to pay taxes on their income?

Yes, US Citizens are required to file income tax returns based on worldwide income, this includes earned, unearned, taxable, or nontaxable income (like capital gains, for example). They are also required to file a tax return if they meet the minimum filing requirement thresholds mentioned above. US Citizens who do not meet these requirements may face penalties and in some cases criminal charges (especially if they were found hiding assets and accounts from the IRS in an attempt to avoid paying taxes). The most important thing is that you should not lie to the IRS about your foreign income. In the case of earned income, US Citizens will have to file a 1040 tax return under either “single” or “married filing jointly” status. This is determined by whether they are married and their spouse is a US Citizen. In most cases, ex-pats who earn less than $100,000 USD will use the married filing separately status and those with higher earnings will be considered married filing jointly. Even if you don’t have any taxable income to report for a particular year, you still need to file your return and claim zero as your taxable income, otherwise, you may face penalties that can add up very quickly!

The US government wants to ensure that all of its citizens are paying the appropriate taxes for any income they may have earned while living abroad. It’s important to be aware of these regulations and take action accordingly if you’re a citizen who is filing overseas. Otherwise, the consequences can be very expensive! We hope you found this information helpful.

So, if you want to instruct your children in the finer points of money-making and personal finance, consider the following suggestions, and feel free to adapt each one based on a youngster’s age.

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Budgeting

For children 10 and older, basic budgeting is a great topic to introduce. Not only can you begin by showing them techniques for budgeting household expenses, but they can learn how to deal with their own money from part-time jobs, chores, and allowances. Explain about setting up a budgeting app online and create an adjustable budget so they can see how to make a fixed amount of money last for a week or a month at a time.

College Expenses

Send your kids to college without over-burdening them with debt. After scholarships, grants, in-state tuition discounts (if available), and whatever other resources can be put toward the cost of schooling, consider at least subsidizing the total bill. Some parents pay for the entire cost, but there’s no need to do so.

The thing you want to convey to your child is that it’s a good idea for them to focus on their studies and getting an appropriate job after graduation. Let them know that you’re okay with covering some or all of the cost of school. If you choose to take this route, you’ll not only increase the chance of their success in the working world but can turn to low-rate Private Parent Loans for borrowing. The Private Parent arrangement is geared for mothers and fathers who don’t want to be cosigners on a loan but the main borrowers. That way, when graduation day comes, your son or daughter won’t be weighed down by education debt before they even have a chance to begin their careers.

Saving

Learning to save on a regular basis is a habit that every young person should learn. Unfortunately, many aren’t exposed to the concept until their late teens. To get a head start, show youngsters at about age nine how to open a savings account at a local bank, make regular deposits, and check the balance whenever they wish. Consider using a child account that most banks offer, where you’ll have to approve any withdrawals.

Using Credit Responsibly

Children 12 and older are at the perfect age to start using credit. There are two caveats to this bit of advice. One, the amounts should not exceed a relatively low amount, perhaps $100. Two, you’ll need to keep a close eye on monthly statements to be certain that the preteens are spending responsibly. Most major financial institutions offer kid cards that are essentially a low-limit version of standard-issued credit cards. Always remember to monitor usage and have regular discussions with your children concerning when it makes sense to use plastic.

Taxes

Any teenager who works a summer job learns about taxes, whether they want to or not. Avoid filing for them. Instead, show them how to choose the correct forms, figure out whether they need to file or not, and how to use online resources to take care of the rest. Then, offer a quick tutorial on how you prepare your own tax filing each year so they’ll learn about the importance, and legality, of the annual ritual. Take the time to explain the way general taxation rates work, how deductions and credits can greatly lower a typical tax bill, and why it’s so important to file on time and pay the correct amount owed, or request a refund.

Retirement

Even older teens have a tough time wrapping their minds around the concept of preparing for a financially secure retirement. Even so, it’s wise to discuss the topic and give them a general outline of the steps you’ve taken to prepare for the time when you’re no longer working. Let them know how essential it is to start as early as possible to take advantage of compound interest.

Charitable Giving

Even if your kids only earn a few hundred dollars at a summer job, consider teaching them about the value of donating at least a small portion, even one or two percent, of their earnings to a worthy charity. This step is an effective way to demonstrate to youngsters that money is not all about greed and wealth, but also about helping others.

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Social Security Income

At one time in the not-too-distant past, social security benefits recipients paid no tax on the money at all. Nowadays, the IRS uses a complex formula based on your other earnings, amount of social security, and a few other factors to determine how much you need to pay in taxes. The good news is that unless you are very well off, the vast majority of your social security payments will not be taxed at all.

Life Insurance Settlements

Millions of working and retired adults sell their life insurance policies for cash. The reasons vary, but the big question is settlement money tax-free? The answer is yes and no. The first step you should take if you intend to sell a policy is to review a comprehensive guide on life settlement taxation rules. Be sure to do so before you sign on the dotted line and make the deal official. People do not have to pay any tax on whatever their cost basis is in the policy. They pay the ordinary rate on any amount received above cost basis but less than the cash surrender value. Finally, they have to pay capital gains rates on whatever amount of the life settlement is above the cash surrender value.

Royalties

If you wrote a book or published anything from which you received royalty payments, the rule is simple in that the money is taxed at ordinary earnings rates. So, if your W-2 wages from a regular job amount to $40,000 and you received $2,000 in royalties, then your total income would be $42,000.

Found Money

Tax attorneys and CPAs are often asked the question on what to pay taxes on and this would fall into that category of top taxable questions with lesser-known answers. What if you find a $100 bill in the street and keep it, after looking for the rightful owner, of course? Legally, the money is yours if you found it in a public space. For taxation purposes, it’s ordinary income and you can simply add it to your regular wages and any other earnings you had for the year. It seems fanciful and humorous, but people often find large sums of discarded money in unexpected places, and they are legally obligated to report it on their annual returns. Whether they do or not is another question. 

Barter Income

One of the most misunderstood points of taxation law is related to bartering, a transaction in which people trade services and goods. Say you agree to mow your neighbor’s lawn and instead of cash, he gives you a brand-new toaster oven he received as a gift, but didn’t need. You need to report an amount on your return to reflect the fair market value of the toaster oven.