Podcast Recap: How Payment Processing Fees Are Hurting Your Profits

In the latest episode of Beyond Bitewings, we sat down with Jeremy Lasarus, founder and CEO of Payment Brokers, a fintech company using AI to slash costs in the payment processing industry. Jeremy, a seasoned entrepreneur who has built and sold eight successful companies, shared valuable insights on how small and medium-sized businesses (including dental practices) can save thousands of dollars annually by addressing hidden inefficiencies in credit card processing.

The Hidden Cost of Payment Processing

Jeremy highlighted a pressing issue: predatory pricing in the payment processing industry. He explained that small and medium-sized businesses often bear the brunt of excessive fees, while larger enterprises enjoy significantly lower rates. These inflated fees can quietly erode profit margins, costing businesses thousands of dollars each year.

Drawing from his own experiences as a business owner, Jeremy recounted how high processing fees nearly bankrupted his first company. This personal struggle inspired him to found Payment Brokers, a company dedicated to leveling the playing field for small businesses by negotiating better rates with existing processors.

How Payment Brokers Makes a Difference

Payment Brokers operates on a unique model combining technology and human expertise. Using advanced machine learning, they analyze credit card processing statements to identify hidden costs and profit margins. Once identified, their team negotiates directly with the payment processor to secure lower rates—without requiring businesses to switch providers, change equipment, or retrain staff.

Jeremy emphasized the importance of ongoing monitoring. Processors often adjust rates with little or no notice, making it essential to have a system that tracks changes and holds providers accountable. Payment Brokers offers a monitoring service to ensure clients continue to save money long after the initial negotiation.

Real Savings for Small Practices

Jeremy shared an inspiring case study about a small dental practice in Miami. With just one location, the practice was paying exorbitant processing fees that Jeremy’s team reduced by $6,000 per month. This single change resulted in an annual savings of $72,000—money that went straight to the bottom line.

For dental and medical practices, these savings can have an even greater impact during an acquisition or sale. Jeremy explained that reducing expenses directly increases EBITDA, which can significantly boost the valuation of a practice during a sale. For example, an annual savings of $72,000 at a 5x EBITDA multiple could add $360,000 to the sale price.

Practical Advice for Business Owners

Jeremy shared actionable tips for businesses looking to reduce their payment processing fees:

  1. Calculate Your Effective Rate: Divide your total monthly fees by your total credit card sales to determine your effective rate. If it’s above 2.2%, it’s time to take action.
  2. Negotiate with Data: Armed with insights from your statements, approach your processor to renegotiate rates.
  3. Avoid Costly Pitfalls: Watch out for flat-rate plans, cash discounting schemes, and unnecessary add-ons like paper statements or redundant software.

Why Good Advisors Matter

Jeremy also discussed the value of having trusted advisors in your corner. Whether it’s an accounting firm that focuses on dental practices or a specialized firm like Payment Brokers, the right advice can save businesses from costly mistakes and unlock opportunities for growth.

Podcast Recap: Funding a Dental Startup or Expansion

For many dentists, opening their own practice is a major milestone—and often, it’s one of the biggest financial investments they’ll ever make. In a recent Beyond Bitewings podcast episode, Ash invited Adam Schenck from Bank of America to discuss the ins and outs of practice financing, offering valuable insights for dental professionals thinking about opening or acquiring a practice.

Build Your Support Team

If you’re considering starting or purchasing a dental practice, your first step shouldn’t be Googling “dental practice loans.” Instead, focus on assembling a team of experts who understand the unique aspects of the dental industry. This includes:

  • A CPA familiar with dental practices – like Edwards & Associates, of course!
  • A lender with experience in financing dental startups or acquisitions
  • Industry-specific advisors, such as financial planners and insurance providers

“You’re already an expert in dentistry, and that’s where your focus should remain,” emphasized Adam. “Surround yourself with professionals who are experts in their fields—construction, accounting, banking—so they can guide you through the process without you having to become an expert in those areas.”

Cash Flow is Key

When applying for a loan, it’s crucial to consider both your personal and business cash flow. Banks often look at the big picture—your financial habits, recent large expenses, and your ability to sustain yourself during the early months of practice ownership.

One common concern for new practice owners is having enough funds to cover operational costs, such as payroll and rent, before the business starts generating steady revenue. To address this, lenders often include working capital in the loan. This ensures you have the cash needed to operate smoothly during the initial ramp-up phase.

