Why We Don’t Outsource to Offshore Resources

Today, when many accounting firms are having trouble hiring skilled talent, many are turning to offshore resources to cut costs and increase profits. However, at E&A, we’ve made a conscious decision not to follow that path. For us, the security of our clients’ data and the quality of our services take priority over increasing profits. Here’s why…

The Value of Data Security

In the dental industry, patient confidentiality and data security are not just essential—they’re legally mandated. As your accounting firm, we handle highly sensitive financial data about your practice, employees, and even your patients. By keeping our operations within the U.S., we ensure that your data is protected by domestic privacy laws such as HIPAA and the Gramm-Leach-Bliley Act (GLBA). These laws provide stringent regulations on how client information should be managed, something many offshore firms may not know about or be subject to. Additionally, we are not willing to risk losing control over where and how your data is handled. Offshore jurisdictions may not have the same level of oversight, enforcement, or cybersecurity standards, which can mean increased vulnerability to data breaches and less accountability.

Maintaining Accuracy and Expertise

When you work with us, all of your accounting work is performed by qualified professionals who are familiar with the dental industry, U.S. tax laws, and other pertinent regulations. It is rare for an offshoring provider to have specialized industry knowledge, which can lead to inaccuracies and missed tax-saving opportunities.

In the world of dental accounting, precision is key, and every dollar matters when managing expenses, payroll, financial planning, and tax strategies. By choosing not to use offshore resources, we maintain a higher standard of accuracy, ensuring that nothing is lost in translation or neglected because someone unfamiliar with U.S. dental practice operations is handling your books.

Knowing Where Your Data Is At All Times

One of the benefits of working with us is knowing exactly where your data is stored and who is handling it. Offshore companies may not have the same level of security, so if a data breach occurs, who is responsible? How is your data being stored, and in which country’s jurisdiction does it fall? With our firm, there are no unknowns. Your data stays secure within the U.S., where it is subject to strict privacy regulations.

Choosing Security Over Profits

It’s no secret that offshoring can significantly reduce costs. However, we believe that the potential security risks, coupled with the loss of control over data, are simply not worth it. By keeping our work in-house, we may not maximize profits the same way firms using offshore labor do, but we offer our clients something much more valuable: peace of mind.

We’ve invested in state-of-the-art cybersecurity measures to protect your sensitive financial information, and our team is well-trained and vetted, so you can feel confident that your practice’s financial health is in safe hands.

Why This Matters to Dental Practices

As a dental practice owner, your focus should be on providing top-quality care to your patients. You shouldn’t have to worry about the safety and accuracy of your financial records. By choosing an accounting firm focused solely on those in the dental industry that doesn’t offshore its work, you’re choosing a partner that values security, precision, and transparency as much as you do.

If you want more information about how we safeguard your data and offer the best accounting services for your dental practice, feel free to contact us today. We’re here to help you build a stronger, more secure financial future.

IRS Opens Second Employee Retention Credit Voluntary Disclosure Program

The Employee Retention Credit was created to provide financial relief of up to $26,000 per employee to businesses that retained employees by subsidizing wages during the pandemic. However, many businesses, including dental practices, fell prey to aggressive marketing by deceitful companies that intentionally misled people into believing they were eligible for these credits when they were not. A promise of free money is hard to turn down, so many businesses decided to take the gamble that the IRS would not catch up to them while others unknowingly claimed the credit that did not qualify.

Once the IRS started looking into these claims, they found that up to 90% of them contain some type of fraud and sent more than 25,000 disallowance letters to claimants as of early August 2024. But also knowing that many businesses were duped into filing ERC claims, they launched a voluntary repayment program that ended in March 2024. Now, the IRS has launched a second ERC voluntary disclosure program with a deadline of November 22, 2024, so businesses can correct their mistakes and avoid potential audits, fines, and requirements to repay the credit. 

Common warning signs

Dental practices that claimed ERCs should carefully reassess their claims, especially if third-party firms assisted with the filing. Common red flags that could indicate a fraudulent ERC claim include:

  1. Practices that remained fully operational and did not experience a significant decline in gross receipts may not qualify for the ERC. 
  2. Some businesses misunderstood what constitutes a full or partial suspension under a government order, and many of the ERC mills relied on this confusion. Simply facing challenges during the pandemic doesn’t qualify as a suspension. Dental practices were considered “essential businesses” in almost every location and were not subject to many of the closure mandates.  Therefore, this aspect applied for a very limited period and a few limited geographical locations during 2020 only. If your claim was based solely on a full or partial suspension, your ERC may be considered erroneous.  
  3. Claiming wages paid to family members can lead to problems, as these claims are often ineligible or calculated incorrectly.
  4. Wages that were counted towards PPP loan forgiveness cannot also be claimed for ERC. Double-dipping in this manner is a common error.

