Wednesday, January 29, 2014

Associate Agreements

Associate Agreements (contracts) can suffocate us at a time we should be reveling in a new opportunity.  However, many dentists don’t understand what is in their contracts, in turn complicating the process and turning this joy of new opportunity into a whirlwind of anxiety and trepidation.

This article is not intended to be legal advice.  ALWAYS consult an attorney or legal expert in your jurisdiction.

Here are a few points to pay attention to when reviewing your Associate Agreement:

1. Employee or Independent Contractor:  Regardless of the debate on what is technically legal or acceptable by the IRS, make sure you know which status you are agreeing to.  If taxes on income are not paid correctly, it could come back to bite both the associate and the practice.   Consult a CPA or Attorney on what is correct for your situation.

2. Compensation: Are you going to be paid on collections or on production?  These two do vary, but don’t get stuck in the mindset that production-based income is the only way you will accept to be paid.  Keep in mind that even if you are paid on production, many practices will adjust your future paycheck if there are any unpaid patient balances or write-offs.  In essence, you are being paid on collections anyway.

3. Notice Period: The length of termination periods are widely becoming 30 or more days long.  We’re seeing more and more asking for 60 to 90 days notice.  Understand what is required of you to terminate your employment with a practice. 

4. Restrictive Covenants and Non-Compete Clauses: Dental practices will protect their interest by requiring you to agree to some sort of restrictions upon the termination of your employment.  They will restrict you from practicing dentistry in any capacity within a certain distance for a specified length of time.  There will be other language that restricts you from soliciting patients or staff for a specified time period.   Distance varies upon geography.  For example, rural areas can have 20 miles or more of a restricted zone, while a metro area will be 2 to 5 miles.

5. Lab Expenses:  Most practices are paying these costs; however, make sure to ask if you will be paying for any lab expenses.  There is no real standard on this in the industry.  Practices will have associates pay for half or an amount equal to the Associate’s percentage of pay.  Also, make sure you understand the formula for calculating your pay with lab expenses.  You want the lab expense to be deducted from the total production prior to calculating your percent of pay.  {Pay = % of production * (Production – Lab expense)}

These are just a few of the “biggies” that develop in contract negotiations.  Again, refer to your attorney for precise legal advice.

Posted by Carl Guthrie, Senior Dentist Recruitment Consultant with ETS Dental. To find out more, call Carl at (540) 491-9104 or email at

