Taxes

[thewingman]

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We as dentist get screwed in paying a lot in taxes while being burdened by high taxes. So lets hear it. What are you doing to pay as little taxes as possible? I have heard that you can setup a DSO of you own (management company). Aside from the s-corp model of paying a lower salary and getting K1 for reduction of payroll taxes and maxing out 401k/qualified retirement accounts, what strategies are y'all employing?

 

[allDAT]

If you're a W2 employee, you get screwed as a high earning professional. If you own your own business as an s-corp, you have some levers to pull as you mentioned. Running personal expenses through the business is a common practice to decrease your ordinary income on the P&L, but ultimately the goal should be less earned income and more passive income as our careers progress.

There's nothing wrong with having a large tax liability. More taxes, mean you made more, it's really that simple. Cash Flow Quadrant is a good read: Rich Dad's CASHFLOW Quadrant: Rich Dad's Guide to Financial Freedom: Robert T. Kiyosaki: 8601200674217: Amazon.com: Books

So is Tax Free Wealth: Tax-Free Wealth: How to Build Massive Wealth by Permanently Lowering Your Taxes (Rich Dad Advisors): Tom Wheelwright: 9781947588059: Amazon.com: Books

 

[laundry]

We as dentist get screwed in paying a lot in taxes while being burdened by high taxes. So lets hear it. What are you doing to pay as little taxes as possible? I have heard that you can setup a DSO of you own (management company). Aside from the s-corp model of paying a lower salary and getting K1 for reduction of payroll taxes and maxing out 401k/qualified retirement accounts, what strategies are y'all employing?

Starting a management LLC (what you called a DSO) to manage a single office won't save you much money, unless you have family non-dependents that can be placed as partners within the management LLC and thus reduce your own tax bracket.

I

 

[monkeykey]

Starting a management LLC (what you called a DSO) to manage a single office won't save you much money, unless you have family non-dependents that can be placed as partners within the management LLC and thus reduce your own tax bracket.

I

Does the C-Corp not save you about 15% in taxes?

 

[laundry]

Does the C-Corp not save you about 15% in taxes?

C-corps pay a corporate tax and then you pay capital gains tax ON TOP of that, whereas S-corps don't pay taxes but rather pass all profits through onto shareholders.

 

[monkeykey]

C-corps pay a corporate tax and then you pay capital gains tax ON TOP of that, whereas S-corps don't pay taxes but rather pass all profits through onto shareholders.

If I run my own practice as a S-corp and then pass the extra earnings to myself do I just pay my normal income tax rate for the bracket I'm in? Can you give us a tax break down of a dentist owning a practice netting $200K as a 1099 vs an S-corp structure?

Do the majority of private practice owners use S-corp structures? Do you find that most dentists are business savy people or more just clinicians without trying to make high income?

 

[laundry]

If I run my own practice as a S-corp and then pass the extra earnings to myself do I just pay my normal income tax rate for the bracket I'm in? Can you give us a tax break down of a dentist owning a practice netting $200K as a 1099 vs an S-corp structure?

Do the majority of private practice owners use S-corp structures? Do you find that most dentists are business savy people or more just clinicians without trying to make high income?

Yes on taxes; can’t be a 1099 independent contractor on your own practice; S-corp or sole proprietor; def no on business savvy.

 

[Anondds87]

Yes on taxes; can’t be a 1099 independent contractor on your own practice; S-corp or sole proprietor; def no on business savvy.

So for someone working for a corp earning 250k what is the best option to lower tax?

 

[laundry]

So for someone working for a corp earning 250k what is the best option to lower tax?

1099 IC

 

[monkeykey]

1099 IC

I assumed corporate would make you a W2 employee by default correct? 1099 is bad.

 

[laundry]

I assumed corporate would make you a W2 employee by default correct? 1099 is bad.

Depends on state, corp, and what you do for them.

 

[Cold Front]

Per IRS, S and C corps get audited more than LLC (which my businesses and practices are). Why? People who file under S and C corps abuse/don’t use those type of corps as intended.


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[2TH MVR]

I was a "C" Corp. Investment property was LLC. You could deduct health insurance premiums through the C corp. I just went with the advice of my tax acct. Now ...I'm just an employee. At the time ... the Corp tax rate was higher than my personal tax rate .... therefore at the end of the year ... we had to zero out the Corp profits and direct them towards me personally. Not sure how it works now in Trump's tax world.