The Do’s and Don’ts of Tax Season for Dental Practices
No matter how long you have been working as a dental practitioner, chances are tax season remains the bane of your existence. There is something so frustrating about having to itemize every single expense and income source that makes it truly a process worthy of frustration. Even with a tax professional on your side, it can be a testy process that can trigger a lot of anxiety. Let’s take a look at some do’s and don'ts of tax season to help you navigate the inevitable tax process:
Do: Keep Everything Organized
Having a filing system in place is a good way to make the tax season a lot less painful. Keeping track of receipts, payments, income records, and everything else can help keep things neat and tidy, allowing you to simply pull documents as they are needed and enter in the information for your tax forms.
Don’t: Rush the Process
Give yourself plenty of time to get everything in order. Taxes are filed around the same time each year so be sure to have everything ready to go in advance to prevent a race to the finish line for filing. This leaves room for errors, which you definitely do not want when dealing with your income. Similarly, do not hesitate to file for an extension if you need to. It is better to have too much time than not enough!
Do: File Electronically
Paper filing is, for most, an outdated method. Filing electronically can simplify the process and actually get you any refund you may have coming, a lot sooner since the IRS deals with electronic filing documents much more quickly.
Don’t: Use Last Year’s Data
No matter how stable your business has been, there are changes in your income and expenses year to year. These changes can make a big difference in the amount you pay in taxes and how much you potentially get back. Due to this, it is a good idea to always use current annual data and trust your CPA, if you have one, to enter it correctly.
Do: Understand Tax Laws
Anyone paying taxes should have a basic understanding of what they are paying and any changes that are impacting how much they pay. Understanding your local and national tax laws can help you to understand exactly what you are getting back or paying in, as well as prevent overpayment. The same goes for understanding changes to these laws, as they can make a big difference in how you file and what information you need.
Do: Understand Freelancer Taxation
If you use a freelance service, like Stynt, you have tapped into the gig economy. For many cities and states, freelancers still require a W-2, but in other regions they may need a 1099. Understanding the difference between these forms will be incredibly important come tax season, since a W-2 form makes the employer liable for payroll taxes, where a 1099 leaves those taxations to the freelancer.
If you have yet to hire freelancing dental professionals, Stynt is here to help. Fill out the form on out website for more information or download our app!