“Don’t stress about out-of-pocket costs,” Adam noted. “Your loan should cover everything—from building the practice to providing the working capital you need to keep things running.”

Startup vs. Acquisition: Keep Your Options Open

A common dilemma for new dentists is whether to build a practice from scratch or acquire an existing one. Both options have their pros and cons.

  • Startup: You have full control over the design, culture, and operations of the practice. However, it may take longer to build a patient base.
  • Acquisition: You gain an established patient base and cash flow from day one. Yet, you may need to invest in updating the office or marketing to grow the practice further.

Adam’s advice? Keep an open mind. “Sometimes, dentists spend years searching for the perfect practice to buy when they could have already started building one. The key is to assess what’s available in your desired location and remain flexible.”

Beware of Misinformation

When researching practice loans online, be cautious about taking everything at face value. Social media and forums can often present half-truths or misleading information about interest rates and financing terms. Adam recommended verifying information with trusted advisors and asking questions. “Fact-check everything, and don’t hesitate to ask your lender or CPA for clarification.”

Preparation is Everything

If you’re a dentist considering a new practice venture, we can help you navigate the financial side of the journey. From tax planning to financial advisory services, we specialize in supporting dental professionals at every stage of their careers.

For more personalized advice, contact us today, and don’t forget to subscribe to the Beyond Bitewings podcast for more insights on growing your practice and optimizing your financial future.

When Cheap Solutions Fail: A Lesson from Bench’s Sudden Shutdown

Dental practice owners and administrators are no strangers to juggling finances and operations. That’s why outsourcing bookkeeping and accounting often feels like a smart, time-saving move. But what happens when your chosen provider shuts down unexpectedly?

This is exactly what’s happening with Bench, a popular outsourced accounting service, which has announced its immediate closure. For many small businesses—including dental practices—this abrupt shutdown leaves them scrambling to find a replacement and navigate potential disruptions to their financial records.

The Real Cost of “Cheap” Bookkeeping Services

On the surface, services like Bench offer an affordable and convenient option for bookkeeping. However, the downside of budget providers often becomes painfully clear when things go wrong. Whether it’s inconsistent service, lack of industry-specific expertise, or, as in this case, an unexpected closure, relying on a “cheap” solution can leave you vulnerable.

Dental practices, in particular, require specialized financial management to navigate unique challenges like insurance reimbursements, patient financing, and regulatory compliance. When a provider without deep industry knowledge falters, you’re left with a mess to clean up—often at a much higher cost than you initially saved.

We’re Here to Help

If your dental practice has been affected by Bench’s closure, you don’t have to face this challenge alone. Our team specializes in accounting and bookkeeping services tailored specifically for dental practices. We understand the intricacies of your industry and can seamlessly transition your financial records while maintaining accuracy and compliance.

With our services, you gain:

  • Industry Expertise: We understand the nuances of dental practice accounting, from managing collections to tracking overhead.
  • Reliability: You’ll work with a trusted team, not an algorithm.
  • Custom Solutions: Our services are tailored to your practice’s unique needs, ensuring financial clarity and confidence.

Don’t Get Left Holding the Bag

The Bench situation is a stark reminder that inexpensive solutions often come at a high cost. Investing in a specialized, reliable accounting partner ensures your financial operations remain stable and your practice is prepared for growth—without fear of sudden disruption.

If you need immediate assistance transitioning from Bench or are looking for a more dependable partner, we’re here to help. Contact us today to discuss how we can support your dental practice.

Podcast Recap: How to Secure Dental Practice Funding

For many dentists, owning a practice is a significant career milestone. Whether you’re fresh out of dental school, ready to expand your current business, or considering acquiring an established practice, understanding the financing process is essential. In a recent episode of Beyond Bitewings, guest Danielle from Huntington Bank provided invaluable insights into dental practice lending and what dentists need to know to make their goals a reality.

Starting Your Own Dental Practice

For dentists looking to start a practice from the ground up, preparation is key. Danielle emphasized the importance of:

  1. Living Below Your Means Before Starting: Dentists transitioning from associate roles often have high incomes but should avoid significant lifestyle expenses before opening their practice. Managing personal debt and expenses ensures they are better positioned for loan approval.
  2. Understanding Loan Amounts and Expectations: Typical startup loans range between $750,000 and $800,000, covering construction, equipment, and working capital. While this amount may seem daunting, lenders like Huntington Bank offer specialized programs tailored to dentists, often requiring zero down payment.
  3. Building a Strong Team: Collaboration with your CPA, financial advisor, and lender is crucial to align your financial goals and set realistic expectations.
  4. Prioritizing Working Capital: Loans often include funds for working capital, which cover initial overhead, payroll, rent, and marketing while your practice builds its patient base.

