Connect With Us:
Facebook Twitter LinkedIn

Get a Leg Up on Business Tax Filing

If you think it’s too early to start planning your 2017 business tax filing, think again. From determining how employees are classified to which method of form distribution is right for your practice — and avoiding costly penalties — there’s a lot to be considered well before next January. Continue below for advice on getting the process started.
Ed Rabinowitz
PUBLISHED: Monday, August 21, 2017

Incorrect or late filing can lead to heavy penalties for your dental practice. 
 
“It’s never too early to begin planning” is an adage that holds true where business tax filing is concerned. And tax season, often thought of as November through the following March for small businesses, is right around the corner.
 
RELATED:  
Penalties for filing late or incorrect information can be costly. According to Rick Roddis, president of ComplyRight’s efile4Biz.com company, the amount of the penalty is based on when the correct form is filed. For example, if you correctly file no later than 30 days after the deadline, you will be fined $50 per form with a maximum penalty of $186,000 per year for small businesses.
 
As a dental practice, that hurts. But starting to prepare early can prevent those costly and painful penalties.
 
START EARLY

Roddis explains that the due dates for distributing 1099 and W-2 forms to employees and contractors is January 31, but that doesn’t mean there aren’t some best practices dentists can and should do now.
 
“Number one, make sure you have your employees properly classified,” Roddis says. “I would imagine that most dental offices classify their employees as W-2s, but that can be an area of confusion.”
 
It’s a good idea to use this early time to look through vendor records and identify people who you have paid, or are on pace to pay, more than $600 to during 2017. These are generally people who have provided a service to your practice, not necessarily physical product providers, who would receive 1099s.
 
As noted earlier, the penalties for filing late or filing incorrectly can be steep. If you file correctly more than 30 days after the due date but by August 1, the fine is increased to $100 per form, with a maximum penalty of $532,000 per year for small businesses. And if you file correctly after August 1, incorrectly, or don’t file at all, the fine is $260 per form, with a maximum penalty of $1.06 million per year.
 
And the IRS, Roddis says, has increased its enforcement of these penalties.
 
“They’re just sending out automated letters to businesses with the fines,” he says. “They’re not really allowing for an appeal process. They’re just issuing the fine and holding people accountable.”
 
CHOOSE YOUR METHOD
 
Another reason for starting early, Roddis says, is determining the method by which you plan to distribute your 1099 and W-2 forms. That should be done in September, or October at the latest, and there are a variety of methods to select from.
 
“Dentists can choose to do what we call a traditional method, which is you buy some 1099 and W-2s at the office supply store, and you fill them out,” Roddis explains. “You can also buy package software — different 1099 or W-2 software that will help you populate the forms and print them.”
 
A new trend is making use of a cloud provider, such as efile4biz.com. Dental practices enter the data in January, and the provider prints, mails and electronically files it with the government. Cloud providers like efile4biz are able to connect with many software providers, like QuickBooks, making it easy to move the data into the cloud system.
 
Working with a cloud provider offers additional benefits. For example, using the traditional method of disseminating W-2 and 1099 forms, each year a dental practice will need to purchase these forms and they have to figure out how to populate them. That can be a tedious process. Working with a cloud provider results in the elimination of paper and streamlining the process.
 
“With our cloud processing, the data is saved from year to year,” Roddis says. “So, you don’t have to re-enter all the data every year. Most likely, your contractors are the same year in and year out, so the data’s all saved in there at the highest levels of security.”
 
And if someone needs an additional or replacement copy of their W-2 or 1099, it’s easy enough to log into the provider’s website and reprint or email the form.
 
“It’s really about convenience and access to your data,” Roddis says.
 
HAVE A CONSULT
 
With all that’s potentially at stake, Roddis strong recommends consulting with your dental practice accountant.
 
“With the IRS increasing its fines and its approach, you really need to have some professional help,” he says.
 
And if you choose to prepare and distribute W-2 and 1099 forms on your own, a cloud provider like efile4biz’s website has a content section designed to help educate users about the process, or understand the difference between a contractor and an employee.
 
“You can’t take this process lightly,” he adds.

Discover more Dentist’s Money Digest® news here
.



$vacMongoViewPlus$ $vAR$
Dentist's Money Digest
Partner Websites
MJH Associates
American Journal of Managed Care
ContagionLive
Contemporary Clinic
Cure
Cure Connections
Cure Hepatitis C
HRA
MD Magazine
ONCLive
OTCGuide
Pharmacy Times
Specialty Pharmacy Times
Rare Disease Report
Targeted Oncology
Resources
About Us
Careers
Press Release
Privacy
Terms & Conditions
Intellisphere, LLC
2 Clarke Drive
Suite 100
Cranbury, NJ 08512
P: 609-716-7777
F: 609-257-0701

Copyright Dentist's Money Digest 2018
Intellisphere, LLC. All Rights Reserved.