What to do now

If you are concerned that some or all of your claim may not be accurate, we encourage you to do the following:

  1. Review your claims: It’s essential to thoroughly review all ERC claims to ensure compliance with IRS rules and all claimed quarters and wages meet eligibility requirements.
  2. Reach out to us: We understand the complexities of the ERC, can provide guidance on the voluntary disclosure program, and can help you correct any errors in past claims.
  3. Participate in the disclosure program: If you suspect your practice may have claimed the ERC incorrectly, consider enrolling in the IRS’s voluntary disclosure program before the November 22, 2024, deadline. This proactive step can help you avoid future interest, penalties and even up to five years in jail.
  4. Stay updated: Tax regulations are constantly evolving. We will continue to provide you with the latest updates on ERC rules and other relevant tax credits, but if you have specific questions, don’t hesitate to call us.

Correcting ERC claims through the voluntary disclosure program can prevent more severe consequences down the line. Not only does this protect your practice’s finances, but it also maintains your credibility and trustworthiness as a business. Don’t wait until it’s too late – review your ERC claims and ensure your practice complies with IRS guidelines. If you need assistance, our team is ready to help.

Improving Dental Practice Profitability

In the latest episode of Beyond Bitewings, Ash is joined by Jessica Jones, the CEO and founder of Build Your Cash Medical Practice. Jessica shared her unique insights into the medical and dental industries, drawing from her extensive experience in helping struggling practices grow into successful, multi-location clinics. Her career began in the 90s within a national marketing company, which eventually led her to working closely with medical practices, helping them convert leads into enrolled patients. This laid the foundation for her later ventures in building and scaling practices.

Jessica emphasized the importance of adapting to changing business environments, a principle that resonates strongly with dental practice managers and dentists. She stressed that what worked in the past may not necessarily be effective today, particularly in a rapidly evolving field like healthcare. Jessica highlighted the necessity of staying attuned to external factors—whether they be regulatory changes, technological advancements, or shifts in patient demographics—that can significantly impact a practice’s success.

One of the key takeaways from the discussion was the importance of delegation and the need to step back from day-to-day operations to focus on strategic growth. Jessica pointed out that many practice owners get bogged down by the minutiae of running a practice, which can prevent them from seeing the bigger picture. By delegating tasks to the right team members and allowing them to take ownership of their roles, practice owners can free up valuable time to focus on business development and patient care. This, in turn, can lead to better patient experiences and overall growth for the practice.

Jessica also discussed the value of integrating cash-based services into dental practices. By offering services that are not covered by insurance, such as esthetic treatments or sleep apnea devices, dental practices can diversify their revenue streams and reduce reliance on insurance reimbursements. This approach not only boosts the financial health of a practice but also provides patients with more comprehensive care options.

Moreover, Jessica underscored the importance of cultivating strong relationships with patients. She advised that personalized care and attention to detail can significantly enhance patient satisfaction and loyalty. For instance, something as simple as remembering personal details about a patient can make them feel valued and increase the likelihood of them returning and recommending the practice to others.

In conclusion, Jessica’s insights provide valuable guidance for dental practice managers and dentists looking to optimize their operations, better engage with patients, and explore new avenues for growth. By focusing on both the quantitative aspects of practice management and the qualitative elements of patient care, dental practices can achieve sustainable success in an increasingly competitive field.

Noncompete Agreements Get Reprieve

Following the Federal Trade Commission’s (FTC) noncompete agreement ban has been quite a ride. In our last article on this issue, we discussed how dueling rulings were leading to confusion. Some of that confusion was cleared up yesterday, August 20, 2024, when U.S. District Judge in Dallas, Ada Brown, blocked the FTC’s proposed ban.

This ruling comes after the U.S. Chamber of Commerce and Ryan LLC challenged the FTC’s authority to enforce such a broad prohibition. Judge Brown stated that the FTC lacked the necessary evidence to justify a sweeping ban on noncompetes, deeming the rule as arbitrary and capricious. The ruling is seen as a victory for businesses that argue noncompetes are essential for protecting trade secrets and maintaining competitive balance. The FTC, which had aimed to implement the rule by September 4, is now considering an appeal, emphasizing that the decision does not prevent them from addressing noncompete issues on a case-by-case basis.