Managing Debt and Choosing the Right Lender

One common concern for new dentists is student debt. Danielle clarified that many lenders, especially those experienced in the dental industry, don’t consider student loans a barrier. Instead, they focus on cash flow and the dentist’s ability to generate revenue.

She also highlighted the importance of working with industry-specific lenders who understand the nuances of dental practices. These lenders often offer more favorable terms, such as fixed rates, no down payments, and lower fees, compared to general lenders who may require SBA guarantees or higher interest rates.

Acquiring an Existing Practice

For dentists interested in acquiring a practice, the process is unique and requires careful evaluation:

  1. Cash Flow is Critical: Lenders assess whether the practice’s revenue can support both the loan payment and the buyer’s income needs. Practices with strong hygiene programs and consistent cash flow are often more attractive to lenders.
  2. Finding the Right Fit: Acquisitions are like dating — not every practice is the right match. It’s essential to evaluate whether the culture, location, and patient base align with your professional goals.
  3. Building Relationships: Establishing a strong relationship with your lender and CPA ensures a smoother acquisition process and helps overcome challenges, from lease negotiations to financial evaluations.

Why Now Might Be the Best Time to Start or Expand

Danielle discussed the rising costs of starting and running a dental practice. While interest rates fluctuate, construction and equipment costs tend to remain high. Delaying could mean paying more in the long run. Additionally, lenders often offer flexible refinancing options to adjust loans as interest rates change, making now an excellent time to move forward with your plans.

The Importance of Relationships in Lending

One of the standout messages from the episode was the value of a lender who prioritizes relationships. Danielle shared how Huntington Bank assigns dedicated representatives to guide dentists through every step of the process, ensuring personalized support and avoiding the frustrations of dealing with large, impersonal banks.

If you’re considering your financing options or want to learn more about the process, contact us today. Our team is here to help you achieve your dreams of practice ownership with expert guidance tailored to your unique needs.

2025 Mileage Rate Changes: New Rate Puts More Money Back in Your Pocket

While most dentists don’t spend their day on the road, there is often some moving from place to place required for your job. Starting January 1, 2025, the IRS is making a change that could impact the way you track and claim those travel expenses. The standard mileage rate for business use will increase to 70 cents per mile, up from 67 cents in 2024. While it may sound small, this increase could lead to bigger tax savings for practice owners who frequently log business miles.

What’s New for 2025?

Here’s a quick look at the updated rates for various types of mileage:

  • Business travel: 70 cents per mile (up from 67 cents in 2024)
  • Medical and moving mileage (for qualified active-duty military): 21 cents per mile (unchanged)
  • Charitable driving: 14 cents per mile (unchanged, as set by federal law)

These rates apply to gas, diesel, electric, and hybrid vehicles, so no matter what you drive, you’re covered.

How Vehicle Depreciation Affects Your Deductions

When you use your vehicle for business, part of the standard mileage rate covers depreciation — the natural loss in value of the vehicle over time. For 2025, the IRS has set the depreciation portion at 33 cents per mile. This matters if you plan to sell or trade in your vehicle down the line since this depreciation affects how much of its value you can claim as an expense.

Two Ways to Calculate Your Deduction

There are two ways to claim a vehicle expense deduction:

  1. Standard mileage rate: The simpler option, where you track your total business miles and apply the IRS-approved rate per mile to calculate your deduction.
  2. Actual expense method: This method requires you to track every expense tied to the vehicle (like gas, insurance, maintenance, and depreciation) and deduct a percentage based on business use.

If you’re unsure which method works best for your dental practice, our team can help you run the numbers and identify which option gives you the biggest benefit.

Changes to FAVR Plans for Employers

If you’re a dental practice owner reimbursing employees for driving their personal vehicles for business purposes, you should know about the IRS changes to Fixed and Variable Rate (FAVR) plans. For 2025, the IRS set the maximum standard automobile cost at $61,200, which is $800 lower than in 2024. This cap applies to the fleet-average valuation rule and the vehicle cents-per-mile rule as well. If you’re managing reimbursements for your team, it’s important to stay on top of these changes to ensure you’re compliant with IRS rules.