Wednesday, January 15, 2014

The Top Twelve Mistakes Dentists Make Filing Their Taxes

The following is a guest post from our friends at the Dental CPAs
Lance Jacob of the Dental CPAs has compiled a list of the top twelve most common tax filing mistakes that he sees his dental clients making. If you don't have a dental CPA, contact Lance.    
Filling out tax forms with an incorrect Social Security number. The IRS computers will automatically reject your deductions and credits if your Social Security number is wrong.[i] This mistake seems careless and trivial, but it is paramount to have the right Social Security number when filing your taxes.  Your social security number is your tax ID number, which is linked to numerous transactions such as income statements, savings account interest, and retirement plan contributions. It is also vital to claiming tax credits. Since the majority of returns are now being filed electronically, a correct social security number is paramount. An incorrect social security number will result in the reject of an e-filed return.   
Double dipping on dependents for divorced taxpayers. Ill repercussions could result such as additional taxes, penalties, and interest charged.[ii]  A child can ultimately meet the rules to be a qualifying child of only one person.[iii] Once divorced, your children do not duplicate out of thin air; therefore they cannot be claimed twice in taxes.  The IRS does not allow both divorced taxpayers to claim a child as a dependent. 
Not reporting non-deductible IRA contributions.  Any contribution to an IRA, whether it is deductible or non-deductible, should be reported on Form 8606, so when you withdraw it you are not taxed on it.  Plain and simple, all contributions to an IRA must be reported.
Incorrectly reported estimated tax payments.  If your accountant instructed you to make quarterly estimated tax payments, be sure to let him or her know the details of the payment for each installment.  Provide the check numbers, dates of payment, and the amount of each payment.  What often happens is people claim they made the payments as their accountant told them, but did not keep any records and inadvertently forgot a payment or two.  If the accountant includes all of the estimated payments on the return when they all were not really made, the IRS or state government will send a notice of tax due with penalties and interest.
Incorrect Federal ID number used on 1099 MISC.  Although your accountant can easily fix this, the less the IRS has to contact you, the better it is. The IRS matches 1099MISC and the Social Security number or Federal Identification number used. If you provide services, and the client you did the work for issues a 1099MISC, be sure they know to use the federal identification number of your business and not your social security number.  If they use the wrong number the IRS will send you a notice that you did not report income on your personal return, when in fact it was reported correctly on your business return.
Exceeding the mortgage interest deduction limit on Mortgage and home equity debt in excess of $1.1million.  This error commonly falls as the fault of both the taxpayer and accountant.  They only deduct the amount reported of the mortgage interest statement, Form 1098, and do not bother to check the amount of mortgage the taxpayer has.  The tax laws limit the amount of deductible interest to the interest on the first $1,000,000 of home mortgage debt and $100,000 of home equity debt [iv].  So if you have a mortgage of $2 million, you can only deduct mortgage interest related to the first $1.1 million in total debt.   
Standard mileage vs. actual expenses.  Mistakes in this area come from inconsistent use of methods.  If your car is for business purposes only, then the entire cost of its operation can be deducted.  However, if the car is used for both business and personal use, only the cost of its business use can be deducted. The amount of your deductible car expense can be found using either the standard mileage rate method or the actual expense method. [v] Some people will qualify for both methods but you must choose only one method when you start using the vehicle and continue with that method until you replace the vehicle.  Be sure to figure your deduction with both methods initially to see which gives you the larger of the deductions.
First-Time Homebuyer Credit recipients unaware of the fine print.  Those who received a First-Time Homebuyers’ Credit towards their purchase of a home settled on prior to 12/31/08 must begin repaying that money on 2010 tax returns. Now is the time to take a good hard look at the details of this credit. Many who accepted the $7,500 credit may not realize that it was in fact a loan, and the government will begin not-so-politely asking for the money back over the course of the next 15 years starting with 2010 individual tax returns. As with any federal money however, there is a lot of fine print to read into on this one. Use form 5405. [vi]
Forgetting to tell your tax preparer you took an early distribution on an IRA; therefore, failing to calculate the early distribution penalty of 10%.  If you are under the age of 59.5, a distribution on an IRA (including employer matching and profit sharing) is considered early, and subject to a 10% additional tax.  This tax is in addition of other taxes that apply to the distribution. [vii]

Forgetting your signature on your return!
 If you were an artist, you wouldn’t forget to sign your masterpiece upon its completion, would you? You must sign your taxes for the IRS to process your taxes.  Filing your taxes electronically is a foolproof way to ensure your taxes will not go unsigned.  These software packages do not allow documents to be sent unless every step is completed.

Incorrect bank account information for refund.
If you are having your accountant file your returns electronically and want your refunds directly deposited (or payments automatically) withdrawn from your checking or savings account, provide the correct account information including name of bank, bank routing number, and account number. This will avoid delays in processing your refunds and/or payments

Forgetting to file a Form 1099 for rental property or a business as a sole proprietor.
The IRS now requires you to answer the following questions
1. Did you make payments during the tax year that would require you to file Form(s) 1099? (these are forms used for rents, non-employee compensation, interest, and other income).
2. “If yes have you or will you file all required Form(s) 1099?
It is important for your accountant to ask this question of the client and also important for the taxpayer to be aware when a 1099 is needed. You can see the problem you might have if you answer yes to the first question and no to the second.

Friday, January 3, 2014

Dental Residents - How to Find a Job Coming Out of your AEGD or GPR

Congratulations! After spending your whole life in school and residency you can finally see the end in sight. Now it is time to start putting all that education to use but finding a job is a lot different than applying to programs. Do you know how to get started?

This is an attempt to provide a centralized resource to help you land a job.

Step 1. Make a Plan.
As outlined in the following blog link, the key is to be flexible. It is best to determine what your options are before narrowing your focus on the best fit. Job Hunt Tips.