For dental practices, this ruling highlights the ongoing debate over noncompete agreements and their role in the workforce. As the situation evolves, it is crucial for dental practice managers to stay informed and consult with experts to understand how this might impact their hiring and employment practices. While the immediate threat of a blanket ban has been halted, the legal landscape surrounding noncompetes remains complex and could see further changes depending on future appeals or legislative actions.

In the meantime, dental practices should review their existing noncompete agreements to ensure they are fair, reasonable, and compliant with current laws, and consider the potential impacts on employee retention and competition in the industry.

Boost Employee Benefits with Student Loan Matching Contributions

When it is hard to find employees, dental practices that can bring something to the table that attracts – and retains – good team members will win the war for talent. Here’s something to consider: expand your retirement savings plan to match employee student loan payments. 

Based on the guidance provided in IRS Notice 2024-63, dental practices can help employees grow their retirement savings, even if those employees are currently prioritizing paying off student loans. This option applies to retirement plans years beginning after December 31, 2023, so you can implement it right away too. Here’s a closer look at what this means for dental practice employers and their teams: 

  • New Matching Opportunities: Employers can now match qualifying student loan payments, allowing employees to benefit from retirement savings growth while managing their educational debt. This is a strategic move, especially for dental practices looking to retain younger staff who may be burdened by student loans.
  • Certification Process: Employees will need to certify that their student loan payments qualify for these matching contributions. This ensures that the benefits are accurately distributed and that employees receive the retirement contributions they deserve.
  • Flexible Plan Integration: The IRS guidance offers flexibility in how dental practices can integrate these matching contributions into their existing retirement plans. Employers can adopt procedures that fit within their unique plan structures, making the transition smoother.
  • Nondiscrimination Testing Adjustments: To accommodate this new benefit, the IRS has provided special relief from certain nondiscrimination tests for 401(k) plans. This helps ensure that offering student loan matching contributions won’t lead to compliance challenges.

Why This Matters for Dental Practices

By implementing this new option, dental practices can strengthen their employee benefits package, particularly appealing to staff members who are managing student debt. This can improve employee satisfaction and retention, contributing to a more stable and committed workforce.

What Next?

Dental practice owners should consider how this new guidance could enhance their retirement plan offerings. If you’re interested in exploring how to implement these changes in your practice – even if you aren’t currently a client – don’t hesitate to reach out for expert advice tailored to your specific needs. We can help ensure your plan is compliant and optimized for both your practice and employees.

Strength in Numbers: The Value of Our Dental Network for Your Practice

When you partner with Edwards & Associates, you’re not just getting top-tier financial and accounting expertise tailored to dental practices. You’re also gaining access to our extensive network of industry vendors. Over the years, we’ve cultivated relationships with a variety of trusted service providers, from attorneys to dental supply companies to human resources specialists, ensuring that our clients have everything they need to run a successful practice.

The Power of Connection

In the dental industry, having the right connections can make a significant difference in how efficiently your practice operates. Whether you’re looking for the best deals on equipment, seeking advice on practice management software, or need a reliable contractor for office renovations, or if you want to drop some insurance contracts but aren’t sure which ones, our network is here to support you. These connections aren’t just random business cards we’ve collected—they’re trusted professionals we’ve worked with closely, in most cases, for years, who understand the unique needs of dental practices.

The Added Value of Our Network

Partnering with us means you’re not just hiring an accountant; you’re gaining a team that’s committed to your entire practice’s success. Our network allows us to go beyond traditional accounting and financial services, offering you a holistic approach to managing your business. 

For instance, if you’re struggling with the administrative side of your practice, we can connect you with consultants who specialize in creating efficient systems and streamlining workflows. Need help handling the complexities of dental insurance? We’ve got contacts who can tell you which insurance contracts to stay away from and which ones to accept, explaining why in both cases. Or maybe you need a loan to purchase new equipment or expand your space? We know where you can get the best rates, and it is not always with a local bank. Our membership in the Academy of Dental CPAs allows us to create relationships with dental-specific lenders nationwide – and we are happy to connect these lenders with our clients. 

This extensive network is one of the reasons our clients stay with us for the long term. They appreciate that we’re not just focused on their books; we’re focused on their business as a whole. Our network provides value that goes beyond the numbers, helping solve challenges that may not even be on your radar yet.

Why This Matters

In an industry as specialized as dentistry, it’s crucial to have vendors and service providers who understand the intricacies of your field. Working with a generalist may save a few dollars in the short term, but the expertise you gain from specialized vendors can lead to better outcomes and fewer headaches down the line. Our carefully curated network ensures that you’re always working with professionals who know the dental industry inside and out.