What Should You Do to Stay on Track?

Here are a few simple steps to make sure you’re maximizing every available deduction:

  • Track Your Mileage: Use an app or software to log every business-related trip, ensuring you capture every deductible mile.
  • Choose the Best Deduction Method: The standard mileage rate is simple, but the actual expense method may save you more, especially if you’re driving a lot. We can help you determine which option is right for you.
  • Check Your Reimbursement Practices: If you’re reimbursing employees for business travel, make sure you’re following updated FAVR rules to avoid IRS penalties.

If you’d like to discuss how these changes impact your 2025 taxes, reach out to our team today. We’re here to help you make every mile count.

Source: IRS Notice 2025-5

Effective Strategies for Selling Your Dental Practice

For dentists, transitioning out of a practice is one of the biggest financial and emotional decisions of their careers. On our latest episode of Beyond Bitewings, we sat down with Steve Hipson, a seasoned dental practice broker. As the owner of the North Texas franchise of DDSmatch.com, Steve specializes in helping dentists successfully plan and execute practice transitions, and here is a synopsis of that conversation.

Start Preparing 3-5 Years in Advance

One of Steve’s key pieces of advice is to start planning 3 to 5 years before you plan to sell. While it may seem early, this timeline allows for strategic preparation that can significantly impact the value of your practice. Many dentists wait until they’ve started slowing down production, often due to burnout, injury, or lifestyle changes. But if production starts to decline, so does the value of the practice.

To avoid this, dentists need to get ahead of the curve and be proactive about maintaining production levels. This approach not only supports a higher valuation but also allows sellers to be more intentional about when and how they transition out of their practice.

Understand How Your Practice is Valued

When it comes to valuing a dental practice, dentists want to get fair market value assessments to get a clear, objective valuation based on revenue, production, and other key financial metrics. This removes the guesswork and sets clear expectations for both sellers and buyers.

Many dentists are also curious about EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), especially when dealing with DSOs (Dental Service Organizations). While EBITDA plays a major role in offers from DSOs, doctor-to-doctor sales prioritize different factors, like compatibility between the buyer and seller, the buyer’s clinical skills, and the location of the practice.

Selling to a Private Buyer vs. a DSO

One of the most critical decisions a dentist makes when selling a practice is whether to sell to another dentist or to a DSO. Both have pros and cons, and Steve’s advice is to remain open to both options.

Here’s a quick breakdown of the differences:

Private Buyer (Doctor-to-Doctor)DSO (Dental Service Organization)
Focus on compatibility and clinical fitFocus on EBITDA and financial metrics
Buyer often plans to run the practice themselvesDSO manages the practice while hiring providers
Less emphasis on cost-cuttingDSOs may streamline operations and increase efficiencies
Simpler, relationship-driven processCan result in higher offers but often involves stricter requirements

DSOs are a great option for dentists who want to remain part of the practice after the sale. Many dentists like this approach because it allows them to continue practicing while offloading management responsibilities like HR, compliance, and vendor negotiations. On the flip side, doctor-to-doctor sales are often simpler and more personal, with a focus on matching buyer and seller personalities, skills, and values.

Confidentiality is Key

One of the top concerns for dentists planning to sell their practice is maintaining confidentiality. Dentists fear that if their staff or patients find out they’re planning to sell, it could cause panic, employee turnover, or disruptions in patient care. Look for partners that prioritize maintaining confidentiality in every transition. All communications and negotiations should be handled discreetly, and announcements should only made when the sale is complete and both parties are ready.

The Importance of Hiring the Right Team

Transitioning a dental practice isn’t a solo endeavor; it requires a team of experienced professionals, including:

  • Brokers to manage the sale process and negotiations
  • CPAs to ensure the financials are in order
  • Attorneys to handle the legal side of the transaction
  • Lenders to assist buyers with financing

DDS Match refers to their approach as a “trusted transition process”, where his team works with the seller, buyer, and support professionals from start to finish. They focuses on creating smooth transitions where both the buyer and seller walk away satisfied.

How to Get Started

If you’re thinking about selling your practice or just want to explore your options, start early. If you’d like to connect with Steve Hipson for more information, you can reach him at s.hipson@ddsmatch.com or visit ddsmatch.com to learn more about his process for buying and selling dental practices.

