Buying a Dental Practice: The Mandatory Background Research
It is a very important that you give yourself due consideration in deciding where to buy, how to go about it, and what kind of practice to purchase.
Take your Time
Pace yourself. You are building the foundation of your future. Where do you want to live, how responsive will the community be to your new practice, how much of a rapport do you already have with the community?
Deciding on Location
Where is it that you would like to live? You’ll want to be a big part of this community, so you’ll need to make sure it’s a good fit. Establishing a connection with the locals will help your business succeed. And ensuring a shorter commute could also pay off. Trading off time spent in commute with time spend amongst family and friends is not a bad deal.
Establish yourself amongst people you can relate to and people you can enjoy. Your practice and your interpersonal life will reap the benefit. Intercity or rural–what’s best for your family? Let the location of your competition inform your decision. Will your spouse be able to find work? Will your kids end up in a school district that will nurture them and grant you piece of mind?
Deciding on the Ideal Practice for You
Lay out a working business plan. What size of dental practice do you anticipate? And do be careful to leave room for growth. Will you be establishing a specialized or generalized dental practice. Can you establish relationships with other practices in the community that can give you referrals? Does working a full five-day schedule with a large list of clients appeal to you? Or maybe you’d prefer a smaller practice that allowed for more time off. Naturally, these decisions will affect your finances and may dictate your level of day-to-day stress too.
Get the Proposed Business Appraised
Seek an appraisal through a certified public accountant. And opt for a professional that has experience with dentistry practices. This will help you establish a clearer point of view. This will give you necessary information in making a purchase and could save you plenty.
Assemble a Team of Professionals
Trying to save money by being completely self-sufficient is a poor decision when you plan on purchasing a dental practice. You’ll have to rely on the expertise of others as your patrons will have to rely on you. Trusted advisors can save you plenty of trouble. Here are a few people you’ll need:
- A certified public accountant with a successful track record of aiding dentistry practices and other small businesses on maximizing deductions and remaining tax compliant. You should seek a Certified public accountant who can help you develop tax strategies. You will want a certified public accountant that can advise you on how to structure your business entity (LLC, PLLC, Sole Proprietorship, S-Corp, C-Crop).
- A Bookkeeper that is already well-versed in an accounting software system like Quickbooks. A certified Quickbooks Advisor is a level of distinction in which a bookkeeper certified by by Intuit as proficient with the bookkeeping program.
- A legal professional to review documents and legally protect your interests.
- A consultant also will likely prove useful in helping you avoid pitfalls.
- Establish a relationship with a bank early on. Getting prequalified, and ready to finance, informs how much you can afford when putting in an offer.
- An insurance agent will evaluate risk and assess the value of the business to see exactly how much coverage you’ll need.
- It is wise to seek advice from a mentor or business confidant of some kind, perhaps a veteran dentist who once went through the same process you’re going through now.
- A marketing expert-preferably someone with knowledge of internet marketing.
When starting a dentistry practice, go into it with a team that can make sure you get it right.
Tax CPA John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Tacoma & Everett area on various tax and accounting issues. His firm, Huddleston Tax CPAs, also provides tax preparation service, quickbooks consulting, business valuation, general accounting and bookkeeping service. Profile information on CPA John Huddleston and the CPAs employed by Huddleston Tax CPAs is available at CPA Profile, Seattle CPA.
Offers of Compromise Form 656
Preparing Form 656 and Supporting Documentation in Filing for an Offer for Compromise of Back Taxes
An Offer for Compromise (OIC) is a tax debt settlement offer from the IRS to taxpayers, both individuals and businesses, who are unable to pay their tax dues in full. There are certain strict criteria that determine eligibility to file for the OIC and if you do meet these requirements, you’ll need to fill out Form 656 and submit a number of supporting documents to be evaluated for the offer.
Preparing Form 656 OIC
You need to fill out a Form 656 to file for an OIC in two circumstances. In the Doubt as to Collectability situation, there exists a reasonable amount of doubt over your ability to pay the full amount of your claims within the specified period. In the Effective Tax Administration case, your contention for a tax settlement is that paying the full amount of the dues will create economic hardship for you.
