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What Are You APT to Do?


I recently spoke with a CPA/CFP who has worked with dentists throughout the country hone their financial vision for 20+ years.  I asked him to share some insight as to what dentists should be focusing on as they put a capstone on 2021 and game plan for 2022.  Below is what he shared:

As you start 2022 what are you “APT” to do as it relates to making accounting, planning, taxes, and other financial-related issues?

Are you apt to fall back into your old routine of addressing these topics only when someone brings something to your attention?  If yes, I encourage you to start 2022 with a new approach.  What would that look like?

Let’s start off with what might look like your typical visit with your CPA/CFP or other financial advisor.

You enter the room (or virtual room), exchange pleasantries, and then listen as your advisor starts sharing “your numbers.” STOP!  Hit reset!!  Instead, you should enter the room and say something along the lines of “before we get to the numbers, let me tell you a bit about my past year and my vision for the coming year.”  Why should you do this?  Because sharing the past and the vision allows your advisor to look at the numbers through a new set of lenses.

Let’s put this in the framework of your practice.

How does knowing the past help?  Imagine if a patient came into your office, sat down, and told your hygienist right at the start: “I haven’t flossed in a year, nor have I brushed regularly, I eat a lot of hard candy, and oh by the way I usually spit quite a bit of blood after brushing!”

Knowing this early in the appointment allows your team to wrap their collective minds around how this will impact that appointment, the day’s schedule, the doctor’s extended hygiene check, and the likelihood that a second appointment will be needed soon.

How does having a vision help?  Assume another patient calls to schedule an appointment and shares the following: “My daughter is getting married in one year and I want a new smile in time for the wedding.”

How great is it to have this insight prior to the appointment?  I suspect you can answer that. The same can be said about sharing information with your CPA and other financial advisors instead of just reacting to what they are ready to share with you.

To that point, if you haven’t proactively shared in the past, then start this year off by sharing some history and some vision.  A few topics to get you started could include:

Annual Plan – Imagine how much more proactive your financial team can be if they know what you are planning to do at your practice.

Bookkeeping – Your financial statements should mirror (as closely as possible) the layout of your annual plan. Imagine how much time you will save in comparing your numbers to your plan.

Wages/Draws – Strategically setting your payroll and/or draw is important and shouldn’t be a “take it when I need it” approach. Setting your compensation to maximize retirement plan calculations and optimize credits/taxes is important and setting these numbers early in the year eliminates the need for late-year scrambling.

Savings Targets – Set your savings targets and strive to make timely contributions throughout the year.  Furthermore, combining your annual plan (growth) with the expected cash impact from the growth allows your team to anticipate extra cash for saving or directing toward other financial goals.

Statement of Cash Flows – Have you ever been surprised when your CPA says, “your net income is “X” and you look at your draws and the numbers don’t match? Do you know why? If you don’t then ask your CPA to provide a statement of cash flow for the period in question. This report is an eye-opener as it allows you to follow the cash from income to debt service payments to draws and all parts in between.

S-Corporation Basis – If part of your annual plan includes buying new equipment and you operate your practice as an S-corporation, you should know your basis.  Your dental supply rep will share the “tax benefit” of acquiring a piece of equipment; however, “basis” is what allows you to take the deduction. Ask your CPA to share your basis schedule, or better yet, let your CPA know how much you are planning on spending and have him/her confirm that you have the basis to deduct the equipment.

Governmental Stimulus – Many of you received a combination of governmental dollars in 2021.  Your accountant may already be aware, but they also need to know if you have started reporting back to the agencies regarding how you used the funds.  A side note on this topic includes some reporting deadlines:

  • PPP2 – Forgiveness applications should be submitted within ten months after the 8- or 24-week reporting period.
  • HHS Provider Relief Fund– go to to determine your filing requirement deadline (it varies based on when you received the funds).
  • ERC (Employee Retention Credit) – work with your CPA and payroll team to determine if you qualify and if you do file the amended 941x within three years of the qualifying pay period to claim the credit.

 A few items that could still impact your 2021 taxes include:

  • Business mileage reimbursement for 2021
  • Qualified Business Income Deduction
  • Retirement plan funding – ask your pension firm to prepare a min/max
  • Reimbursement for business use of a personal residence for meetings
  • Investigate Research and Development Credits
  • Cost Segregation Study (if you own your building)
  • Optimize accelerated depreciation

*Optimize is used above vs. maximize.  The goal is to get the deduction in the best marginal tax bracket based on current and future year benefits.

 Finally, some limits and dates to remember:

 2022 Funding limits – a new year creates new funding limits for retirement and other tax-related deductions. Below is a partial list of the 2022 targets:

  • 401k deferrals – increased to $20,500 per person
  • 401k catch-up – for those 50 or older is $6,500
  • ROTH 401k – same as above for both regular and catch up
  • IRA limit for 2022 is still $6,000 with an additional $1,000 for those over age 50
  • SIMPLE IRA deferral limit for 2022 is $14,000 with an additional $3,000 allowed for those 50 or older
  • Health Savings Account Limits for 2022 are now $3,650 for individuals and $7,300 for families with an additional $1,000 per person for those age 55 or older
  • ROTH IRA’s – same limits as IRAs above; however, ROTH IRA contributions are phased out starting at $129,000 for single taxpayers and $204,000 for married filing jointly

Important dates to remember:

  • ASAP – S-corporation owners, confirm that self-employed health insurance premiums were added to your final payroll check for 2021.
  • 1/15/22 – 2021 4th quarter estimated payments due
  • 1/31/22 – 1099’s mailed to non-employee payees and W-2’s distributed to employees
  • 3/15/22:
  • 2021 Corporation and partnership tax return filing or extension filing deadline
  • Last day to complete 2021 retirement plan contributions for a corporation or partnership UNLESS an extension is filed
  • 4/15/22:
  • Last day to fund IRAs, H.S.A.’s for 2021
  • First-quarter estimated tax payment due for 2022
  • Filing or extension date for 2021 personal income tax returns and Schedule Cs for sole proprietorships
  • Last day to complete 2021 retirement plan contributions for a sole proprietorship UNLESS an extension is filed
  • 6/15/22 – Second quarter estimated tax payments due for 2022

Build Back Better Act – This bill has not yet passed the Senate. If/when it does it could change a few of the items above. Ask your CPA/CFP to keep you apprised of future developments.

We encourage you to reach out to your CPA/CFP and let them know that these items are on your radar.  Discussing any of this with your advisor proactively is apt to produce good guidance for the coming year.

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“As an Office Manager, I’ve seen a great difference in my practice since starting with Sharyn. Three years ago our staff was in turmoil with a lot of infighting and gossip and some jealousy directed towards me.

I had given up because everything I did was judged. Now I have learned to have more one-to-one communication and by being more vulnerable with individuals I found my leadership voice. As a team, we’re all focused on the same goals.

Last year, in August we produced $88,000. This year we’re on track to produce $111,000 this month. I know it’s because we learned how to follow through with patients and communicate our expectations while building our systems.

Sharyn has gotten us out of our comfort zone and inspired us to dream bigger and it works.”

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