Exploring Locum Tenens for Dentists

If you’re a dentist looking for more flexibility, less overhead stress, and maybe even a chance to see the country (or just play more golf), the idea of becoming a locum tenens dentist might be right up your alley. In the latest episode of Beyond Bitewings, we sat down with Shelby and Sarah from Barton Associates, the fourth-largest staffing agency in the U.S., to discuss the ins and outs of locum tenens for dental professionals.

Whether you’re a recent dental school graduate looking for experience, a mid-career dentist seeking variety, or a “kind-of-retired” dentist who wants to stay in the game on a part-time basis, locum tenens offers a unique way to practice on your terms. Here’s a look at what locum tenens is, who it’s best for, and how Barton Associates makes the whole process simple.

What is a Locum Tenens Dentist?

The term “locum tenens” is Latin for “to hold one’s place.” Essentially, locum tenens dentists step in to temporarily fill a spot at a dental practice, often when the regular dentist is out on leave, dealing with an emergency, or when a practice is short-staffed.

But locum tenens isn’t just for practices in a bind — it’s also a great option for dentists looking for a change of pace. You get to work on a schedule that fits your life while still earning an income. Plus, you can avoid many of the headaches that come with running a practice, like insurance paperwork and managing staff.

According to Shelby and Sarah from Barton Associates, there’s been a huge rise in dentists choosing this path, especially since COVID-19 brought on a wave of burnout. Locum tenens allows dentists to keep practicing their craft while cutting out a lot of the stress that full-time practice ownership can bring.

Who is Locum Tenens For?

The beauty of locum tenens is that it works for dentists at all stages of their careers. Here are a few groups who can benefit most:

1. Recent Dental School Graduates

Finding the “perfect” first job right out of school can be tough. Locum tenens gives new grads a chance to test the waters. You can work at different types of practices — private offices, DSOs, and community health clinics — and see which setting suits you best.

Why It’s a Win:

  • Experience multiple practice settings without long-term commitments.
  • Boost your resume and credentials while figuring out what kind of practice you want.
  • Save time on job hunting — Barton Associates handles it for you.

2. Semi-Retired Dentists (A.K.A. “Not Ready to Call It Quits”)

If you’re a dentist who’s technically retired but still loves the craft, locum tenens could be your perfect “part-time retirement plan.” Many retired dentists aren’t ready to fully walk away but aren’t interested in the grind of owning or running a practice. Locum tenens lets you work when and where you want, without all the admin headaches.

Why It’s a Win:

  • Stay in the game while working on your terms (not your office manager’s).
  • Travel to new places for short assignments (and, yes, travel expenses are paid for).
  • Some dentists even bring their pets, kids, and yes — even horses (yes, this actually happened) on assignments.

3. Full-Time Dentists Seeking Flexibility or Burnout Relief

If you’re feeling overwhelmed by the business side of running a practice, locum tenens might be the breath of fresh air you need. It’s a chance to keep your clinical skills sharp without managing patient files, handling insurance paperwork, or leading a team of employees.

Why It’s a Win:

  • Focus on patient care without managing the “business” of dentistry.
  • Enjoy a more flexible schedule — work a few weeks on, then take a few weeks off.
  • You can travel or stay close to home, depending on your preferences.

How Does It Work?

Curious about what the process looks like to become a locum tenens dentist? Here’s a simplified breakdown:

  1. Reach Out to Barton Associates: You’ll chat with a recruiter like Shelby or Sarah, who will learn about your career goals, where you’d like to work, and what type of assignments you’re looking for.
  2. Credentialing and Licensing: This is the “paperwork phase” where you provide your licenses, credentials, and other documents. Luckily, Barton has a whole team that handles this for you, saving you from those endless phone calls and email threads with licensing boards.
  3. Find the Right Fit: Once everything is ready, Barton will connect you with open assignments that match your preferences — whether it’s a week-long gig in New Mexico or a 3-month stay at a DSO in California.
  4. Start Working: You’ll travel (if necessary), get set up at the office, and get to work. Travel costs and accommodations are often included.
  5. Get Paid: Barton pays you directly as an independent contractor. No awkward conversations with the dental office about payment.

Why Locum Tenens Could Be Better Than a Part-Time Associate Position

If you’ve considered picking up a part-time associate position at a local practice, you might think, “Why not just do that?” But as the podcast revealed, there are some big differences.