Now that you know the circumstances in which you will need to prepare Form 656, here’s what you should remember when completing the form
- You will need to give the names of both the parties if you are pursuing a joint offer for joint liabilities. When you owe a joint liability and both you and your partner are submitting for an offer, then you will want to do so on Form 656, just one single form. You may owe a liability, such as employment taxes for yourself and hold other liabilities, such as income taxes, with another person. If, only you are submitting this form, then you have to list all liabilities on one of Form 656. In case both of you want to submit this application, then you have to include all tax liabilities on your Form 656 and the other person must show only the joint tax liability on their Form 656.
- You will have to provide the relevant information in every field on the form.
- Each person submitting the offer should enter their social security numbers.
- You need to give the EIN of all businesses, except corporate concerns, that you own, either wholly or partly.
- If your claim to an Offer of Compromise is based on a Doubt as to Collectability, you need to also furnish a completed Form 433A if you are an individual taxpayer and Form 433B if you are a business taxpayer.
- If your claim to an OIC is based on Effective Tax Administration, then apart from submitting a Form 433B or 433A, you’ll also need to fill out the info in the “Explanation of Circumstances.” You can also include supplementary bits of relevant information on separate sheets along with your social security and employer identification numbers.
- When supplying the total amount of your offer, you cannot include a sum that the IRS owes to you or any amount that you’ve already paid in taxes.
- All persons submitting the offer should sign the 656 Form and provide the date. They must provide as well the titles and names of authorized corporate officers, trustees, Powers of Attorney, and executors wherever requested.
- You may want the IRS to contact a a friend, a family member, or any other acquaintance to discuss your case in order to understand your circumstance more fully. In that case, you’ll need to tick the “Yes” box in the “Third Party Designee” field. And, if you want your attorney, Certified public accountant, or an enrolled agent to represent your case, you will need to furnish the 2848 Form and submit it in addition to your offer.
- Ensure that you disclose the name and if possible, the address of the Offer in Compromise preparer to increase the chances of your offer being accepted by the IRS. And after you have gathered all the documents for submission, be sure that you make copies for your personal records. Apart from these documents, you might also submit additional documents that you think will corroborate your claim for this offer.
Applying for an Oic is a complicated process. Make sure to spend ample time over the Form 656 and provide the entire set of supporting documents to strengthen your chances of acceptance.
More of our OIC guide at:
Seattle Tax Debt Relief
Seattle Offer in Compromise
Form 433b of Offer in Compromise Booklet 656
Booklet 656 form 433-B is needed for those business owners that have businesses that are any other entity than sole proprietorship. This form is used in calculating the minimum offer you can make the IRS when pursuing an offer in compromise, unless you are able to provide evidence otherwise.
How to complete form 433-b
Section 1 is where you’ll provide an employer identification number, partners, officers, LLC members, major shareholders, and frequency of tax deposits.
Section 2: In section 2, you are to provide business asset information, including: bank accounts, investment accounts, and notes receivable. Also, here you’ll provide information regarding vehicles, equipment, and real estate.
Section 3: This section asks for your business income. The form requests your average gross monthly business income based on documentation from the most recent 6-12 months. Now, if you also provide a profit and loss report for this period, you can give an average amount of profit from these figures instead.
Section Four is where you are going to impart the specifics of business expenses. This would be details such as, your average gross monthly expenses of the more recent period 6 — 12 months (all documented). And, if you do provide a profit and loss statement for this period, you can give an average amount here.
In calculating an offer
If you plan to pay off the offer amount within a period of 5 months, follow the formula below to calculate the amount.
[ 48 x Business income in excess of expenses] Total available assets
If you decide to pay beyond the five month mark, your base minimum offer increases to the following amount:
[Business income in excess of expenses x 60] Total available assets
Whichever method you use, you must exceed zero.
The sixth section
In section 6, you are going to provide details for example whether your business has filed bankruptcy before, and whether your company has whatever other affiliations that could owe money to your company. In this section, you are also requested to share details on whether you have sold any assets at a discount in the past ten years.
You can find more of our offer in compromise guide at
Redmond CPA
Yakima CPA
Accountants and Tax Preparers in Edmonds