We believe that our clients deserve more than just excellent tax, financial and accounting services – they deserve a partner who’s invested in their overall success. Our extensive dental network is a testament to that commitment, providing you with the resources you need to run a thriving practice. When you work with us, you work with a team that’s dedicated to helping your practice grow, succeed, and meet the challenges of an ever-evolving industry.

Giving Back to Our Community

Remember getting ready for the first day of a new school year? While many of us were sad to see summer go, we were also excited about hanging out with our friends and learning new things. It was also a fun time to pick out new school supplies. (Anyone else remember Trapper Keepers?) Not all kids can approach the start of school with the same excitement and support, which is why the Community Partners of Dallas created their Back to School program.

Believing to whom much has been given much is required, the E&A team decided to gather school supplies and support our community with a team-building exercise. So this week we paused from our day-to-day work to put together 75 backpacks (25 for each grade level: K-2, 3-6, and 7-12) for abused or neglected children in the Dallas area. We encourage all of our clients and other readers to consider supporting this organization as well by putting together your own backpacks, organizing a school supply drive, or simply donating to the cause.

Afterwards, we gathered at Maguire’s for Happy Hour to enjoy more time with each other and raise a toast to a great day.

Solving Common Dental Practice Challenges with Virtual Assistants

In a recent Beyond Bitewings episode, Beth Lachance, the founder and CEO of Global Medical Virtual Assistants, joined the discussion to share insights on how virtual assistants are transforming the operations of dental practices and highlighted the growing trend of remote staffing as a solution for the administrative challenges faced by dental professionals. Her company specializes in providing virtual assistants who manage tasks like front desk operations, insurance verifications, and revenue cycle management, which are crucial yet time-consuming for practice owners.

Beth emphasized that many dental practices struggle with the demands of running a business while trying to focus on patient care, a topic we cover frequently on Beyond Bitewings. The administrative burden often falls on front desk staff, leading to inefficiencies and potential burnout. Virtual assistants offer a way to offload these tasks, allowing in-house teams to focus on patient care and improving the overall efficiency of the practice.

One of the key points Beth made was the cost-effectiveness of using virtual assistants – who can cost significantly less than employing full-time, in-house staff – without sacrificing quality. These virtual assistants are often dedicated exclusively to the practice they are assigned to, ensuring consistent and personalized service.

Moreover, virtual assistants can help practices scale more effectively by managing the administrative workload, thereby freeing up resources for growth. This is particularly important in the post-COVID era, where staffing challenges and rising operational costs have made it difficult for many practices to maintain profitability.

Beth also addressed concerns about the personal touch in patient care, assuring listeners that her virtual assistants are highly trained professionals who can seamlessly integrate into the practice’s workflow, just like any other remote employee. 

The episode provides valuable insights into how dental practices can leverage virtual assistants to streamline operations, reduce costs, and improve patient care. For dental professionals looking to optimize their practice management, exploring virtual assistance could be a game-changer. If you are interested in learning more, you can download Beth’s book, Best Tasks to Delegate to a Medical Virtual Assistant, on their website.

Understanding the New IRS Rules for Retirement Account Withdrawals

The IRS has made important changes to how you must withdraw money from your retirement accounts. Knowing these new rules is important for good tax and financial planning. Here’s a simple overview of what’s changed and what it means for you.

Key Changes in the Rules

  • Raising the Age for Withdrawals: In the past, you had to start taking money out of your retirement accounts at age 70½. This was later moved to age 72, and now, starting in 2023, it’s been moved to age 73. In 2033, this age will increase to 75. These changes give you more time to grow your savings before you have to start taking money out.
  • Changes for Inherited Retirement Accounts: Before, if you inherited a retirement account, you could spread the withdrawals over your lifetime. Now, if you inherit an account, you might have to empty it within 10 years. This rule applies to accounts inherited after December 31, 2019.
  • Who Is Affected by the 10-Year Rule?: The 10-year rule mostly applies to people who aren’t considered “eligible beneficiaries.” Eligible beneficiaries include spouses, minor children, disabled or chronically ill individuals, and those close in age to the person who passed away. If you’re an eligible beneficiary, you can still spread the withdrawals over your lifetime. If not, you’ll need to withdraw all the money within 10 years.
  • Annual Withdrawals: If the original account owner had already started taking money out, the person inheriting the account will usually need to continue taking money out each year. This prevents you from letting the money grow for 10 years and then taking it all out at once.