  • Flexibility: Part-time associate roles often come with set schedules, while locum tenens offers more control over when and where you work.
  • Fewer Complications: Some practices are hesitant to hire an associate who owns a practice of their own. Locum tenens eliminates that hesitation.
  • Variety: Locum tenens dentists get to work in different practice settings — DSOs, community health clinics, private practices, and more.

Final Thoughts

If you’re a dentist craving freedom, flexibility, or just a chance to do what you love without the headaches of running a practice, locum tenens might be exactly what you need. Whether you’re looking for adventure, retirement balance, or a chance to sample different types of practice settings, locum tenens offers the chance to customize your dental career.

With support from Barton Associates, the process is simpler than you might think. And who knows — you could be golfing in a new state every weekend while getting paid to practice dentistry during the week.

Want to learn more? Check out the full Beyond Bitewings podcast episode and if locum tenens sounds like a good fit for you, reach out to Barton Associates to learn more.

How Potential 2025 Tax Changes Could Impact Your Dental Practice and Personal Finances

With Trump’s proposed 2025 tax law changes on the horizon, it’s crucial for dental practice owners and their families to stay informed about how these updates might shape their financial strategies. While we can’t know if the proposals discussed during the campaign will pan out in the end, it is still important to understand what they are and how they can impact your dental practice and personal financial planning. 

Below, we’ve summarized some of the the proposals, focusing first on business-related changes and then on those that could affect your personal finances.

Potential Tax Changes Impacting Dental Practices 

1. Restoring TCJA Business Tax Provisions

  • What It Is: A proposal to reinstate business-friendly provisions from the Tax Cuts and Jobs Act (TCJA), such as 100% bonus depreciation, research and development expensing, and interest deduction limitations.
  • Government Impact: This is expected to increase gross national product (GNP) by 0.5% and add 119,000 jobs but reduce tax revenue by $643 billion over 10 years.
  • What It Means for You: These changes would allow your dental practice to benefit from significant deductions on investments like new equipment or technology. This could free up cash flow for reinvestment in your business.

2. Encouraging Domestic Production

  • What It Is: A deduction of 28.5% for domestic production activities, effectively reducing corporate tax rates on qualifying activities to 15%.
  • Government Impact: Expected to increase GNP by 0.2% and add 38,000 jobs, but it could reduce tax revenue by $361.4 billion over 10 years.
  • What It Means for You: Dental practices that rely on domestically manufactured supplies or equipment could see lower costs and additional tax savings, making it easier to invest in your practice.

3. Extending the Opportunity Zone (OZ) Program

  • What It Is: Extending the OZ program, which provides tax benefits for investments in underserved communities.
  • Government Impact: Stimulates community development by encouraging housing, infrastructure, and business growth in underserved areas.
  • What It Means for You: If you’re considering opening a new location in an underserved area, the OZ program could offer tax deferrals or exemptions, making expansion more financially viable.

Potential Tax Changes Impacting Individuals

1. Permanent Gift and Estate Tax Exemptions

  • What It Is: Maintaining the current lifetime gift and estate tax exemption of $13.99 million per spouse.
  • Government Impact: Expected to reduce tax revenue by $205.6 billion over 10 years with minimal economic effects.
  • What It Means for You: This simplifies estate planning and makes it easier for high-net-worth families to pass on wealth to future generations.

2. No Tax on Tips

  • What It Is: A proposal to exempt tips from income taxes, though employment taxes would still apply.
  • Government Impact: This would have a negligible effect on GNP but would reduce tax revenue by $118 billion over 10 years.
  • What It Means for Your Practice: While it won’t directly impact dentists, exempting tips from taxes could benefit service industry employees, potentially easing wage pressures.

3. Exempting Overtime Pay from Federal Income Tax

  • What It Is: A proposal to exempt overtime pay from federal income taxes.
  • Government Impact: Expected to increase GNP by 0.3%, create 405,000 jobs, and reduce tax revenue by $747.6 billion over 10 years.
  • What It Means for You: If your practice employs hourly staff, this could make overtime work more appealing, helping you retain staff and cover busy periods more effectively.

4. Federal Income Tax Exemption for Social Security Benefits

  • What It Is: Eliminating federal income taxes on Social Security benefits.
  • Government Impact: Projected to increase GNP by 0.1%, add 55,000 jobs, and reduce tax revenue by $1.2 trillion over 10 years.
  • What It Means for You: Retirees, particularly those in higher tax brackets, could see significant savings, making this a boost for retirement planning.