Obviously location is important, but don't waste the crucial first years of your career in order to live in the heart of the city. Here is an overview of area limitations on a job market: Where are the Jobs?, and a real-life example is outlined here: The Grass is Always Greener. If you absolutely have to live and work in a saturated market, here are some strategies to help you land a job: Saturated or Difficult Markets.

Step 2. Prepare Your CV and Cover Letter.
Generally speaking, CV/resumes are overrated, as are cover letters. Still, they are a necessary evil when breaking into a job market. It is important to stand out from the crowd, but make sure that it is for the right reasons. You likely gained many marketable skills in residency. Did you place implants, get sedation certification, perform an full mouth rehabilitations? Be sure to highlight those experiences.
Here is an example of a well-written cover letter: Cover Letter Sample.
And here are instructions on writing your CV/resume: Resume for Dentists.

Step 3. Applying.
Here are several online sources for dentist jobs:
Step 4. Interviews.

The Telephone Interview:
  • Return your phone messages and emails promptly. It speaks to your motivation, interest, and courtesy. Don't let returning phone calls or emails become an issue or an obstacle to getting an interview. Even if you don't think you will be interested in an opportunity, return the call. On more than one occasion we have seen a candidate get a call from Practice B when he was already talking with Practice A. The candidate puts off returning the call to Practice B. Two or three weeks later, the opportunity with Practice A does not work out and now Practice B will not consider the candidate because no calls have been returned.
  • Your main goal in a telephone interview is to get a face-to-face interview.
  • Ask for the interview. Take the initiative to set a time. Say something like, "From what you have told me, I would be very interested in meeting with you and coming to see your practice. When would be good for you?"
  • Smile- even on the phone. You really can tell when someone is smiling.
Here is some additional reading on phone interviews: Tips for Phone Interviews.

The Face-to-Face Interview:
Don't go in blindly. Be sure to prepare in advance. Look over this article the night before: Preparing for the Interview.
  • Treat the staff with courtesy and respect. A practice owner often feels like his or her staff is like a family and will listen to their opinions, especially if they are negative. On more than one occasion, we have seen excellent candidates not offered an opportunity because they treated a staff member poorly.
  • Smile and show some enthusiasm. More candidates are hired because of their personalities and positive attitudes than because specific clinical skills. One high-end cosmetic practice told us they had interviewed six different dentists. They hired the candidate who smiled and appeared to truly enjoy being a dentist, passing on more experienced candidates with less personality and enthusiasm.
  • Show sincere interest in the hiring dentist's situation. Understand that the dentist needs to solve a problem. Maybe the practice just lost a key associate or partner. Maybe the practice is growing and cannot keep up with patient demand. Maybe the dentist needs someone to take over the practice when he or she retires. You need to get a clear understanding of the dentist's true motivation for adding an associate. Once you truly understand the needs of the hiring dentist, you can mutually determine if you are the solution.
  • Send a thank you note after the meeting. Here is a great example of a post-interview thank you: Thank You Note.
Still nervous? Here is a full blog post on interviewing: Interview Tips.

Step 5. Reviewing Contracts.
A good overview of contracts may be found here (the most relevant information is on the last page of the article): Compensation Considerations.
Do you have all the information you will need in order to make an informed decision? What to Know Before You Accept an Associate Position
Not satisfied with the offer? Don't be afraid to ask for more. Here are some tips on Negotiating Your Offer.

Step 6. What Can You Expect to Earn?
There are several good sources covering realistic dentist earnings. Here is our own: How Much do Dentists Make?
The Levin Group publishes an annual survey in Dental Economics. The 2013 version can be downloaded here: Levin Group Survey.
The ADA puts out its own numbers, also: ADA Income and Gross Billings.

Step 7. Plan Your Relocation.
If you need to relocate, be sure to plan it ahead of time. Here are a few key points to ponder as you plan: Relocation Tips.

Finding a job can be an intimidating process. I hope these resources will help make the process easier. Please feel free to call us should you have any questions. We are always happy to help. For more updates, tips, and helpful information, follow us on our Facebook fan pageTwitter, LinkedIn or on our blog.

Posted by Morgan Pace, Senior Dentist Recruitment Consultant with ETS Dental. To find out more, call Morgan at (540) 491-9102 or email at