What Should You Do?

  • Update Your Beneficiaries: Make sure your retirement accounts list the right people to inherit your money according to your wishes.
  • Consider Roth IRA Conversions: Converting traditional IRAs to Roth IRAs might help your heirs save on taxes. Roth IRAs don’t require withdrawals during your lifetime, and your heirs can withdraw the money tax-free.
  • Plan for Taxes: The new rules can make taxes more complicated. Planning ahead can help you avoid paying too much.
  • Think About Using Trusts: Setting up trusts can give you more control over how your money is distributed to your heirs.

These changes bring new opportunities and challenges, so careful planning is important. For advice tailored to your situation, contact us. We specialize in helping people like you navigate these rules and make the most of your retirement savings.

FTC’s Non-Compete Ban: Dueling Court Rulings

Keeping up with the Federal Trade Commission’s (FTC) rule banning most non-compete agreements is nearly a full-time job. We initially wrote about it here, then published an update here, and now we have even more information to share. 

Overview of Original Non-Compete Ban Ruling (April 23, 2024)

On April 23, 2024, the FTC announced a final rule that prohibits employers from entering into non-compete agreements with workers, including senior executives, after the rule’s effective date of September 4, 2024. The rule also renders existing non-competes unenforceable for most workers, with exceptions for senior executives and agreements made as part of a bona fide sale of a business. The FTC’s decision was driven by findings that non-compete clauses suppress wages, stifle innovation, and hinder new business creation. The FTC estimates that the ban will lead to a 2.7% annual increase in new business formation, higher worker earnings by an average of $524 per year, and significant reductions in healthcare costs.

Ruling 1: Northern District of Texas Ruling (July 3, 2024)

U.S. District Court Judge Ada Brown in the Northern District of Texas granted a preliminary injunction against the FTC’s non-compete ban, preventing the FTC from enforcing the rule against the plaintiffs (Ryan LLC and several trade associations, including the U.S. Chamber of Commerce.) The court found that the plaintiffs were likely to succeed in arguing that the FTC lacks statutory authority to issue the rule and that the rule is arbitrary and capricious. However, this injunction is limited to the named plaintiffs and is not a nationwide injunction. 

Ruling 2: Eastern District of Pennsylvania Ruling (July 23, 2024)

In contrast to the Texas ruling, Judge Kelley Brisbon Hodge of the U.S. District Court for the Eastern District of Pennsylvania upheld the FTC’s authority to issue the non-compete ban. In this case, the court found that the FTC does have the authority to issue such a rule and ruled against the plaintiff, ATS Tree Services LLC. 

What is Next?

These conflicting rulings create uncertainty about the future of the FTC’s non-compete ban. The Texas court has indicated it will issue a final order on the merits by August 30, 2024, just days before the FTC’s rule is scheduled to go into effect on September 4, 2024.  Regardless of what the Texas court does at the end of the month, it is likely that these cases will continue through the appeals process, eventually leading to a resolution at a higher court level.

For dental practices, this situation creates uncertainty. We will continue to monitor these developments closely and provide updates on any further movement or rulings.

Legislation to Expand Tax Breaks Voted Down by U.S. Senate

A significant piece of tax legislation was rejected by the US Senate last week even though it passed overwhelmingly by the US House in January 2024. This decision can impact both families and businesses, so we wanted to break down what it means for each. 

What Was in the Bill?

  • Child Tax Credit Expansion: The bill sought to increase the amount of the child tax credit and potentially expand eligibility to families that did not qualify before. 
  • Business Tax Breaks: The bill proposed to restore tax deductions and credits, including for equipment, interest costs, and research and development activities. These were not new breaks, but ones that had lapsed. 

Impact on Dental Practices and Families

  • For Families: The proposed child tax credit expansion will not go into effect. Those that currently qualify can still take advantage of the credit, but it will not be expanded to cover more families. 
  • For Dental Practices: For those that anticipated more easily writing off 100% of the cost of new equipment in the first year, that is now off the table. You will need to continue operating under the existing tax framework. 

Optimize Your Tax Situation

While this may not have been the outcome some had hoped for, there are still plenty of ways to take advantage of existing laws. There are myriad other tax credits and deductions for which both families and businesses may still qualify. We encourage all of our clients to take advantage of early tax planning so we can determine which ones will help lower your overall tax liabilities and optimize your tax strategy for this year and the future as well. 

Proactive tax planning is one of the keys to financial success, regardless of legislative changes. Reach out to us with questions or to schedule a consultation.