Looking Ahead

These potential changes highlight the importance of staying proactive with your financial and tax strategies. While some updates offer new opportunities for growth and savings, others may introduce challenges that require careful planning.

By working closely with us, you can position your dental practice and personal finances to accommodate these changes successfully. Reach out to our team today to discuss how these proposals might impact your future.

Cash Flow & Equity: Real Estate Investment Tips for Dental Professionals

In the latest episode of Beyond Bitewings, Ash sits down with Paul Montelongo, founder of Montelongo Capital, to explore investment strategies tailored to dental professionals and business owners. With more than 11 years of experience in multi-family real estate, Paul shares how cash-flowing assets like apartments, self-storage facilities, and even oil and gas ventures can provide equity growth and tax advantages.

What Makes Real Estate Investments Ideal?

Paul highlights the three pillars of his investment philosophy:

  1. Cash Flow: His firm prioritizes assets that generate consistent monthly income exceeding operating costs, ensuring stable returns for investors.
  2. Equity Growth: By strategically improving properties, they appreciate and maximize value over the asset’s life cycle.
  3. Tax Benefits: Real estate investments can offset tax liabilities, a major advantage for high-earning professionals like dentists and physicians.

Montelongo Capital acts as an owner-operator, handling daily management tasks, so investors—many of whom are busy professionals—can participate passively and focus on their own businesses.

Multifamily Syndicates: A Gateway to Passive Income

Multifamily syndicates, where investors can participate as limited partners or even general partners, enjoy passive income with minimal involvement, while investors gain additional tax advantages. Most properties operate on a five-year plan, but some can sell as quickly as 33 months.

Why Invest Now?

As the market adjusts, potential investors have a unique opportunity in 2024. Montelongo Capital is acquiring properties 20-25% below market value, presenting strong potential for equity growth. For example, their current project in Corpus Christi, Texas, projects a 20% annual return, combining a 7% preferred rate of return with additional profits from property appreciation.

A ‘Done-for-You’ Investment Model

The ‘done-for-you’ model is where an outside team manages everything from acquisition and operations to quarterly distributions, making it easy for investors to grow their wealth without the day-to-day burden. This can be particularly appealing to dentists and other busy professionals who want to invest in real estate yet don’t have time to manage the process. 

For dental professionals and business owners considering diversifying their investments, this episode of Beyond Bitewings offers valuable insights into the benefits of real estate intestment. To learn more, visit Montelongo Capital and explore how strategic investments can secure your financial future.

Understanding Changes in Digital Asset Reporting for Dental Practices

With the rise of cryptocurrencies and other digital assets, the IRS has been expanding its focus on ensuring proper tax compliance in this evolving space. Significant changes to digital asset reporting will affect businesses, including dental practices. These changes primarily center around reporting obligations and the expiration of safe harbor provisions. 

What is the Digital Asset Reporting Rule?

Digital asset reporting refers to the requirement that businesses and individuals disclose their holdings and transactions involving cryptocurrencies or other digital assets. This mandate was first introduced as part of the Infrastructure Investment and Jobs Act (IIJA) signed into law in 2021. The law requires brokers to report cryptocurrency transactions to the IRS and provide information to the account holder, similar to how traditional financial institutions report stock or bond sales.

The IRS expanded its definition of brokers to include entities facilitating cryptocurrency exchanges and transactions, meaning that dental practices may now have more stringent reporting obligations if they handle digital assets.

What Does the Expiration of the Safe Harbor Mean?

Since the IIJA passed, a transitional safe harbor has been in place to provide taxpayers some flexibility in adjusting to the new reporting rules. Under this safe harbor, taxpayers were not penalized for underreporting or failing to report certain digital assets if they made a good faith effort to comply.

However, this safe harbor expires on January 1, 2025. This means that starting in 2025, dental practices and other businesses that deal with digital assets will be fully accountable for meeting the reporting requirements. Failure to comply could lead to penalties, audits, or other tax-related consequences.

Key Changes and What to Expect 

Several changes in the IRS’s approach to digital asset reporting will take effect in 2025, which dental practice owners should be aware of:

  1. Broader Reporting Requirements: Businesses will need to report all cryptocurrency transactions to the IRS, including those made on behalf of patients or as part of payment for services. This also applies to indirect exchanges and sales through third-party platforms.
  2. New Reporting Forms: The IRS will require businesses to use new reporting forms, such as the Form 1099-DA, which will document transactions related to digital assets, similar to the traditional Form 1099-B for securities.
  3. Penalties for Non-Compliance: Once the safe harbor ends, failure to comply with the new digital asset reporting requirements can result in significant penalties. Businesses may face audits or fines for underreporting or failing to report cryptocurrency transactions.
  4. Clarification on Digital Asset Definitions: The IRS has expanded the definition of “digital assets” to include not only cryptocurrencies but also NFTs and other digital tokens. Practices that accept any form of these digital assets will need to ensure proper documentation and reporting.

What Dental Practices Should Do to Prepare

With the expiration of the safe harbor fast approaching, dental practices should take the following steps to ensure they remain compliant with IRS rules:

  • Review Existing Digital Asset Policies: Practices that accept cryptocurrency or other digital assets as payment should assess their current practices for recording and reporting these transactions.
  • Consult with E&A: Given the complexities surrounding digital asset taxation, consulting with tax professionals who understands the specific requirements for digital assets is crucial. 
  • Upgrade Financial Tracking Systems: If your practice deals with digital assets, make sure your accounting and payment systems are equipped to properly track these transactions for IRS reporting.
  • Educate Staff: Ensure that your practice managers and financial staff are up to speed on the new reporting obligations. Having clear processes for handling cryptocurrency payments and other digital assets will be critical for compliance in 2025 and beyond.

As the IRS continues to increase its focus on digital assets, it is vital for dental practices to stay proactive and compliant. With the expiration of the safe harbor, proper reporting is no longer optional, and penalties for failing to meet IRS standards can be significant. Now is the time to review your practice’s digital asset policies and ensure you are prepared for the changes that will come into effect in 2025.

For more detailed guidance, dental practice owners should reach out to us to help them navigate these updates and avoid costly mistakes.

2025 Tax Changes for Dentists and Their Employees

The IRS has announced adjustments for 2025 that will impact deductions, credits, and thresholds. Staying on top of these changes can help maximize tax benefits for you and your employees. Here’s a roundup of the key updates:

Increased Standard Deduction for 2025

The standard deduction—helpful for those who skip itemizing—has increased for the 2025 tax year:

  • Single Filers: $15,000 (up $400 from 2024).
  • Married Couples Filing Jointly: $30,000 (up $800).
  • Heads of Household: $22,500 (up $600).

This deduction can be a valuable benefit to employees who don’t itemize, potentially lowering their taxable income and boosting their take-home pay.

Adjusted Marginal Tax Brackets

While the top tax rate remains 37%, income thresholds have shifted, impacting where different income levels fall. Here are the adjusted brackets:

  • 35% for income over $250,525 (single) or $501,050 (married).
  • 32% for income over $197,300 (single) or $394,600 (married).
  • 22% for income over $48,475 (single) or $96,950 (married).

Knowing where you or your employees stand within these brackets can help with planning deductions and contributions throughout the year.

Alternative Minimum Tax (AMT) Thresholds

The AMT exemption has also increased to $88,100 for individuals and $137,000 for couples, with phase-outs starting at $626,350 and $1,252,700 respectively. This is particularly relevant for high earners who may be subject to AMT.

Enhanced Earned Income Tax Credit (EITC)

The maximum EITC for families with three or more children is now $8,046 for 2025. This could be valuable information for your employees who qualify for this credit, as it can significantly boost their income at tax time.

Fringe Benefits & Health Flexible Spending Adjustments

  • Qualified Transportation and Parking Benefits: Monthly limits rise to $325.
  • Health Flexible Spending Arrangement (FSA): Contribution cap increases to $3,300, with a carryover limit of $660.

These changes allow dental practice owners to offer even more valuable pre-tax benefits, reducing taxable income for employees while supporting healthcare expenses.

Medical Savings Account (MSA) Limits

For 2025, minimum deductibles and out-of-pocket expenses for MSAs have increased slightly. For self-only plans, the deductible is at least $2,850, with a $5,700 out-of-pocket max. Family plans must have a minimum deductible of $5,700, with a maximum out-of-pocket of $10,500.

If you have any questions about how these changes may impact you or your specific situation, reach out to us to schedule a conversation.